Using the Bank's branches to receive and make payments on behalf of other Birmingham Corporation Departments (and later, other agencies)
began at an early date in the BMB's history, as the following chapter (entitled Utility Services of the Bank) from J P Hilton's book
Britain's First Municipal Savings Bank testifies:
An important step was taken in the spring of 1921, when Mr J H Broadley (the
new secretary of the Water Department) evolved a scheme for reorganising his department. Included in that scheme was a proposal for
using the Bank in the collection of water accounts, thus permitting of a reduction in the staff of cashiers, the whole of whom, under
the administration of the department, could not have been fully employed on work of that nature.
The proposal, which met with the unanimous
approval of the Water Committee and the Bank, provided for ratepayers being afforded the opportunity of paying undisputed accounts
at Bank counters; the accounts to be receipted on behalf of the Water Department, to whom particulars would be supplied as to the
accounts to be dealt with; the money received to be credited to the department; and a payment to be made to the Bank for services
in respect of collection.
The scheme is simple and has been an unqualified success, as the following figures of accounts dealt with
during different periods show:-
Six months ended March 31st, 1922 ..... 5,855
Year
Ended March 31st, 1923 .............. 15,700
Year Ended March 31st, 1924 .............. 20,480
Year Ended March 31st, 1925 .............. 24,501
Year Ended March 31st, 1926 .............. 28,373
Year Ended March 31st, 1927 .............. 35,508
The result of this close co-operation has been mutually beneficial. It has enabled
a reduction to be made in the number of cashiers in the Water Department and paved the way for their employment in other directions;
it has introduced to the Bank many depositors and resulted in more daily branches being opened; it has enabled the Bank to take into
its service several officers from the Water Department and provide them with posts equal to those they held or might aspire to in
their old department. It has, moreover, effected economy in civic administration.
The rapid development of the Electric Supply Department,
which has resulted in increasing numbers of householders using electric light, called for additional facilities to be provided for
the payment of consumers' quarterly accounts. The experience of the Bank in collecting water accounts, caused Mr E J Jennings (secretary
of the Electric Supply Department) to consider whether similar arrangements could be made to meet the requirements of his department.
Steps were taken to arrange a scheme whereby electricity accounts could be paid at certain branch Banks.
As the scheme was experimental,
it was limited to branches serving the outlying parts of the city, leaving the Electric Supply Department to deal with the remaining
areas at their own offices. It was not long, however, before it was felt desirable to extend the scheme, and arrangements were accordingly
made so that consumers could pay their accounts at any office of the Bank within the discount period.
The following figures of accounts
dealt with will indicate how the scheme is developing:-
Year Ended March 31st, 1926 ................ 4,588
Year Ended March 31st, 1927 .............. 15,779
For many years the Gas Department had provided facilities for collection of gas accounts
at various depots, chemists' shops, gas fitters' shops, etc., but the facilities provided by the Bank for water and electricity accounts
naturally resulted in a demand being made for similar facilities in respect of gas accounts. Accordingly, Mr A W Smith (general manager
and secretary of the Gas Department) arranged with the Bank that gas accounts should be collected at Bank centres in a similar manner
to that operating for electricity accounts. Although this scheme only came into force in respect of gas accounts with a discount date
for October, 1926, the Bank dealt with 12,238 gas accounts up to the 31st March, 1927.
Yet another instance of co-operation is afforded
by the Salvage Department, whose superintendent (Mr James Jackson) evolved a scheme whereby householders could arrange to hire dust-bins
from the department on payment of a small charge per annum. How to collect this small charge presented a difficulty, but it was surmounted
by the Water Department sending out an account along with the water account, and arranging for the Bank to collect two at the same
time. Up to the 31st March, 1927, the Bank had dealt with 613 payments in respect of hire of dust-bins.
The question of collection
of rates presented a difficulty owing to the special requirements and responsibilities of the Overseers, who were a separate local
authority. The Bank could not deal with rate demand notes in the same way as Corporation accounts were dealt with, because the regulations
required the demand notes to be receipted by a duly appointed assistant overseer.
To meet the wishes of a few depositors, however,
a scheme was devised for payment of rates through the personal accounts of the depositors, and in February, 1921, this scheme was
instituted. Depositors signed a form authorising the amount to be paid over to the Overseers, the authority acting as a receipt for
money withdrawn from the depositor's account. The demand note was left at the Bank, and transmitted to the Overseers at the end of
the day, who, in due course, receipted the note and returned it by post to the depositor.
