Public and Commercial Services Union

Progress towards a PCS Credit Union

Background

This report summarises the work undertaken by the PCS Credit Union (PCS CU) Team to date. Detailed work is being carried out to set up a PCS Credit Union in line with Conference policy.

To help achieve this we are approaching the completion phase of the production of key documents.

We are also embarking on a high profile promotional campaign to capture sufficient levels of interest with the aim of a 2008 launch.

In our campaign we will continue to highlight the benefits of credit unions, some of which are:

• A convenient way to save
• A low cost way to borrow
• Insurance on savings and loans are paid for by the Credit Union
• Owned and run by the members
• Regulated and insured so members know their money is safe.

The following lists the areas of work and subsequent progress made against each milestone:

1. Member interest

The response from our members to the prospect of PCS establishing a credit union has been positive, with 2184 registrations of interest to date. (Please see Appendix B.).

We are informed by the consultant that the above level of interest is healthy for a credit union that has not yet launched, but offers no grounds for complacency.

Our initial target is to have 5,000 members in order to create the financial base from which we can grow.

We therefore need many more members to sign up to join/help run the CU as having a substantial number of CU members/local coordinators in every workplace is absolutely vital for the credit union’s success (See the ‘Promotion Campaign’ section below for an outline of the measures planned to try and achieve this increase in membership interest.)

2. Volunteer interest

With regard to the number of members who have expressed a desire to help with the running of the CU, we have received interest from 532 members. (Please see Appendix B.) Each of these members has been sent a volunteer registration form to complete along with the job descriptions for the relevant posts (the pink form). A total of 225 volunteers have completed and returned their forms. The remainder of the volunteers who have not yet done so have been contacted by telephone/email to establish whether or not they are still able to volunteer their help.

The necessary level of education will be provided to all those who have volunteered to help with the running of the CU.

The Projects Manager and the CU consultant are encouraged by this response and if this trend continues the PCS CU will have sufficient volunteers by launch date.

3. Software contract

Securing the most suitable software package for the CU has been crucial. A tendering exercise was carried out to assess the merits of competing bids for the software contract, with cost implications, functionality and quality examined.

Specifications were received from the six potential software suppliers invited to submit tenders; these were then appraised by the Consultant, ITT Director and CU Manager and a shortlist drawn up.

This process was critical as the software selected must be able to perform in accordance with the CU’s guidance and procedures. Interviews with each software supplier were held, with the panel consisting of members of the Steering Group Committee, including the ITT Director. A thorough demonstration with live data was given. Following site visits of the software supplier’s clients, recommendations were made to the AGS office.

Following this process, the PCS Software Team decided upon Fern as their chosen supplier due to the specific attributes provided by their software, in combination with the make up of Fern’s client base (including the Police Service NI and Civil Service CU) and their extensive experience and expertise.

The Civil Service CU is very similar to our set up and structure.

The commencement of serious negotiations with Fern on the cost of supply, advice and usage (to the union) took place and a firm quotation was agreed.

The software contract has been signed, with terms and conditions that are very favourable for the needs of the CU and its available budget. The Project Manager and ITT Director are drawing up recommendations on the installation programme and accommodation of the software. The date of implementation is April 08’.

4. Key documents (Please see Appendix A)

The drafting of the following documents is in progress:

1. Job descriptions relating to the Board of Directors, Presidency, Treasury, Regional Coordinators etc.

2. Common Bond document that provides information for those who qualify to join the PCS CU. It provides proof that all members interact with the PCS Trade Union and is an academic document to justify the setting up of the PCS CU.

3. The Rule Book that gives coverage of PCS CU rules and will be used as a basis for shaping PCS CU policy.

4. Policy/Procedure and Admin Manuals offer a framework for guidance, organisation and operational functions.

5. Training manual facilitates the structure and content of the training that will be given. We are aiming at the completion and delivery of these documents by May/June.

5. Strategic business plan

A draft of the Strategic Business Plan which maps the path to be pursued to produce a successful trading entity has been circulated to the Steering Group for comments.

This document will set out the objectives, financial plan, membership terms and management arrangements. Once cleared it will form part of the documentation submission to the Financial Services Authority (FSA) by 1 July 2008. It takes the FSA up to 3 months to respond with a decision.

6. Membership application pack

The draft of the Membership Application Pack that was produced by our consultant has been analysed by the CU Project Manager and circulated to the members of the CU Steering Group to invite their comments. The Project Manager has since produced action points and recommendations pertaining to the Membership Application Pack.

The Mandatory and Discretionary forms which form the bulk of the Membership Application Pack have been compiled. The text and lay out of the forms was carefully considered by the Project Manager and decisions were made regarding which areas of the Discretionary Form should be presented in the format of loose leaf inserts.

