Southampton City Council to quit troubled Co-op bank

Paul Flowers

Paul Flowers

First published in Hampshire Business
Last updated
Andover Advertiser: Photograph of the Author by , Political reporter

Council bosses are set to leave the crisis-hit Co-operative Bank and find a new home for millions of pounds of taxpayers’ cash.

Southampton City Council expects to name a new bank to manage the authority’s “current account” – which manages hundreds of millions of pounds of payments and income each year – next month.

The Co-op had written to the council to say it was axing its banking services for local authorities.

But Labour council leader Simon Letts said they were already considering leaving the Co-op at the end of their current contract in September due to the bank’s continuing financial woes.

The Co-op Bank last week announced a £1.3 billion loss for 2013 after a deal to buy 632 Lloyds branches collapsed last year. Its parent company, the Co-Operative Group, lost control of the bank to a rescue bid launched by a group of US hedge funds.

The bank’s chairman, Rev Paul Flowers, resigned last year amid allegations that he bought crystal meth and crack cocaine, just days after being grilled by MPs over the bank’s dismal performance.

The former Hampshire clergyman, who ran churches in Netley, Hedge End and Sholing and was a leading Hampshire Labour party member, was convicted of carrying out a sex act in a Hampshire public toilet more than 30 years ago.

Southampton City Council signed a contract with the Co-op in 2007, with the bank responsible for managing the council’s “general banking”.

The general bank account is similar to a current account, with most payments into the council, including £73m in council tax payments, and some of its £600m annual expenditure, going through it.

Cllr Letts said the Co-op wrote to the council, and 129 other councils, to let them know it would no longer offer banking for local authorities.

He said: “The contract was up anyway. But I am sure their difficulties would have been a fact we would have taken into account when we looked at whether to renew the contract.”

The Cabinet is set to start the process of finding a new bank at its meeting tomorrow.

Comments (11)

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10:29am Mon 14 Apr 14

George4th says...

A Labour council leaving the Labour run Co-operative Bank! (and the rest of the Labour run Co-operative)

Most amusing!

When will the great British public realise that trusting Labour with money is the road to ruin!!
Look at the track records of previous Labour governments!

Beggars belief why anyone votes Labour!
A Labour council leaving the Labour run Co-operative Bank! (and the rest of the Labour run Co-operative) Most amusing! When will the great British public realise that trusting Labour with money is the road to ruin!! Look at the track records of previous Labour governments! Beggars belief why anyone votes Labour! George4th
  • Score: 6

10:39am Mon 14 Apr 14

Bagamn says...

George4th wrote:
A Labour council leaving the Labour run Co-operative Bank! (and the rest of the Labour run Co-operative)

Most amusing!

When will the great British public realise that trusting Labour with money is the road to ruin!!
Look at the track records of previous Labour governments!

Beggars belief why anyone votes Labour!
I think your criticism is in the wrong place, you seem to forget about the millions spent by you on a useless museum. You were in charge of the purse strings and you failed us. We don't need lessons from Napoleon.
[quote][p][bold]George4th[/bold] wrote: A Labour council leaving the Labour run Co-operative Bank! (and the rest of the Labour run Co-operative) Most amusing! When will the great British public realise that trusting Labour with money is the road to ruin!! Look at the track records of previous Labour governments! Beggars belief why anyone votes Labour![/p][/quote]I think your criticism is in the wrong place, you seem to forget about the millions spent by you on a useless museum. You were in charge of the purse strings and you failed us. We don't need lessons from Napoleon. Bagamn
  • Score: -6

10:47am Mon 14 Apr 14

Lone Ranger. says...

George4th wrote:
A Labour council leaving the Labour run Co-operative Bank! (and the rest of the Labour run Co-operative)

Most amusing!

When will the great British public realise that trusting Labour with money is the road to ruin!!
Look at the track records of previous Labour governments!