The Overseers ceased to function at the end
of March, 1927, their places being taken by the Rating and Valuation Committee, now a standing committee of the City Council. It is
hoped that it will soon be possible to arrange for collection of rates on lines similar to those for other Corporation accounts, and
that the citizens will have one more boon conferred upon them, and the Corporation be enabled to effect one more economy.
In these
days, anything which will contribute to economy in public administration should be welcomed, and the Bank can claim some credit in
helping towards that end. The arrangements now in force tend to prevent overlapping in collection of accounts, and are an undoubted
convenience to the public. Instead of journeying to town and visiting the Water Department, the Electric Supply Department, or the
Gas Department, the public can step into a branch of the Bank near to their homes and pay all three accounts. The provision of the
same facilities for rates will make up the quartette.
The Bank was able to render service to land settlers in connection with the Land
Settlement (Facilities) Act, 1919, which authorised county or county borough councils to advance money to approved applicants for
the purchase of live stock, fruit trees, seeds, fertilisers and implements. A scheme was prepared in May, 1920, to deal with this
matter, and the sanction of the Treasury and the Ministry of Agriculture and Fisheries obtained thereto. The applications, so far
as Birmingham was concerned, were dealt with by the Agricultural and Small Holdings Committee, with the exception of one case from
the Warwickshire County Council. The Council concerned guaranteed the Bank against loss, and decided how the advance should be used
by the applicant. The Bank charged interest at the rate of 5 per cent. on these loans. Altogether forty-one loans were made, but all
have now been paid off.
Another example of usefulness of the Bank was afforded in April, 1920, when the Finance Committee had to arrange
for cashing interest coupons in respect of local housing bonds. A large number of these bonds, particularly of the lower denominations,
were taken up by the citizens, and wide opportunities were desirable for cashing the coupons each half-year. This was where the offices
of the Bank proved very useful. With so many branches conveniently placed, it was easy to help the Finance Committee in this matter,
and to make arrangements to cash all coupons in respect of bonds of the values of £5, £10, £20 and £50. No less than 21,178 coupons
were dealt with during the period the bonds were in force.
Pressure was brought to bear upon the Bank to sell national savings certificates at
the various offices of the Bank, and in December, 1920, arrangements were made for these certificates to be available for any person
desiring to purchase same. Little business, however, was done in this direction. The majority of depositors in the Bank are not those
who can afford to purchase certificates in the hope of retaining them intact until maturity date, and to save by this method, merely
to cash them when wanting money, has no particular attraction. The opportunities provided by the Post Office in Birmingham for purchasing
these certificates, are, in themselves, sufficient, and as the sales over our Bank counters were so small the practice of dealing
with them has been abandoned.
J P Hilton made no reference in his book to the Bank charging for the collection of Utility Accounts,
merely stating that the system brought economy in civic administration. It is likely that charging commenced in 1926 when the facility
to pay Electricity accounts was added to Water bills.
The subject of charging was reviewed on February 16th 1948 when the Finance
and General Purposes Sub-Committee presented a report to the Bank’s Committee. At this changeable period, just after the end of the
War, the Bank’s salary costs were rising (due to the imposition of national standards through the ‘National Charter’) and the electricity
and gas industries were about to be nationalised, and would thus no longer be part of Birmingham Corporation.
Report: Collection
of Corporation Accounts
The charges made by the Bank for the collection of Corporation accounts for the period since 1926 have
been as follows:
1926
15/- per 100 accounts
1930 reduced to 10/- “
“ “
1941 increased to 15/- “
“ “
1946 “
“ £1 “ “ “
Since
the meeting of the Bank Committee in February 1946, when the charge was increased to £1 per 100 accounts, the costs of administration
have further increased, particularly in view of the National Charter.
The question of collection of Corporation accounts was
referred to at the Bank Committee meeting on the 19th May 1947, when I was instructed to report thereon nearer the vesting date of
the Electric Supply Department in the British Electricity Authority.
If the Bank did not collect Corporation accounts, the staff
would be reduced by 50 officers, which would mean an approximate reduction in the salary bill of £13,000, based on the lowest salary
of each of the Branches concerned for the year ended 31st March, 1947. At 24 Branches where no additional staff has been engaged,
no charge is included for Corporation accounts collected.
