Don't get your knickers in a twist over M&S

M&S decision to open a bank is hardly groundbreaking

News that Marks & Spencer will launch a chain of in-store bank branches has deservedly attracted the attention of the consumer press. It plans to roll out in-store M&S Bank branches within a number of its stores and extend its range of products to cover current accounts this year with mortgages slated to follow next year, backed by HSBC.

But let’s not get carried away. It will take M&S two years to open the grand total of 50 in-store branches.  M&S has dabbled in financial services since 1985. In the 27 years since its launch, it has introduced a limited range of products and grown its customer base to just 3m. Last year, it made turned a profit but a modest one of £50m.

Meantime, the Cooperative is pressing on with plans to expand its number of in-store Coop Bank outlets within its chain of supermarkets. Rival Tesco might, just might, sort out teething problems it has experienced in respect of the debut of its first current account product. According to M&S chief executive Colin Kersley, the retailer will provide customers with a credible, alternative choice in the banking sector. It is debatable if there really exists such a lack of choice.

And 50 High Street outlets: that will hardly strike fear into the heart of Santander, RBS/NatWest, Barclays or Lloyds. M&S Bank says that it will put the customer at the heart of its proposition and deliver an exceptional level of service: well it would say that, wouldn’t it? Do not forget that Virgin Money is bashing on with plans to open Virgin Money lounges. Virgin’s track record – at least for its airline, if not its overcrowded and expensive West Coast Main Line rail franchise  - suggests its customer service proposition will be a selling point.

So the M&S Bank story is interesting but will barely cause a ripple in terms of affecting market shares for current accounts. As for 50 extra branch outlets: my bet would be that this will just about cover the High Street branches that HSBC will shutter within the next two years. One positive is that M&S Bank will create up to 500 new jobs. Or put another way: it will mop up a fraction of the jobs that will be lost over the same period as HSBC continues to shrink its workforce.

Douglas Blakey is the editor of Retail Banker International

M&S, Photograph, Getty Images.

Douglas Blakey is the editor of Retail Banker International

Photo: Getty
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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.