Prime Minister's response on Scottish Lloyds TSB foundation 'woefully inadequate', says SCVO

Gordon Brown's words 'not worth the paper they're written on', claims Lucy McTernan

The Scottish Council for Voluntary Organisations has dismissed as "woefully inadequate" Gordon Brown's response to its petition calling for the Prime Minister to intervene in the dispute between Lloyds Banking Group and its foundation for Scotland.

The group has been in disagreement with the Lloyds TSB Foundation for Scotland over new terms drawn up in the wake of the huge losses incurred by the group as a result of the banking crisis.

It emerged last week that the bank will terminate its agreement with the Scottish foundation after a nine-year notice period and set up a new foundation instead.

The SCVO's petition, set up on the Number 10 website, called on the Government to intervene in the row and ensure the foundation was preserved in its old form. It has been signed by 2,705 people so far.

The Government response, published yesterday, says it understands that the banking group "is still in discussions with the foundation for Scotland and we hope an agreement can be reached quickly.

"The Chancellor has received assurances from Lloyds Banking Group that the four foundations will receive the full value of the existing agreement over the next nine years," it says.

But Lucy McTernan, deputy chief executive of the SCVO, said the assurances the Government had received from the bank were "not worth the paper they are written on".

She said: "The Prime Minister's response to the petition to save the Lloyds TSB Foundation for Scotland is woefully inadequate.

"It fails to acknowledge Lloyds Banking Group's announcement last week terminating their covenant with the foundation, effectively ending funding to charities just when it's needed most. This demonstrates a complete lack of understanding of what's at stake.

"It's astonishing that the Government would accept these assurances without looking any deeper into the dealings of this part-nationalised bank."

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