Beggars belief why anyone votes Labour!
You obviously found it difficult reading the entire article and just "cherry picked" .........
.
QUOTE ...... The Co-op had written to the council to say it was axing its banking services for local authorities.
.
QUOTE:- The Co-op wrote to the council, and 129 other councils, to let them know it would no longer offer banking for local authorities.
.
Stil why let the facts get in the way of your usual moan.
.
You may also wish to know that the Co-op were only going to buy the 632 Lloyds branches due to the pressure put upon them by George Osborne.
.
Yes Most Amusing !! ...... that once again you are completely oblivious to the full and CORRECT information.
[quote][p][bold]George4th[/bold] wrote: A Labour council leaving the Labour run Co-operative Bank! (and the rest of the Labour run Co-operative) Most amusing! When will the great British public realise that trusting Labour with money is the road to ruin!! Look at the track records of previous Labour governments! Beggars belief why anyone votes Labour![/p][/quote]You obviously found it difficult reading the entire article and just "cherry picked" ......... . QUOTE ...... The Co-op had written to the council to say it was axing its banking services for local authorities. . QUOTE:- The Co-op wrote to the council, and 129 other councils, to let them know it would no longer offer banking for local authorities. . Stil why let the facts get in the way of your usual moan. . You may also wish to know that the Co-op were only going to buy the 632 Lloyds branches due to the pressure put upon them by George Osborne. . Yes Most Amusing !! ...... that once again you are completely oblivious to the full and CORRECT information. Lone Ranger.
  • Score: -3

10:58am Mon 14 Apr 14

Datarater says...

So the co-op is telling its Labour paymasters to they are not going to provided their banking. Get ready for the next big co-op failure. If you have money there get it out quick.
So the co-op is telling its Labour paymasters to they are not going to provided their banking. Get ready for the next big co-op failure. If you have money there get it out quick. Datarater
  • Score: 1

11:28am Mon 14 Apr 14

TurquoiseJ says...

Good luck with finding any bank with an unblemished reputation.

Wonder if the local credit union would be able to step in?
Then the banking charges would benefit local people, and provide extra jobs to manage the account.
Good luck with finding any bank with an unblemished reputation. Wonder if the local credit union would be able to step in? Then the banking charges would benefit local people, and provide extra jobs to manage the account. TurquoiseJ
  • Score: 2

12:22pm Mon 14 Apr 14

Randoor says...

So finally after the meeting about the meeting about the meeting the penny finally dropped.
Most of these so called council chiefs should be sat in the corner wearing a dunces hat.
They are so slow to react , Could not organise a --- in a brewery
So finally after the meeting about the meeting about the meeting the penny finally dropped. Most of these so called council chiefs should be sat in the corner wearing a dunces hat. They are so slow to react , Could not organise a --- in a brewery Randoor
  • Score: 0

2:12pm Mon 14 Apr 14

aldermoorboy says...

Try Tesco bank or Sainsbury bank when they do full banking shortly, far safer than the Co-op who appear to be in real trouble.
Try Tesco bank or Sainsbury bank when they do full banking shortly, far safer than the Co-op who appear to be in real trouble. aldermoorboy
  • Score: -7

8:26pm Mon 14 Apr 14

john harrington says...

Labour the Co-op banks paymasters !!! the co-op bank has never given any money to labour and is not in anyway directly connected to it. The Co-op Group which still owns 30% of the Co-op bank, did give last year £850K to the Co-op party. a separate party which tries to speak for the 6000 Co-ops in the UK, its only conection with the Labour party is an election agrrement. The Co-op Group also gave £2 million pound to Conservative lobby groups, but no one moans about that. Nearly all organisations lobby political parties, the city of london spent £100 million last year lobbying the goverment.
The co-oprative bank started providing a banking service for Local Authorities over 60 years ago. As a means of expanding, at the time it only had two branches it opened its third in chelmsford Essex when the Essex CCouncil decided to bank with it. shortly afterwards I opened an account with he Co-op Bank and after 60 years I'm still with them.
The Co-op Bank, having foolishly been persuaded to rescue the Brittania BS is now having to simplify its operation and all those accounts like Council accounts which are undoubtably time consuming to administer and were probably subsidised are being axed. i wish the council luck in finding another banker, I hope in a years time they will reveal just how much more its going to cost them,. £500K £1 million?? ( not the first year of course, they will give you a similar deal in the first year then probably screw you when your locked in)
Labour the Co-op banks paymasters !!! the co-op bank has never given any money to labour and is not in anyway directly connected to it. The Co-op Group which still owns 30% of the Co-op bank, did give last year £850K to the Co-op party. a separate party which tries to speak for the 6000 Co-ops in the UK, its only conection with the Labour party is an election agrrement. The Co-op Group also gave £2 million pound to Conservative lobby groups, but no one moans about that. Nearly all organisations lobby political parties, the city of london spent £100 million last year lobbying the goverment. The co-oprative bank started providing a banking service for Local Authorities over 60 years ago. As a means of expanding, at the time it only had two branches it opened its third in chelmsford Essex when the Essex CCouncil decided to bank with it. shortly afterwards I opened an account with he Co-op Bank and after 60 years I'm still with them. The Co-op Bank, having foolishly been persuaded to rescue the Brittania BS is now having to simplify its operation and all those accounts like Council accounts which are undoubtably time consuming to administer and were probably subsidised are being axed. i wish the council luck in finding another banker, I hope in a years time they will reveal just how much more its going to cost them,. £500K £1 million?? ( not the first year of course, they will give you a similar deal in the first year then probably screw you when your locked in) john harrington
  • Score: 3