In drafting the overall content of the Membership Application Pack, care was taken to meet all the necessary legal obligations whilst ensuring forms are user friendly. Careful consideration was given to the language used in the pack as it needs to be clear, plain and straightforward.

The Membership Application Pack has been scheduled to reach the designers in the Campaigns Department on 24 April, and will be distributed to members in May.

7. Meetings

A series of CU meetings have been held over the course of the year involving the CU Steering Group, the Project Manager, the Consultant, the AGS office and the Campaign team. Regular reports are submitted to the NEC and Finance committees.

Inter-union discussion is on going; we are in communication with such trade unions as the Baker’s Union and RMT, on the TU-CU Forum, and the Civil Service CU in Ireland with regard to issues involving the performance of the software. This exchange of ideas will benefit the CU and highlight the way towards possible collaboration with other trade unions regarding the CU’s further development.

A TU-CU Forum Briefing was held at the TUC Congress on 11 September 2007. BAWU participated and PCS chaired it. This forum was to explore the idea of a single ‘TUC Credit Union’ being created based upon a common bond of Trade Union membership. Discussion of the dynamics that would be involved if this was to be possible is in progress. The briefing was successful and follow up activities have been carried out.

8. Staff resources

The essential roles and tasks that must be completed at this important stage of the CU’s formation are being fulfilled by the following staff members:

• Molly Moyo, who project manages the development of software, finance systems, and production of key documents to establish the CU.
• Barry Epstein who is the CU Consultant drafts key documents and continues to provide technical/consultancy advice.
• Laura Cockram and Geoff Martin will co-operate on the production of campaign materials and the planning of the regional road-shows (GM - external expertise re: campaigning)
• Angela Maughan will act as the initial point of contact with the AGS office on all aspects of the CU.

Due to the large volume of CU work e.g. telephone calls, emails, correspondence, data input and maintaining/updating the CU database system etc, it became necessary for the CU to recruit an administrative assistant. The PCS CU has now filled this post that covers a wide range of administrative tasks as outlined above.

9. Training programme (Please see Appendix A)

Training programmes are being prepared for CU Local Co-ordinators, CU Regional Co-ordinators, Directors and Board Officers. All candidates for office should first undertake the training programme, as upon election full responsibility is assumed for the care and custody of the CU. Training will also need to be drawn up once decisions are made on the recruitment of a Chief Executive.

Credit union regional coordinators

The role of a CU Regional Coordinator entails the following: Attending to all the duties and tasks of a Board member, providing regular reports to the CU and Board of Directors, regular liaison with CU Local Coordinators and general executive duties as required for the post.

Credit union local coordinators

CU Local Coordinators will be responsible for the following: Providing regular updates to the CU Regional Coordinators with regard to the CU, raising awareness of the CU by holding local meetings, putting up posters in the workplace, distributing leaflets and communicating via the internet, as well as distributing application forms and claim forms. Dealing with queries about the CU in the workplace, by telephone and electronic mail will also be central to the role.

The local coordinators will be educated in their respective roles by the CU Team whilst on campaign visits.

Board of directors

The board of directors in session will determine all the policies and procedures of the CU, with the execution of them delegated to the Chief Executive Officer, although retaining responsibility in law for their prudent execution. Individual Directors will also be expected to serve as CU Regional Coordinators, and will recruit and train CU Local Coordinators within their designated region.

An education and development course for the Board of Directors (2 per region) will be carried out in June/July by the CU Consultant and Projects Manager. These tutorials will be scheduled to take place over the course of one long weekend. The consultant is working on developing training modules and it is envisaged they will be ready in May.

Board officers

The credit union will have Board (honorary) officers, namely the Presidency, Treasury, Secretariat, Internal Audit (Supervisory), Loan Delinquency, Money Laundering Prevention and Reporting Officers, who will receive education and training that equips them to carry out the following roles:

• The Presidency – with oversight of entire operation
• Vice-Presidency – deputising for the above, and serving as the Delinquent Loans Officer
• Treasury function – all aspects of financial planning, management control and presentation of accounts to the Board and to Members, assisted by the CEO
• Secretariat –‘company secretary’, assisted by the CEO, dealing with all legal and regulatory matters
• Credit committee and/or Loans officers – credit control and underwriting process acting within policies and procedures laid-down by the Board of Directors
• Supervisors/ internal audit functionaries – review and report financial findings and carry out general audit and executive duties
• CEO – day to day running of the CU, reports to the President.

Administrative assistant

The administrative assistant has been trained on all aspects of the CU.

