Just when you think the banks cannot stoop any lower, they do.
In the latest in a long volley of insults, Lloyds Banking Group has offered the Lloyds TSB Foundation for Scotland a derisory £38, 920 grant for 2010. Yet, the Foundation reckons it is due over £3.5million this year. The Foundation has now served notice of legal proceedings on the bank to obtain this sum. This is not a step taken lightly by the trustees and management at the Foundation and I doubt if it will be the last in their campaign to ensure the continuation of the Foundation’s very existence.
When it was formed by Lloyds TSB swallowing up HBOS, the Lloyds Banking Group immediately set about trying to change the terms of its relationship with the four Lloyds TSB charitable foundations in the UK. The statute that established these Foundations set up a covenant guaranteeing their independence – from each other as well as the bank – and put in place a fair, transparent funding mechanism, ironically designed to enable the Foundations to weather stormy financial times.
Two hundred years ago, the Rev Henry Duncan opened the first Trustee Savings Bank in Ruthwell, Dumfriesshire because he believed that everyone, regardless of wealth and status, could and should benefit from a savings bank. The Lloyds TSB Foundation for Scotland put this ethos at the heart of its activities, working hard to ensure that every part of Scotland, particularly the least well off areas, got its fair share of available grants. Not for nothing, does the Foundation claim to be at the heart of funding Scotland’s communities.
Yet, the Foundation has also been innovative and often radical. Its Partnership Drugs Initiative to work with children and young people around the issues of drug and alcohol misuse might seem mainstream now: it was not when the initiative was set up in 2000. A few years ago, it also launched an initiative to fund projects overseas enabling a range of large and small charities, and by default, Scotland to support developing nations and communities. The mentoring programme to build capacity in organisations has helped many charities to become more efficient and effective, particularly at diversifying their income streams.
Sadly, this is what the Lloyds Banking Group has been trying to sweep away. The bank effectively wanted to tear up the Covenant, bringing all the Foundations in house and changing the way they are funded. The Lloyds TSB Foundation for Scotland estimated that a different funding formula could result in the loss of up to £40 million to charities in Scotland over the next nine years. Perhaps worst of all, bringing the Foundations in house would remove their independence and result in much more restrictive funding practices. There would probably be a UK size fits all approach to grant making. The strengths and potentially the values of Lloyds TSB Foundation for Scotland would be removed at a stroke.
So the Foundation for Scotland’s trustees deliberated and rejected the changes. Consequently, the bank served notice of terminating the Foundation for Scotland’s covenant, though fortunately that will take nine years to expire.
You can understand why the trustees of the Foundation baulked at what Lloyds Banking Group was offering. But they have not entered into this battle through a misguided sense of self-preservation. Frankly it would make little difference to their lives if they had less money to disburse to more tightly framed rules and conditions. But it will make a huge difference to hundreds of thousands of people’s lives, to the wellbeing of Scotland’s charitable sector in general, and specifically to the ability of communities and charities to meet their needs and priorities.
Lloyds TSB Foundation for Scotland has taken on a financial behemoth. They are standing up to the Lloyds Banking Group, treading literally where other more powerful institutions, and indeed where our politicians, have feared to. And they are doing it for Scotland and for the charitable sector in Scotland. They are standing up for values they and we hold dear. For fairness, universality and justice.
The least we can do is stand with them and support them until this battle, between might and right, is won.