9:00pm Mon 14 Apr 14

George4th says...

john harrington wrote:
Labour the Co-op banks paymasters !!! the co-op bank has never given any money to labour and is not in anyway directly connected to it. The Co-op Group which still owns 30% of the Co-op bank, did give last year £850K to the Co-op party. a separate party which tries to speak for the 6000 Co-ops in the UK, its only conection with the Labour party is an election agrrement. The Co-op Group also gave £2 million pound to Conservative lobby groups, but no one moans about that. Nearly all organisations lobby political parties, the city of london spent £100 million last year lobbying the goverment.
The co-oprative bank started providing a banking service for Local Authorities over 60 years ago. As a means of expanding, at the time it only had two branches it opened its third in chelmsford Essex when the Essex CCouncil decided to bank with it. shortly afterwards I opened an account with he Co-op Bank and after 60 years I'm still with them.
The Co-op Bank, having foolishly been persuaded to rescue the Brittania BS is now having to simplify its operation and all those accounts like Council accounts which are undoubtably time consuming to administer and were probably subsidised are being axed. i wish the council luck in finding another banker, I hope in a years time they will reveal just how much more its going to cost them,. £500K £1 million?? ( not the first year of course, they will give you a similar deal in the first year then probably screw you when your locked in)
There are at least 10 ex Labour MPs/hierarchy on the Co-operative's LARGE Committee!
It has always been a place that takes ex Labour Party personnel - just look at the records! It is a job for the boys!

Of course the most recent "famous" Labour Party member being Paul Flowers and the story about him and the Co-operative is just one BIG JOKE!

The reason the Co-operative is in so much trouble is because it operates with large committees and therefore decisions never get made. It might have been OK 50 years ago but in 21st century it leads to failure!
[quote][p][bold]john harrington[/bold] wrote: Labour the Co-op banks paymasters !!! the co-op bank has never given any money to labour and is not in anyway directly connected to it. The Co-op Group which still owns 30% of the Co-op bank, did give last year £850K to the Co-op party. a separate party which tries to speak for the 6000 Co-ops in the UK, its only conection with the Labour party is an election agrrement. The Co-op Group also gave £2 million pound to Conservative lobby groups, but no one moans about that. Nearly all organisations lobby political parties, the city of london spent £100 million last year lobbying the goverment. The co-oprative bank started providing a banking service for Local Authorities over 60 years ago. As a means of expanding, at the time it only had two branches it opened its third in chelmsford Essex when the Essex CCouncil decided to bank with it. shortly afterwards I opened an account with he Co-op Bank and after 60 years I'm still with them. The Co-op Bank, having foolishly been persuaded to rescue the Brittania BS is now having to simplify its operation and all those accounts like Council accounts which are undoubtably time consuming to administer and were probably subsidised are being axed. i wish the council luck in finding another banker, I hope in a years time they will reveal just how much more its going to cost them,. £500K £1 million?? ( not the first year of course, they will give you a similar deal in the first year then probably screw you when your locked in)[/p][/quote]There are at least 10 ex Labour MPs/hierarchy on the Co-operative's LARGE Committee! It has always been a place that takes ex Labour Party personnel - just look at the records! It is a job for the boys! Of course the most recent "famous" Labour Party member being Paul Flowers and the story about him and the Co-operative is just one BIG JOKE! The reason the Co-operative is in so much trouble is because it operates with large committees and therefore decisions never get made. It might have been OK 50 years ago but in 21st century it leads to failure! George4th
  • Score: -2

1:16am Tue 15 Apr 14

john harrington says...