10. Structure of the credit union

The CU will be organised on a Federal Constituency basis from grassroots upwards. A comprehensive communications network extending to all the CU Local Coordinators is being established.

The current day-to-day management and control functions are based at PCS HQ (with the Project Manager working to the AGS).

As mentioned earlier, the Board of Directors will be drawn from the CU Regional Coordinators but the roles will need to be independent from those of the Trade Union. These individuals would be responsible in law jointly and severally for the care and custody of the CU and members’ money. Therefore, from the outset it is important to establish the separation of powers between officers of the Trade Union and that of the CU in order to ensure sound corporate governance and avoid any potential conflicts of interest.

The Board will consist of nine members selected from the CU Regional Coordinators, with one board member per region. It is wise to have an alternate Director for each region in case of illnesses, holidays, maternity leave etc. It is suggested that a policy then be adopted to elect by a rota of thirds so that intellectual property is preserved and continuity maintained. The Board of Directors of the CU must meet monthly and we are exploring how this can happen through a telephone conference to save on time and costs. At certain times of the year the Board of Directors will have to meet with the supporting committees and Chief Executive Officer to perform specific tasks, such as a Strategic Planning.

Once the national Common Bond (i.e. the legal field of membership) has been authorised by the Financial Services Authority, the operation can begin on a branch by branch or regional basis, with 20-30 branches involved in the initial test bed.

11. Auditors

A list of auditors was prepared, considered, and a short list of 6 was drawn up. An invitation to tender has now been sent out to the short list. The dates of the interviews will be arranged in due course and the panel will consist of the CU Team members.

12. Promotion campaign (Please see Appendix A)

The campaign team

We have drafted a detailed campaign plan/strategy for the CU in order to increase the number of members interested in signing up to join and help run the CU. Geoff Martin (Campaigns Co-ordinator) has now been commissioned in the implementation of this campaign strategy. He will develop and run the campaign in liaison with the AGS, Campaign Officer and Project Manager.

Materials

Promotional materials e.g. articles/inserts/adverts are produced and distributed in the PCS View and Group Journals on an ongoing basis highlighting the benefits of the CU. Another promotional article about the CU appeared in March’s edition of the PCS View. We will continue to feature these in members’ publications. A new publicity leaflet promoting the PCS CU has been designed and is near completion for issue to branches and use in the planned roadshows.

Campaign visits

Regional road-shows, meetings of regional volunteers and branch visits are being planned. The high profile publicity campaign in branches and regions will commence in April in the North West Region.

Conference stands

It was decided at the Steering Group meeting (6 February) that we purchase 10 CU stands as part of our campaign and promotion strategy throughout the regions. The design of these has been agreed and is underway. These are intended for use in workplace e and branch promotion visits.

13. Credit union presentations

The Projects Manager has already conducted presentations to PCS TU members, Full-Time Officers and Branch Representatives and these met with a positive response, i.e. in Victoria (Learning Centre) and Cheltenham. Further presentations are planned for the future with the aim of maximising awareness of, and support for, the CU initiative in the months ahead.

14. Budget

After careful analysis and assessment of the past and future costs for this work, we were allocated a budget of £34, 000 in 2007 and this has been accounted for properly in the year.

It is absolutely crucial that we comply with the CU regulations, guidance and procedures in our set up costs thereby minimising exposure to risk. In view of this and the resources needed for developing a CU, this year’s CU budget is £50, 000.

Our budgets are presented to/and scrutinised by the Finance Committee and the NEC for decision. 2008 budget covers the major activities associated with it e.g. publicity and implementation costs.

In order to establish a three year budget the software must first be in place, as it will be used to carry out cash flow, trading and performance projections.

The start up costs of the CU will be met by the PCS trade union, but it is understood by both parties that the CU will aim to become financially self-sufficient of the trade union within three years of its launch (as early as possible).

This information will be required by the Financial Services Authority (FSA) in submitting a business case on behalf of the CU.

15. FSA Submission/Clearance

We are planning to submit the relevant documentation to the FSA by 1 July 2008. It takes up to 3 months for the FSA to respond with a decision.

Launch

We aim to meet the target dates set out in the outlined schedule (Appendix A) and this will allow us to make the judgement on the precise launch date.

Progress will continue to be reported to the NEC.

Conclusion

In view of the additional staffing resources that have now been deployed, the campaigning strategy, the progress achieved on software installation and the production of key documents, indications are that it will be possible to move towards identifying the likelihood of a 2008 launch for the CU.

Firm proposals for implementation and launch will be presented to the April 2008 NEC and 2008 ADC.

Chris Baugh, assistant general secretary, 7 April 2008