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A council is to invest £100,000 in a credit union after the withdrawal of support from a social landlord. Hoot Credit Union, which has 5,000 members is a co-operative, community business offering affordable loans and savings to the people of Bolton and Bury . A meeting of Bolton council’s corporate affairs scrutiny committee heard that Hoot had helped around 3,000 people in the past year and had previously ‘literally rescued people from the jaws of loan sharks’. In July and August this year Hoot also issued 700 school uniform loans in Bolton, all of which came with a new savings account to start saving for next year. However the business faces a short term deficit caused by the removal of funding by key funder, Bolton at Home. A report to the committee, said: “Throughout its existence Hoot has benefited from financial support from Bolton at Home and since 2007 the social landlord directly employed all of Hoot’s staff, however circumstances within Bolton at Home have resulted in their withdrawal of their staff from Hoot in April 2024. “The withdrawal of Bolton at Home staff created an immediate challenge to the credit union maintaining sustainability in the short-term, however the release of selected accruals, and the creation of dedicated business development resource and robust growth targets has mitigated the challenges in the short term.” Hoot was originally created from the joining of the Johnson Fold and Breightmet credit unions. The report to councillors said that the forecast costs over three years of Hoot directly employing staff to replace those previously supplied by Bolton at Home, resulted in a projected deficit of around £276,000. While currently well reserved, that level of deficit will cause Hoot’s capital and asset ratio to fall beneath the levels required by the Prudential Regulation Authority, which would result in the removal of Hoot’s permission to operate and therefore its subsequent closure. Bolton council has agreed an investment of £100,000 in deferred shares to support Hoot’s capital position as a result of a period of deficit caused by the removal of funding by Bolton at Home. Chris Canham CEO of Hoot Credit Union, said: “Despite economic pressures, Hoot remains financially stable. “There is no risk of closure, and member savings are fully protected under regulatory safeguards. The credit union continues to offer a full range of services, including savings accounts, affordable loans, and financial education. “While currently well-reserved, the projected deficits may cause our capital ratios to fall beneath the levels required by our regulators, which may restrict our ability to offer the wide range of services we currently do.” Council leader Nick Peel, said: “We are so incredibly lucky in this borough to have this organisation. “It’s literally saved people in Bolton hundreds of thousands of pounds in interest payments and it’s saved people from loan sharks. “I know in the early days of the organisation they would follow loan sharks around estates in this borough checking which houses they were going to. “They would follow up discreetly and try to literally rescue people from the jaws of these quite frankly despicable people who prey on the vulnerable.” Coun John Walsh, said: “Bolton at Home are the reason we’re here. “Hoot has fulfilled an important role for their tenants and other residents. It’s sad that they’ve suddenly withdrawn support. What were being asked to do is provide the asset ratio necessary to meet the fiduciary duties of Hoot.”