The present structure is complex but one the members voted for, in the same way they voted for who sits on the district commitees. they receive £1.500 a year for a lot of work. There may be 10 ex Labour MP's but how many Ex Conservative/ Liberal etc.? Co-ops are open to all people so we dont know or care what party/relgion etc. If you are a member of the Co-op group you could stand and see how many other members voted for you.
The Co-op group is about to change its governance structure. But it will be one based on other large successsful Co-ops ( there are 100's in the UK/world)
It has changed the structure a number of times.
The UK has a governance structure of 650 full time elected directors(MP's)
A second board of 1000 unelected directors (£300 a day just for clocking in)because ordinary people can not be trusted to run a country, and a unelected highly paid head of state who can refuse to sign legislation.
How on earth can you criticise the Co-op? you obviously know very little about it.
I can understand however if your only knowledge comes from reading the national press or watching BBC TV they are frequently wrong. I had to complain twice to the BBC, before I received a written apology from them accepting their programme on the Co-op was completly inaccurate. They have I think taken more care with their research and improved since then.
The present structure is complex but one the members voted for, in the same way they voted for who sits on the district commitees. they receive £1.500 a year for a lot of work. There may be 10 ex Labour MP's but how many Ex Conservative/ Liberal etc.? Co-ops are open to all people so we dont know or care what party/relgion etc. If you are a member of the Co-op group you could stand and see how many other members voted for you. The Co-op group is about to change its governance structure. But it will be one based on other large successsful Co-ops ( there are 100's in the UK/world) It has changed the structure a number of times. The UK has a governance structure of 650 full time elected directors(MP's) A second board of 1000 unelected directors (£300 a day just for clocking in)because ordinary people can not be trusted to run a country, and a unelected highly paid head of state who can refuse to sign legislation. How on earth can you criticise the Co-op? you obviously know very little about it. I can understand however if your only knowledge comes from reading the national press or watching BBC TV they are frequently wrong. I had to complain twice to the BBC, before I received a written apology from them accepting their programme on the Co-op was completly inaccurate. They have I think taken more care with their research and improved since then. john harrington
  • Score: 3

10:45am Tue 15 Apr 14

Lone Ranger. says...

john harrington wrote:
The present structure is complex but one the members voted for, in the same way they voted for who sits on the district commitees. they receive £1.500 a year for a lot of work. There may be 10 ex Labour MP's but how many Ex Conservative/ Liberal etc.? Co-ops are open to all people so we dont know or care what party/relgion etc. If you are a member of the Co-op group you could stand and see how many other members voted for you.
The Co-op group is about to change its governance structure. But it will be one based on other large successsful Co-ops ( there are 100's in the UK/world)
It has changed the structure a number of times.
The UK has a governance structure of 650 full time elected directors(MP's)
A second board of 1000 unelected directors (£300 a day just for clocking in)because ordinary people can not be trusted to run a country, and a unelected highly paid head of state who can refuse to sign legislation.
How on earth can you criticise the Co-op? you obviously know very little about it.
I can understand however if your only knowledge comes from reading the national press or watching BBC TV they are frequently wrong. I had to complain twice to the BBC, before I received a written apology from them accepting their programme on the Co-op was completly inaccurate. They have I think taken more care with their research and improved since then.
You wont be popular ......... letting the facts get in the way of a good moan
[quote][p][bold]john harrington[/bold] wrote: The present structure is complex but one the members voted for, in the same way they voted for who sits on the district commitees. they receive £1.500 a year for a lot of work. There may be 10 ex Labour MP's but how many Ex Conservative/ Liberal etc.? Co-ops are open to all people so we dont know or care what party/relgion etc. If you are a member of the Co-op group you could stand and see how many other members voted for you. The Co-op group is about to change its governance structure. But it will be one based on other large successsful Co-ops ( there are 100's in the UK/world) It has changed the structure a number of times. The UK has a governance structure of 650 full time elected directors(MP's) A second board of 1000 unelected directors (£300 a day just for clocking in)because ordinary people can not be trusted to run a country, and a unelected highly paid head of state who can refuse to sign legislation. How on earth can you criticise the Co-op? you obviously know very little about it. I can understand however if your only knowledge comes from reading the national press or watching BBC TV they are frequently wrong. I had to complain twice to the BBC, before I received a written apology from them accepting their programme on the Co-op was completly inaccurate. They have I think taken more care with their research and improved since then.[/p][/quote]You wont be popular ......... letting the facts get in the way of a good moan Lone Ranger.
  • Score: 1

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