The accounts dealt with during the last financial year ended 31st March
1947, were as follows:
|
Accounts collected |
Contribution (£) | ||
|
|
No. |
Amount
(£) |
|
|
Electric Supply |
439,466 |
508,855 |
4,395 |
|
Gas |
200,623 |
352,290 |
2,006 |
|
Water |
132,130 |
178,445 |
1,321 |
|
Rates |
101,254 |
885,922 |
1,012 |
|
Home Assistance |
100,127 |
135,303 |
1,001 |
|
Public
Health (Tuberculosis Scheme) |
24,614 |
34,783 |
246 |
|
Salvage |
6,194 |
936 |
62 |
|
Public Health (Midwives) |
2,364 |
19,666 |
24 |
|
Evacuation |
17,908 |
5,479 |
179 |
|
1,024,680 |
2,121,679 |
10,246 | |
Thus
the amount contributed falls short by over £2,700 purely in the cost of estimated salaries of additional officers. If, however, the
full impact of management expenses and establishment charges is taken into account for the year ended 31st March 1947 and spread over
the whole of the Bank transactions, using the ratio of:
3 Corporation accounts = 1 deposit
4
“ “
= 1 payment
5 “
“ = 1 House Purchase transaction,
the estimated cost of collecting Corporation
accounts is approximately £1. 11. 11d per 100, or 3.83d each.
By collecting these accounts, the Bank has received some compensatory
advantages, as the public when visiting the offices were encouraged to make deposits at the same time. The main advantages in this
respect was gained when the scheme was first introduced for Water accounts in 1921, and many deposit accounts were opened as a result.
With the subsequent collection of Gas, Electric, Rates, etc. the Bank did not benefit to the same extent, because each person is concerned
in several different Corporation accounts.
As the Committee are aware, the British Electricity Authority is shortly to take over
the Electric Supply Department. The Town Clerk states that certain agency arrangements are to be discussed between the representatives
of the Association of Municipal Corporations and the British Electricity Authority. Further, he has mentioned to the Chairman of the
Regional Board for this area, that the Bank, he thought, would be prepared to continue the service of collection of accounts if desired
by the Electricity Board, subject to the discussion and settlement of adequate terms and conditions.
Careful consideration has
been given to the question of whether the charge should continue to be based on the number of accounts collected, or should be altered
to a percentage on the amounts collected. Anomalies occur in either system. The fact remains that the people themselves appear at
Bank counters and have to be dealt with by Bank staff. The number of accounts is therefore of prime importance, while the amount,
within limits, is secondary. At the present time, the Bank collect approximately 43% of the ordinary meter accounts.
In order
to meet increased present day cost, I recommend a charge of 30/- per 100 accounts collected, which, for the first time, includes a
proportion of Management Expenses.
When the new rate has been formally accepted by the British Electricity Authority, the question
will arise of adjusting charges of other Departments.
The Gas Industry is to be nationalised and it is not yet known whether
thereafter accounts may still be paid at Bank counters. When the National Assistance Bill is passed, I understand that Home assistance
allowances will be paid through the Post Office, as also will Tuberculosis Scheme allowances under the National Health Services Act.
The Evacuation fees still being collected relate only to arrears, and will gradually cease.
Your Sub-Committee recommend that,
upon the transfer of the Electricity Supply Undertaking to the British Electricity Authority, the charge for the collection of electric
supply accounts by the Bank be increased to 30/- per 100 accounts; it being understood that, at the same time, a similar charge would
be made to other Corporation Departments concerned for the collection of their accounts.
By April 1948, all the departments of
the Corporation had agreed to the new charge of 30/- per 100 accounts - the last being the Salvage and Stables Committee in respect
of the payment of dustbin hire accounts. Electricity supply in the Bank’s area was now vested in the Birmingham and District Sub-Area
of the Midlands Electricity Board, which area also now included the Borough of Sutton Coldfield.
As can be judged by the transaction
statistics for the collection of Utility Accounts, this was a very popular service - particularly well-liked with consumers as the
Bank’s extensive branch network meant that a convenient office was not far away.
The charge made by the Bank for this service
was reviewed more frequently in following years, particularly in periods of high inflation. The fees received were a valuable source
of Sundry Income. This was particularly so after the introduction of the Credit Transfer system in 1962. This system eventually allowed
all types of bills to be paid over the counter of any bank. A charge was payable by the consumer unless they held an account with
the bank where the payment was made. As most of the citizens held accounts with the BMB, and were in the habit of paying their bills
there, the collection of the accounts through the Credit Transfer system would have incurred high costs for little income. Fortunately,
the special arrangements that had existed for nearly 40 years continued, and were not ended until the 1980s (on the dubious basis
of rationalisation) when the Bank was part of TSB England & Wales.
