We’ve responded to the Government’s consultation on how to use the anticipated £738 million that will be recouped from dormant financial assets over coming years, to support social and environmental causes in England.
We want to see these funds used for a Community Wealth Fund to benefit local areas and we’re urging you to do the same. Either way, please make your voice heard while there is still time!
The deadline is 23:45, Sunday 9 October. Have your say here – it only takes a few minutes.
If you need some help forming your response, or need something to reference, we’ve created a copy of our response for you to use as you please, you can view it here.
What are Dormant Assets?
Dormant assets are financial assets like money in bank accounts, stocks and shares in companies, pension funds, or even insurance policies, whose owners (or heirs) have not claimed them or are unknown. UK legislation passed in 2008 set up a scheme whereby the financial services industry could channel funds trapped in dormant bank accounts to support social causes, distributed by the National Lottery Community Fund. In the years since, this has provided nearly a billion pounds to charities, social enterprises and community groups, whilst safeguarding the rights of the original owners in case they eventually turn up.
After years of policy development, new legislation passed this year expands the scheme beyond bank accounts, to include other types of financial assets. Potentially this could unlock a further £880m of funding. All beneficiaries of dormant assets funding need to be social or environmental causes.
Why is this consultation important?
The original legislation which created the scheme specified youth, financial inclusion and social investment as the areas to receive support. After passing the new Act, the government is reviewing these areas and considering whether to add to or change them. Following much campaigning during the passage of the Act last year, the government agreed to consult on the way assets are distributed prior to making decisions. This consultation closes on 9 October 2022.
Over 600 organisations, including DSC, are part of the Community Wealth Fund Alliance, which wants to see the new tranche of funding used to support a Community Wealth Fund. This would be ‘an independent endowment, designed and distributed to provide support and funding to reinvigorate social infrastructure in ‘left behind’ neighbourhoods’.
Key to the Community Wealth Fund idea is that funding is long-term (10-15 years), supports neighbourhoods that need the most support, and is community-led. During the passage of the 2022 Act, the Alliance campaigned to include the Community Wealth Fund as an option in this consultation. Note that this consultation applies to England only, as devolved administrations have other schemes set up to use their portions of dormant assets funding.
Especially at a time when communities, charities and the people they serve are facing so many challenges, it’s important to take full advantage of opportunities like this which have been years in the making.