In December 2014, the Bank of England made a decision to introduce Polymer Banknotes into circulation, starting with the £5 notes in 2016 and the £10 note in 2017.
On behalf of Cash Management Solutions, I have voiced my concerns in an open letter to the Bank of England:
Dear [Name supplied if requested],
I am writing to put some questions to you about the process the Bank of England has followed regarding the introduction of Polymer notes and to tell you that I would like to see an independent review of this decision.
I had understood that the Bank would engage all stakeholders in the process and that a key element of the decision making process was to be an analysis of the costs of the change-over to the private sector. I was, therefore, very surprised to see that a decision
was announced within days of the Christmas holiday with no reference to the cost benefit analysis having been completed. Indeed, no mention was made of any of the concerns I raised during the consultation process. Given the position we are now in, I have asked
that the matter be raised with HM Treasury as I believe that an independent review of the decision is necessary.
My concerns are as follows;
- As the Bank of England stands to gain financially from the changeover, the consultation process should have been conducted independently with a remit to undertake a cost benefit analysis for the whole economy.
- Given that we are still not aware of the costs of introduction, I am concerned that the consultation may not have been thorough & transparent.
- As it is, the decision may involve a significant transfer of costs from the public sector to the private sector.
- That this decision may be consistent with a number of decisions by the Bank of England, over a long period of time, that have increased barriers to entry in the cash processing industry, resulting in higher long term costs for consumers and businesses.
- That a number of businesses, especially smaller ones, associated with cash provision, may suffer disproportionately from this decision.
- Conversely, a number of businesses, especially larger ones, may gain financial & commercial benefits from this decision at the expense of smaller rivals.
It would be good to understand the Bank's position on the above points, as I would like to know whether or not they have been considered and the importance given to each in the process.
CEO, Cash Management Solutions
I have also published the message on our website at www.cashmanagement.co.uk/news-and-events/open-letter-to-bank-of-england/. If anyone reading this would like to speak to me about these issues, please feel free to get in contact.