Although the General Manager referred to some compensatory
advantages in the taking of Utility Accounts, he also acknowledged that this was mainly achieved when the system was first introduced.
In later years, particularly when ‘due dates’ for bills were imminent, the Bank’s counters would often be swamped with this type of
non-bank business, resulting in depositors wishing to conduct a transaction on their account, having to wait in a long queue. This
was a particular problem, due to staff shortages, during the Second World War, and a possible solution was included in a report of
the Finances and General Purposes Sub-Committee dated February 16th 1942:
Report: Review of Departmental Activities
Your
Sub-Committee have considered and approved a report of the General manager, dated the 12th January, 1942, and a supplemental and explanatory
letter thereon, dated 5th February, 1942. Thereon the General Manager has been directed as follows:
1 At larger branches to arrange
for Corporation accounts to be dealt with at a section of the counter not devoted to ordinary Bank business.
2 To request departments
concerned to print on their accounts or attach a slip thereto, urging the public to avoid Fridays and Saturdays
when
paying such accounts.
3 To notify the responsible officer concerned that the bank cannot continue to pay wages to each civil defence
worker, but can arrange to
make payments to one person only in respect of workers employed at each Post or Station.
4
To arrange as far as possible that ground rents on properties in mortgage to the Bank shall be paid direct by the mortgagor, but without
taking any action at the present time to amend the Regulation governing the matter.
In October 1947, the Finance
and General Purposes Sub-Committee authorised the General Manager to give directions to the Branches that in future all Corporation
Accounts will be accepted without question during the Friday evening hours of business. However, the ‘ban’ on taking such accounts
on a Saturday morning continued.
One particular advantage to the Bank of taking Utility Accounts was the inflow of cash. This
was not relevant in the early years of the Bank, as there was a general inflow of cash resulting from deposits exceeding withdrawals.
After the War, when the crediting of salaries and wages directly to bank accounts gradually became more widespread, there was an outflow
of cash. This was offset at times by the inflow from Utility Accounts, resulting in branch managers being able to reduce their orders
for cash deliveries.
Statistics recording the Bank's handling of Utility Accounts, the sales of National Savings products, and other
ancillary items, are detailed on separate pages.
The Bank's records show that National Savings Certificates were sold to the
value of £17,762 in 1921/22 and £3,205 in 1922/23. Sales were reintroduced during the Second World War.
A number of services were
provided during the War for the collection and payment of accounts, and the Agency/Utility Account facility was expanded considerably
after the War. The following table shows the commencement dates of the various arrangements - the majority of which were for Birmingham
City Council.
|
|
Date Commenced |
|
|
Water |
October 1921 |
|
|
Electricity |
April 1925 |
|
|
Gas |
October 1926 |
|
|
Salvage/Dustbin
Hire |
April 1924 |
Ceased 1950 |
|
Birmingham Rates Dept. |
February 1921 (limited basis) |
Full scheme commenced October 1929 |
|
Land Settlers |
May 1920 |
|
|
Housing
Bonds |
April 1920 |
|
|
National Savings Certificates |
December 1920 |
|
|
Defence Bonds |
1940 |
|
|
Premium Savings Bonds |
1957 |
|
|
Municipal
Midwifery Service Accounts |
July 1937 |
Ceased 1949 |
|
Home Assistance Allowance |
May 1941 |
Ceased 1949 |
|
Tuberculosis Scheme Allowance |
August 1943 |
Ceased
1949 |
|
Evacuation Fees |
1940 |
Ceased 1950 |
|
Civil Defence |
1940 |
Ceased 1945 |
|
Civic Restaurants Dept. |
1952 |
Ceased 1962; also collected from 1969 |
|
Housing
Dept. Rents |
1972 |
|
|
Social Service Dept. Payments |
1972 |
|
|
Education Dept. Allowances |
1952 |
|
|
Housing Act Repayments |
1960 |
|
|
Public
Health Dept. |
1964 |
|
|
Housing Management Dept. |
1964 |
Ceased 1966 |
|
Warley (later Sandwell) Council |
1970 |
|