PUBLIC money is set to be pumped into a financial cooperative, ahead of an anticipated wave of residents facing money issues seeking its help.

Darlington Borough Council’s leading members are set to approve helping expand the town’s credit union as part of its strategy to address a consensus among staff at citizens advice, food banks and the authority’s housing management and benefits services of “growing evidence of financial hardship” in the town.

The agencies say while the increase in financial issues is affecting all groups, those on low or insecure wages are being particularly affected and believe demand for the credit union’s services “has never been greater”.

Councillors said they also remained determined to avert the consequences for families of borrowing from loan sharks for such things as white goods, the additional costs of Christmas or unforeseen household repairs.

The move comes just weeks after it emerged complaints about how lenders are treating financially vulnerable customers to the Financial Ombudsman Service reached its highest level on record last year.

An officers’ report to the authority’s Cabinet states membership of Darlington Credit Union had risen from 400 when it was founded in 2009 to more than 6,500, and this was increasing on a monthly basis.

The authority’s leader Councillor Bill Dixon said it had been predicted 1,500 more families would need to use its services. He claimed the rise was partly being fuelled by flawed changes to the benefits system, which led to claimants facing sanctions, the overwhelming majority of which were later repaid.

He said the credit union deserved further support from the council as banks were refusing to help residents in the town on “incredibly low wages and most people who haven’t had a pay rise in many years”.

Cllr Dixon said the uncertainty surrounding Brexit was further exacerbating the situation by sparking “an absolute crash in inward investment” among some firms in the town.

Councillors are set to recommend the authority increases its deferred shareholding in the credit union by £50,000 to enable the union to give low-cost loans to people who live or work in the DL postcode area.

The council said residents had shown support for the move in its Medium Term Financial Plan for 2018/19 to 2021/22 consultation, backing a fund to address the financial hardship and deprivation found in households and neighbourhoods across Darlington.

Cllr Dixon said: “This is what the credit union have asked for. This is not a figure we have plucked out of thin air.”

He also urged residents to consider investing savings into the credit union as it had comparable rates with some banks and would enable the union to help more local people.

He added: “I have done it myself and have encouraged my friends to do it as well.”