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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