Sheffield consumers could be hit 'particularly badly' in row over free cashpoints

Sheffield consumers face the possibility of 'cash deserts' if a row over the funding of free-to-use cashpoints is not resolved, an industry body has warned.

Members of Link, the UK's cash machine network, have been in talks over how to fund free-to-use ATMs, which cost around £1 billion per year to run.

Following a meeting on Thursday, Link said a committee would be set up to "explore a way forward for the sustainability of the Link scheme".

The working group is expected to report back later in the year - and Link said every member was clear at the meeting that ensuring the future of the network and the cash access needs of UK consumers remained their "number one priority".

Fears have been raised that more cash machines could start charging or disappear if current arrangements for sharing the cost of operating the network broke down.

Trade body the ATM Industry Association warned there were risks that "cash deserts" could be created. It had collected information from members which were independent ATM operators on which machines could be at risk.

The Association's findings suggested that while London could lose the most cash points Sheffield, Belfast, Glasgow, Birmingham and Cardiff could also be particularly badly hit.

It warned companies could have to look at removing upwards of 35 per cent of their free-to-use ATMs unless a clear resolution to maintain the Link network was reached.

This could amount to more than 8,000 machines in total which would either no longer be free to use or would be removed completely, it said.

Ron Delnevo, executive director Europe at the association, said the meeting had provided a "stay of execution" but added: "No-one really knows how discussions will now progress."

More than 70,000 cash machines are connected to the Link network, with 16,000 charging for withdrawals and 54,000 free to use.

Pay-to-use machines account for less than 3% of cash withdrawals.

Andrew Tyrie, chairman of the Treasury Committee, said MPs could step in to investigate if the situation was not resolved.

He said: "Link are now examining this, which is welcome.

"Widespread charging would be of considerable concern, particularly in rural areas and poorer urban neighbourhoods.

"Link now have an opportunity to sort it out.

"If they don't, the Treasury Committee will almost certainly need to investigate."

John Howells, chief executive of Link, said: "Link will continue to work closely with its 39 members to keep regulators, government and consumer groups fully informed.

"The Link network continues to operate normally and it's business as usual for consumers at all the UK's 70,000 ATMs."