- Funding will help tackle youth unemployment, support communities in deprived areas and give people in need access to finance
- New government bill could unlock an extra £880m for good causes
Communities and good causes across England have received an additional £44million through the Dormant Assets Scheme.
The funding will be used to tackle youth unemployment, expand access to investment for charities and social enterprises, and help improve the availability of fair and affordable loans for people in vulnerable situations.
The Dormant Assets Scheme releases funds from dormant bank and building society accounts, which are accounts that have been open for 15 years, but during that time no transactions have taken place.
The £44 million funding will be distributed by the National Lottery Community Fund, as follows:
- £20m will enable the Youth Futures Foundation to test and demonstrate the best approaches to breaking down barriers and improving access to employment for disadvantaged young people
- £20m will go to Access – The Foundation for Social Investment, to provide urgently needed funding to up to 1,000 charities and social enterprises, particularly in the most deprived areas
- £4m will enable Fair4All Finance to accelerate its work on affordable consolidation loans for people in financial vulnerability
Already more than 800 million pounds were released by the Dormant Assets Scheme during the last decade, 150 million pounds that supported the response to the pandemic Covid-19 in 2020.
Nigel Huddleston, Minister for Sport, Tourism, Civil Society and Youth, said:
This latest £44million allocation from the Dormant Assets Scheme will make a real difference to people’s lives in communities across England. As well as helping young people find jobs, it will also provide financial support to those who need it most.
And we won’t stop there. We are currently pushing through legislation to expand the Dormant Assets Scheme even further, so that it can free up even more money to help improve communities across the country.
This follows the government’s release of its Leveling Up white paper last week, which set out a plan to transform the UK by extending opportunity and prosperity to all parts of the country.
Following a public consultation process, a new bill is currently under consideration in Parliament, which should fulfill the commitment of the Government to extend the Dormant Assets Scheme.
This could potentially unlock an additional £880million across the UK over the next few years by allowing a wider range of dormant assets to be transferred into the scheme from the insurance and pensions sectors , investment and wealth management and securities.
There are 30 participating companies Dormant Assets Scheme, which will continue to have the protection of consumers in its heart, the first priority of participants continuing to bring people together with their assets.
Where this is not possible, more companies will soon be able to voluntarily transfer dormant assets into the scheme, unlocking funding for social and environmental causes across the UK which is on top of central or devolved government funding.
The scheme has already helped people like Chris Coyle, who grew up in a deprived area of Coventry and was introduced to cycling through a city center council initiative, and later set up Ebikebrum, a community bike cafe and shop . With a combined grant and loan of £83,000 from the Key Fund as part of the Growth Fund, a partnership between the National Lottery Community Fund and Big Society Capital provided by Access through a range of social investors, Chris was able to provide services from information on health lifestyle choices to a full program of cycling activities, specializing in electric bikes.
Fair4All Finance has previously used the Dormant Assets Scheme to provide Moneyline with long-term funding, enabling them to provide more affordable credit to people in vulnerable situations. A beneficiary, who asked to remain anonymous, had been divorced from an abusive relationship and was struggling financially before contacting Moneyline, who provided the support she needed.
Another organization that has benefited from the scheme is the West of England charity, 1625 Independent People (1625ip), which receives grants from the Youth Futures Foundation in partnership with the West of England Combined Authority. This funding helps youth leaving care prepare and find good jobs through its Reboot West program. The charity works in partnership with the leaving care and employment and skills teams of four local authorities in Bristol, Bath and North East Somerset, South Gloucestershire and North Somerset. It offers tailor-made coaching, training and career support.
David Knott, chief executive of the National Lottery Community Fund, said:
The money released through the Dormant Assets Scheme will be widely welcomed and comes at a difficult time for communities. We are delighted to distribute this £44million on behalf of DCMS, to support charities and social enterprises working to help people in some of the most deprived areas of England. This vital funding will impact people’s lives and support them towards a more prosperous and thriving future.
Seb Elsworth, Managing Director of Access – the Foundation for Social Investment, said:
Communities need of support charities and social enterprises can provide, creating vital jobs and tackling entrenched social problems. But too often, they may have trouble getting the finance they need to innovate and grow. The 20 million pounds sterling from additional inactive assets will help us and our partners to provide small-scale loans which most charities and social enterprises need and more targeted investments in places and communities that were previously neglected.
Matthew Poole, Director of Grants and Investments at the Youth Futures Foundation said:
When disadvantaged youth told us what they wanted from employment assistance, they talked about system-wide changes. That’s why we’ve launched our £6.1m Connected Futures Fund to reduce the fragmentation of youth employment and skills supply in the places that need it most. Our goal is to unite services at the local level so that young people who are furthest from the labor market benefit from quality, consistent support that understands their complex needs. We will intensify our learning of what works so that more places are able to offer an effective offer. The additional £20m from dormant assets will help us build on this momentum.
Sacha Romanovitch, Managing Director of Fair4All Finance, said:
11million people have racked up some £25billion in debt during the pandemic. Much of this burden falls on low-income people in the poorest parts of the country. Problematic debt, often well over £10,000 across multiple suppliers, quickly becomes unmanageable. It has a significant impact on mental health and general well-being. This limits opportunities and prevents people from participating in communities.
We are delighted that the government is supporting affordable debt consolidation with £4m of dormant asset funding. We would also like to see the broader credit industry play a role in working with us to service and consolidate debt through affordable credit providers where customers have reached their tipping point.
Notes to Editors
The definition of a dormant bank or building society account is contained in the Dormant Bank and Building Society Accounts Act 2008: an account is “dormant” at any time if it has been opened for the period of 15 years ending at that time, but during this period no transactions have been carried out in relation to the account by or on the instructions of the account holder.
To address systemic inequalities and ensure access to opportunity, funding is particularly directed to some of the most left behind regions of the country.
Where dormant asset funding has been distributed to date:
In England, the Scheme released £100 million to tackle financial exclusion and debt problems; £110m to remove barriers to young people working; and £485m of investment in charities and social enterprises across the country. In 2020, £150million from the scheme has been released for organizations in England to support their coronavirus response and recovery efforts.
In Wales, £37.7m of dormant asset funding supported a variety of projects, including investing £16.3m in young people, learning, education and employment; and £4.9 million for climate change action. Sustainable Steps Wales will invest a further £16,950,000 over the next 18 months.
In Scotland, £67.2 million of dormant asset funding has been allocated under the Young Start scheme. Young Start has awarded over 950 grants of up to £100,000 to voluntary and community organizations for projects led by young people, which help them to become more confident and realize their own potential.
In Northern Ireland, Dormant Asset Funding is used to provide flexible multi-year funding to increase the capacity, resilience and sustainability of the voluntary, community and social enterprise sector through a 22.4 million pounds.
Funds under the program are held by Reclaim Fund Ltd (RFL). RFL is authorized and regulated by the Financial Conduct Authority and must hold sufficient money to cover customer claims. It donates the surplus to the National Lottery Community Fund to distribute to social or environmental initiatives across the UK. The DCMS Secretary of State can issue policy guidance on the English portion of the funding.