The government has launched a consultation to gather views on the broad social or environmental purposes of the English portion of dormant assets funding. Dr Clare Mills invites CFG members to find out more and share their views.
The Dormant Asset Scheme was established by the Dormant Bank and Building Society Accounts Act 2008. Led by industry and backed by the government, it enables responsible businesses to voluntarily channel funds from dormant assets to good causes, while ensuring owners’ rights are protected. Since 2011 around £892m has been distributed.
Under the Dormant Assets Act 2022, the scheme is being expanded to include the insurance, pensions, investment and wealth management, and securities sectors. The expansion potentially unlocks around £880 million for good causes across the UK, £738 million of which will be made available for England over time.
CFG members in England will be interested in how these additional funds might be made available to be used for the public benefit and may wish to contribute to the consultation.
CFG is part of the Community Wealth Fund Alliance, which has long campaigned for dormant assets to be used to create a community wealth fund (CWF). Now the 12-week long consultation will explicitly consider a CWF as an option. The inclusion of a proposal for a CWF follows a government amendment to the recent Dormant Assets Act, responding to pressure from a cross-party group of MPs.
A CWF is designed to provide support and funding to reinvigorate social infrastructure in ‘left behind’ neighbourhoods. It would do this by providing long-term, patient investment over 10-15 years directly to those neighbourhoods, with local people taking the lead in making decisions about how to use the funds to improve their communities.
Alongside the option for a CWF, the consultation also asks for views on social investment. CFG is backing the Community Enterprise Growth Plan (CEGP): a proposal to create jobs, boost growth and support levelling up by unlocking new investment for community enterprises, particularly those in ‘left behind’ places.
Like the CWF, the CEGP would also use new dormant assets funding to invest in community enterprise – the community-based businesses, social enterprises and trading charities taking entrepreneurial approaches to tackling social problems.
Research shows that an investment of £500m over ten years would unlock at least the same amount of private capital, doubling the amount available to communities, and multiplying its impact – as the use of loans to enterprises allows it to be recycled and go even further.
When the Dormant Assets Scheme began, restrictions were set that mean funding can only go to three broad causes in England:
- the provision of services, facilities, or opportunities to meet the needs of young people ('youth')
- the development of individuals’ ability to manage their finances or the improvement of access to personal financial services ('financial inclusion')
- funding for social investment wholesalers to support civil society organisations ('social investment')
The government consultation is about understanding what broad causes should be included in the next phase of the fund.
There are essential and desirable criteria for suggestions – but now it’s over to you. If this is of interest to you, you can read more about the consultation and how to contribute.
Responses need to be submitted by 11.45pm on Sunday 9 October 2022.
Here at CFG, we’re looking at the criteria and thinking carefully. We’ll be backing the plans for the community wealth fund and community enterprise growth programme, mentioned above. We’re thinking about what else we can contribute to the consultation, using our specialist knowledge and sector insight, and we’ll share our submission once it is completed.