8.26 Read Accounting Headline 8.6 on p. 381, an article that relates to claimed financial exclusion of some sectors of society. After reading the articles:

• Apply the managerial perspective of Stakeholder Theory to explain whether management would care about the concerns of the charity One Parent Families.
• If we applied an ethical perspective of Stakeholder Theory, should management care?
• If society considered that the banks? policies were unreasonable, would you expect the banks to use their annual reports to defend their position (legitimacy)?

Give lone parents credit, banks told Charity report nds that discrimination by nancial sector forces low-income families into the arms of loan sharks Phillip Inman Tuesday 11 January 2005 10.00 GMT Single parents struggling with debts are ill-served by the banking industry, which punishes them with high interest rates on loans or refuses to oer credit at all, pushing them into the arms of doorstep lenders, the charity One Parent Families said yesterday. Despite large government subsidies through the tax credit system, which have improved the nances of single parents over the past four years, banks and other lenders continue to discriminate against them and force them to pay more for credit. Almost half (48%) of single-parent families had been in arrears in the past year, compared with a quarter of two-parent families. Even those parents who choose to work often fail to rid themselves of short-term, costly debts. The incidence of debt among working lone parents is twice as high as among couples where one person is in work - 14% compared to 7%, according to the report. The charity said a 32-page report, Personal Finance and One-Parent Families: The Facts, revealed the wide-ranging problems faced by lone parents, who were more likely to use overdrafts, credit cards and personal loans than couples with children. The report, which pulls together research from the past two years, also supported critics of the government's attempts to encourage saving among low-income groups, pointing out that two out of every three lone parents could not aord to save even 10 a month because it would exceed their budget. Launching the report, Nicola Simpson, the charity's chief executive, said: "The research shows that large numbers of single parents are being pushed into debt, not because they are bad at budgeting but because the pennies just won't stretch. "On our helpline we get many calls from single mothers and fathers who have been through a family break-up and fear getting trapped in a spiral of debt. It is time they had more help. "The government has made a positive start in tackling debt among lowincome families with its pre-Budget report measures for tackling nancial exclusion. We need the nancial sector and government to work together to deliver accessible advice and appropriate services for the many families who need help." She said banks had to do more to make basic bank accounts easier to open. Like other low-income groups, single parents will often be shy of opening a current account, fearing excessive surcharges for unapproved overdrafts or bounced cheques. Most high-street banks have developed stripped-down current accounts known as basic bank accounts - following demands by the Treasury that they support measures to end nancial exclusion among poorer households. But low-income groups have criticised banks for doing little to promote them. Ms Simpson said the Treasury should consider setting a target for the number of basic accounts to be opened by 2006. She said ministers should consider ways to persuade mainstream banks to lend small sums at low cost, attracting single parents away from doorstep lenders that charge between 50% and 190% interest on loan products. The government should also simplify and broaden its Social Fund to oer low-cost credit and grants for essential items - such as school uniforms, cots, bedding and clothes for children - and should consider extending eligibility for Social Fund loans to those on working tax credit, she said. Topics Social exclusion Borrowing & debt Save for later Article saved Reuse this content