Ambitious plans to invest £1m into a regional bank were voted into place at Preston’s Budget meeting.
But that was not before it came under fire with one Conservative councillor accusing the Labour group of funding a “vanity project” in setting cash aside for the Preston Model and the co-operative bank.
Coun Ron Woollam said launching the bank was an “inward-thinking social experiment that was doomed to failure”.
He added: “Investors do not want to think of Preston as a closed shop.
“We want to attract businesses from all over the world. Does the Labour group realise that we are part of a global economy?
“You are in cloud cuckoo land if you think a local bank is going to support a local economy.”
During the debate which ensued Labour coun David Borrow said: “Part of the investments from pension funds is by lending to smaller businesses.
“There’s a need for finances for smaller businesses.
“Credit unions in South Yorkshire are giving smaller loans to businesses which are struggling so there is a proven need.
“It is banking for people on low incomes which the current banking model fails to meet and that is the challenge for Government.”
The Liberal Democrat group “cautiously” supported the investment into the co operative bank.
Coun John Potter said: “We support the idea of the community bank but very cautiously and I feel the Conservative group has jumped the gun.
“However there’s no indication about how the £1m investment would come back to the city.”
Labour coun Martyn Rawlinson said: “This isn’t an investment to get a financial return for us. That’s not what it’s there for.
“It’s to create a facility for these small or medium-sized enterprises that the high street bank will not help.”