Government unlocking £330 million from dormant accounts to build a fairer society
Big Lottery Fund and Big Society Capital will distribute cash to initiatives tackling a number of societal challenges
Up to £330m from dormant bank and building society accounts will be used to help the homeless, disadvantaged young people, local charities and other good causes in the UK over the next four years, Tracey Crouch, Minister for Sport and Civil Society, announced today.
Around £280m will be allocated to initiatives across England to help disadvantaged young people into work, provide housing for families and vulnerable people, and tackle problem debt.
Of this, up to £135m will be used by Big Society Capital (BSC) to fund stable and long-term accommodation for vulnerable groups such as homeless people and those suffering with mental health issues, as well as to provide support for local charities and social enterprises. This allocation meets existing funding commitments to Big Society Capital, who will use it to leverage substantial private co-investment, to maximise the impact of these funds.
Around £90m will also be invested in support of projects that help disadvantaged young people into employment. These initiatives will be jointly designed by the Department for Digital, Culture, Media and Sport, the Department for Education and Big Lottery Fund with input from young people.
The remaining £55 million is set to be awarded to financial inclusion and capability initiatives which will tackle issues such as problem debt, as well as improving access to financial products and services for those on lower incomes.
Out of the £330m, up to £50m will be made available for good causes in Scotland, Wales and Northern Ireland and will be distributed by the Big Lottery Fund. Each devolved administration will then decide how these funds are used.
Tracey Crouch, Minister for Sport and Civil Society, said: “By unlocking millions of pounds from dormant accounts for a range of good causes, we can make a real difference to lives and communities across the country.
“This is part of the Government’s commitment to building a fairer society and tackling the social injustices that hold people back from achieving their full potential.
“I am grateful to the banks and building societies, as well as Reclaim Fund, for their work to free up these funds for good causes. Working in close partnership with the financial sector and civil society, we are determined to help create a country that works for everyone and build a Britain fit for the future.”
The funding for social investment in England will also include £10m for Access – the Foundation for Social Investment, BSC’s sister organisation.
In a joint statement, Cliff Prior, Chief Executive of Big Society Capital, and Seb Elsworth, Chief Executive of Access said: “This capital will enable many more charities and social enterprises to improve the lives of people all around the UK, delivering larger and more innovative solutions in the focus areas of homes for people in need, and supporting communities experiencing disadvantage.”
The Government will work closely with the Big Lottery Fund, as well as a range of social sector and private sector partners, to develop these initiatives over the next few months.
While the move has been welcomed, others are questioning if the government is short-changing government – the assets to go to charities falls well short of the total funds available, according to the Shadow Minister for Civil Society.
Steve Reed has called on the government to release the £2bn in dormant assets announced last March.
Last year, the then Civil Society Minister Rob Wilson announced up to £2bn in dormant assets would be made available. The government have yet to look at how that money will reach charities, so today’s announcement relies on an old scheme and covers just 10% of the money sitting in dormant accounts at a time when charity budgets are being squeezed.
Steve Reed also accused the government of offering money that had already been announced. DCMS admits that £135m of the funding for Big Society Capital is simply a reannouncement of ‘existing funding commitments’.
Less than £200m appears to be new money – considerably less than the £2bn identified less than a year ago. Total new funding appears to amount to just £50m a year for four years.
Labour’s Shadow Minister for Civil Society, Steve Reed MP, said: “It’s welcome that cash-starved charities will finally get some funding out of a government that’s spent the past seven years cutting them to the bone. But the money on offer is just a fraction of the £2bn boost promised less than a year ago, and three-fifths of it has been announced before.
“The question on every charity treasurer’s lips today is where’s the rest of the money? While any new funding is welcome, charities will once again feel short-changed by a government that misses no opportunity to undermine and sideline the sector.”