Last week the government announced – or was it re-announced? – that it was unlocking £330m from dormant accounts, with the Big Lottery Fund and Big Society Capital distributing cash to initiatives tackling many social challenges. It announced that these funds would address a range of issues including the housing of vulnerable people, helping disadvantaged young people into work and dealing with problem debt. It claims that by 2020 the total distribution from dormant accounts to good causes will reach over half a billion pounds. This is not a new policy and indeed the original idea was one championed by Gordon Brown as far back as 2005 when he was chancellor and commissioned Sir Ronnie Cohen to report on how these funds could be used for social purposes.
The Labour government then legislated to facilitate this in 2008. The coalition government sought to use the concept to fund part of its ‘Big Society’ initiative and established Big Society Capital to use some of these assets to finance a programme of social investment. The current announcement is in one sense the next phase in an already established programme of using unclaimed assets for a social purpose. Of course, £330m will not go far to address issues such as homelessness and the other heralded targets, especially after government has cut local authority budgets by as much as forty per cent.
There is a sense of political spin ahead of substance. Last March the Dormant Assets Commission identified some £2bn remaining to be distributed. This windfall must be allocated and used strategically. While current commentary is focused on the £330m, government is silent on how it will address the totality of the opportunity.
These dormant assets could surely be best used to address systematic challenges and building a strong resilient voluntary and community sector, and ideally on a local basis. There are fundamental questions about the use and control over the £2bn, which government should consider urgently and involve charities and others. This money is needed in local places as this is where the identified social problems exist and where they will be resolved. Many in the charity sector would prefer government to create and endow local funds rather than to administer the funds through national bodies. I believe that this approach should be actively considered and that it could bring significant benefits. Any such approach should recognise and acknowledge local governments role in addressing social, environmental and economic issues but I am not advocating handing this money to local authorities. I am suggesting that local funds should be endowed with local voluntary and community responsibility for local strategic control and distribution of these funds. This could be a role for local infrastructure bodies and/or Community Foundations – and this should be a matter for debate. Any such approach should have conditions and rules. These would include exemplar and transparent governance standards, a requirement to be strategic, an obligation to collaborate with local authorities and an expectation that these dormant assets would be used to leverage other local monies and assets. Government is sadly currently not being strategic. It is re-announcing existing policy and taking small steps rather than being ambitious. It has time – but not much – to act differently. So, my response to the government is that any additional money is welcome but look to see how it might be used most effectively and be honest about the totality of funding for issues such as homelessness. Lets find ways of establishing locally endowed community funds under local control to address local needs.