The Co-operative Bank is to stop banking services for more than 100 local authorities.
A letter wrote to councils by the bank explained that the decision was made in a bid to focus on retail and small-to-medium sized enterprises (SMEs).
Under 130 local authorities are tied in with the Co-Operative Bank, which represents 35% of local authorities banking in England and Wales, however this now means that once banking contracts expire the bank will not seek to renew them.
Consumer banking campaign group Move your Money said the move was ‘short-sighted’.
Chief executive Laura Willoughby said: “Local authorities need to be able to choose from a competitive market and find banks that share their values and aspirations.
“Instead, this announcement leaves their choices virtually non-existent. It gives the big five banks a clean run at public money.”
