Future of UK social investment funding under pressure as Dormant Assets consultation opens
Around £738m is up for grabs in England as government reviews Dormant Assets Scheme's current priorities of social investment, financial inclusion and youth.
A public consultation opened on Saturday about how £738m of dormant assets should be spent in England, potentially putting at risk the future flow of millions of pounds for social investment alongside financial inclusion and youth.
The Dormant Assets Scheme reunites people with lost financial assets, and, if the money remains unclaimed, uses it to back social and environmental initiatives across the UK.
The Consultation on the English Portion of Dormant Assets Funding, launched by the UK government’s Department for Digital, Culture, Media and Sport, comes as the Dormant Assets Scheme has been expanded to include not only bank accounts but also insurance, pensions and investments. This, the government estimates, will unlock around £880m new funding for good causes across the UK. England receives just under 84% of this, which will be around £738m in the coming years, says the government.
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In the foreword to the consultation, the secretary of state for digital, culture, media and sport, Nadine Dorries, and civil society minister Nigel Huddleston, said: “In the unprecedented context of the country’s recovery from Covid-19 and its wide-ranging implications for social and environmental priorities, now is the right time to look at how the scheme can deliver the greatest impact.”
In the unprecedented context of the country’s recovery from Covid-19 and its wide-ranging implications for social and environmental priorities, now is the right time to look at how the scheme can deliver the greatest impact
To date, the Dormant Assets Scheme has given £892m to social and environmental causes across the UK. When the scheme was set up more than a decade ago, the funding in England was restricted to being used for three broad causes: youth, financial inclusion and social investment. Scotland, Wales and Northern Ireland are not required to publicly consult on the purposes of their portions of the funding.
In England, £110m has been given to schemes supporting employment for disadvantaged young people, £100m has increased access to fair financial products and services for vulnerable people, and £485m has gone to social investment, including establishing Big Society Capital, the UK’s social investment wholesaler.
The government's announcement said: “As the national recovery from the Covid-19 pandemic continues, as well as cost of living pressures, the government believes that now is the right time to review whether these remain the right causes for where funding from dormant assets can be allocated.”
Calls for ‘long-term, systemic investment in community enterprise’
A coalition of nine social economy organisations, including Social Enterprise UK and Big Society Capital, launched a campaign last month to urge the government to back the Community Enterprise Growth Plan, which they described as a “once-in-a-decade opportunity” to accelerate the growth of social enterprise in deprived communities.
As the consultation launched this weekend, Seb Elsworth, CEO of Access – the Foundation for Social Investment, which is also one of the coalition partners, said: “Tackling the cost of living crisis and delivering real change in places affected by economic decline requires urgent action. We must make the case that it is charities and social enterprises – with their extensive reach into underserved places – that can deliver tangible change by creating jobs and growth.”
He added: “This type of long-term, systemic investment could shape the future funding ecology of the sector for decades to come.”
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Fair4All Finance, a not-for-profit organisation that supports the financial wellbeing of vulnerable people which has been funded by dormant assets money, said on Saturday that dormant assets funding must continue to prioritise financial inclusion.
“Financial exclusion is an economic, health and social emergency,” said CEO Sacha Romanovitch. “With the first tranche of dormant assets funding and through collaboration with others, we have started to make significant impact to improve people’s lives – this work must continue.”
Community wealth funds under consideration
The consultation includes a chapter seeking views on whether 'community wealth funds' should be supported by dormant assets. This proposal would see pots of money distributed over long periods of time in local communities in England with decisions made by residents about where the funding is directed.
As the Department for Digital, Culture, Media and Sport announced the consultation on Twitter, dozens of people called for money to be used to compensate people who lost money when gambling website Football Index collapsed in 2021. The BBC highlighted that gamblers could lose more than £90m. However, in February this year, the government said it would not use public money for this.
The government called for local communities, current and potential participants, civil society organisations and other interested individuals to participate in the consultation. The consultation closes on Sunday 9 October 2022.
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