The government has said it will legislate to divert £800m in unclaimed financial assets to good causes as part of its coronavirus recovery plan. Although there are as yet no time frames included with this news, the potential for additional funding will be good news to many organisations that have struggled over the past year.
The assets are ‘dormant’, meaning customers have not used a financial product in a number of years. The Dormant Assets Scheme, which was launched a decade ago and includes funds from more than 30 banks and building societies, has since distributed over £745m to organisations such as Big Society Capital and the Youth Futures Foundation, including £150m last year to support the sector’s response to coronavirus. As well as dormant funds from banks and building societies, the scheme will now include money from the investment, wealth management, insurance and securities sectors.
While the government consulted on the expansion of the scheme in 2020, this recent announcement does not outline any specific destinations for the extra funding, or give any idea of when the money might be available. This lack of certainty means that those in urgent need are unlikely to see any immediate benefit from the released funds.
Roberta Fusco from the Charity Finance Group told Civil Society News:
“Expansion of dormant assets scheme, though very welcome and long awaited, represents potential and not certainty of extra funds into the sector and will take time to reach communities and civil society organisations in need of support now to continue to respond to Covid-19 crisis.
"Legislation is needed to enact the changes and [it is] important to note that in England, currently expenditure is ring fenced for initiatives focused on youth, financial inclusion or social investment. So, a welcome development, but not an immediate solution to the current financial crisis.”