11-05-2025
The bank ‘vanity project' loved by Reeves but causing chaos for customers
If you live outside a major city, you may well be marooned in a 'banking desert'.
Decades of branch closures and a shift to online banking means that popping into town to cash a cheque or print a statement is, for many, a thing of the past.
The proposed solution – conceived under the Tories and now championed by Labour – is banking hubs.
Banking hubs are shared spaces funded collectively by Britain's biggest high street banks – including Barclays, Lloyds, NatWest and HSBC – and run by Post Office staff.
They are typically open Monday to Friday, with representatives from each bank dropping in once a week on rotation.
Rachel Reeves, the Chancellor, is a fan. In December, she opened the country's 100th in Darwen, Lancashire and has pledged to deliver 350 by 2029.
But are these 1,000-sq ft hubs really the solution to the country's banking access crisis? Critics point out that they can often only facilitate basic transactions, with many lacking printers and ATMs.
What's more, around 16,000 bank branches have closed their doors since the 1980s yet just 156 hubs have been installed to replace them.
Details of the scheme's funding are kept under wraps, with banks handing over undisclosed amounts of cash whenever organisers request it.
It is little wonder campaigners labelled the banking hub drive a 'vanity project' designed only so politicians can 'pat each other on the back'.
'Woefully inadequate'
The number of bank branches has collapsed from more than 21,000 in 1986 to fewer than 5,000 in 2025, data from the British Banking Association shows.
More than 6,300 of these closures have occurred in the last decade. Some 33 of the UK's 650 constituencies had no bank branches at the end of last year.
The big banks say they are cutting branches in response to lower demand for in-person banking. This is almost certainly true.
Even so, the closures have hit a vulnerable minority of customers who tend to be older, less technologically savvy and more likely to rely on cash.
There are now 156 hubs dotted across the country, from Acton, West London to Yeadon, West Yorkshire. Another 80 will open this year.
But progress has been slow as the rollout has been plagued by delays. The hubs need to be accessible to disabled customers, and have a safe, meaning not every available space is suitable.
Martin Quinn, campaign director of Campaign for Cash, told Telegraph Money that the hubs were a 'great idea in theory' but the 350-hub target is 'woefully inadequate'.
He said: 'If we've lost nearly 6,300 [branches] in the last decade, how the hell is 350 going to plug the gap? This is really a drop in the ocean. If the banking industry were really serious they would be rolling out 10 a week.'
He added: 'Everyone's patting each other on the back, politicians included. But [banking hubs] are a sticking plaster. They need to be turbo-charged.'
Analysis by the Payment Choice Alliance campaign group found that most of the 7,000 communities with populations of less than 35,000 will be without an ATM or bank branch by the end of this year.
All of those communities require at least one 24/7 ATM while those with between 5,000 and 35,000 people – roughly 1,200 – merit a banking hub, the group said.
Lack of facilities
Campaigners point out that the facilities available at the hubs are too limited.
The shared spaces have a private room where customers can discuss sensitive details on the days that the 'community banker' from their bank is in.
Otherwise they are limited to basic operations like balance enquiries, paying in money and changing their Pin.
Many hubs have no printers installed, leaving customers unable to get paper statements which may be asked for by employers or landlords.
And crucially, the hubs do not have ATMs embedded in the external or internal walls as in traditional high street branches.
Some customers have complained that the facilities on offer at banking hubs are either lacking or unpredictable.
Customer John Marsh of Sheringham, Norfolk, wrote in to The Telegraph last week: 'I was told that I couldn't pay in cash or cheques, nor withdraw cash.
'Upon enquiring what was possible at the hub, it transpired that staff could help me with my pension planning, direct debits and insurance. Perhaps other hubs will be different.'
Ron Delnevo, chairman of the Payment Choice Alliance campaign group, called the hubs a 'vanity project.'
He said: 'ATMs are absolutely fundamental. There needs to be a specification for these banking hubs.
'The Government, the Financial Conduct Authority (FCA), the Treasury are all dragging their feet on the cash access crisis. It's like the captain of the Titanic saying, 'Let's plough into the iceberg and deal with the fallout later'.'
However, Dennis Reed, director of senior citizens organisation, Silver Voices, welcomed the little support hubs do offer.
He said: 'We have to be realistic. So many population centres no longer have a bank branch and people have to travel – so banking hubs are better than nothing.'
Strict criteria
Banks and building societies must assess whether communities have reasonable access to cash when they close branches, under rules enshrined in law and governed by the City watchdog, the FCA.
If not, then they will need to provide more facilities – including banking hubs – before closing a branch.
Link, the cash machine network group, decides whether a community should qualify for a hub and where it should be located.
Cash Access UK – a not-for-profit company owned and financed by nine of Britain's biggest high street banks – is tasked with delivering the hub. This is easier said than done.
Cat Farrow, chief customer and strategy officer at Cash Access UK, said: 'We're at the mercy of the property market. It's not always easy to acquire the premises or to make necessary changes to transform them into banking hubs.
'They need to be about 1,000 sq ft. We try to bring these buildings up to a good standard and make sure that they're completely accessible. It's a challenge.'
To decide which communities should get a hub, Link uses a set of criteria that it drew up with the banks in 2022, and then updated to align with FCA rules in September 2024.
Link weighs up how far people would have to travel to get to their nearest branch and how much this would cost them. It considers how many people live nearby and how likely local people are to use cash.
Nick Quin, of Link, said: 'Deprivation is a big driver of cash usage, as well as how many people are digitally excluded and how old people are.'
Link's website states that hubs work best when there are at least 10,000 people in the local area – defined loosely as the area the high street serves – and at least 70 shops in the area that take cash.
Quin said the criteria were more like 'rules of thumb' and that Link regularly carried out assessments on the ground.
Yet campaigners believe the criteria are too strict and should be loosened to speed up the rollout.
Delnevo, of the Payment Choice Alliance, said: '70-plus shops is a damn high bar. How many communities have that many?'
No obligation
There are also concerns banks could pull the plug on the project whenever they wish.
In the Financial Services and Markets Act 2023 and the Financial Conduct Authority's access to cash regulations, there is no requirement to have a 'community banker' present at the banking hubs.
The group of Britain's biggest banks signed up voluntarily to the banking hub idea before the legislation was introduced.
It means that while all banking hubs currently have community bankers visiting on rotation, banks have no obligation to keep this service going.
The banks have not disclosed how much money Cash Access UK has to draw on to set up banking hubs.
