Hansard

I thank all members who have contributed to this afternoon’s debate, especially Jackie Dunbar, who very passionately articulated the essence of her motion.

Access to banking and financial services is fundamental to a strong, resilient economy and to the wellbeing of our communities. That principle holds true not only for businesses but for the thousands of charities that are working tirelessly across Scotland. Every one of us in the chamber recognises the essential role that the third sector plays. Charities and community organisations support our people, strengthen our neighbourhoods and often step in where the need is greatest. It is therefore vital that our financial systems operate in ways that enable, not hinder, their work.

Although financial services regulation remains reserved to the UK Government, we will continue to press banks and financial providers to listen carefully to their customers and to address the practical barriers that many charities face. Those organisations deserve services that reflect the realities of their work.

I will take a minute to acknowledge the contributions of members.

Liam Kerr clearly gave examples of the good work that charities do and the distinct role that the voluntary sector plays, but he also spoke about the impact of bank charges on what can be very small funds. Thankfully, many charities’ funds fall below the thresholds for charging, but that point was well made.

Other members highlighted the amazing work that volunteers do. I point out to Jamie Hepburn that 66 per cent of charities have no paid staff at all and rely solely on volunteers, which shows how essential they are.

The Scottish Government always stands ready to work constructively with the UK Government, regulators and sector stakeholders to ensure that charities across Scotland have long-term, sustainable access to the banking services that they rely on, and has previously engaged with the Financial Conduct Authority regarding the matters that have been raised by Ms Dunbar. In February this year, the FCA responded to Scottish Government officials and confirmed that it recognised the importance of third sector organisations being able to access appropriate financial services, but stated that, at present, it has not been provided with evidence indicating that charities or community groups are routinely being charged unfairly. However, it said that it is aware of broader banking challenges facing third sector organisations, and that, where it sees evidence that firms are consistently failing to meet standards, it will consider the need for regulatory intervention. I therefore encourage charitable or community organisations that feel that they have been treated unfairly to contact the FCA, so that the issues facing the sector can be recognised.

I understand that the Charity Finance Group and the three UK charity regulators are already working with the banking sector to ensure that the challenges that face the charity sector are fully understood. I express my thanks to them for the work that is already under way. The Scottish Government supports that engagement and will work closely with them and the FCA as more evidence emerges.

Charities are at the forefront of supporting some of the most vulnerable people in our society, and they respond daily to economic pressures and social challenges. To do that effectively, they must have reliable and timely access to their funds. Robust financial governance is a cornerstone of charity regulation, and appropriate financial controls are central to that responsibility. Charity trustees carry a clear legal duty to protect their charity’s assets, and they must have systems in place that allow them to fulfil that duty confidently.

For all those reasons, we will continue to do what we can to promote banking services that work properly for the third sector. Those organisations, which provide vital services, deserve a financial system that recognises and supports their contributions.

I recognise the challenges that are being faced. That is why the Scottish Government is committed to delivering fairer funding for the third sector. Our initial fairer funding pilot provided £130 million in multiyear funding. We are building on that with the announcement in the budget that disabled people’s organisations will receive a separate three-year funding agreement. Just last month, we announced additional multiyear investment in the delivering equally safe funding to national providers of advice services. All of that together means that almost half the total value of the third sector grants in the social justice portfolio in 2025-26 is now covered by multiyear funding agreements.

We want to go further and build on the progress that we have made, which is why the Cabinet Secretary for Social Justice announced that we will work with the third sector to deliver Scotland’s first-ever third sector partnership to further strengthen the role and place of the sector in Scotland. That new partnership will create a unique and valuable opportunity for Government to work more effectively with the sector and build on that progress.

To conclude, the third sector plays an indispensable role in our national life. It is essential that financial services work for it in practice, not just in principle.

Meeting closed at 18:09.