Funds worth £800m in dormant accounts to strengthen communities in England
Ministers will pay more than 800 million
The Department for Culture, Media and Sport said on Tuesday that the Dormant Assets Scheme (DAS) will initially provide $76 million.
Around £45m of the initial funding will be provided by Fair4All Finance, a not-for-profit organisation, as interest-free loans to 69,000 people struggling with soaring living costs and 15 years of high interest rates.
A further £31m will be paid out by social investors Access and Big Society Capital to hundreds of charities with the aim of making social enterprise-owned buildings greener through more efficient energy systems such as solar panels and new boilers.
Since 2011, the government has used the DAS to raise nearly $900 million
Dormant assets are accounts that have not been touched for a long period of time. The DAS tries to reunite people with their lost funds, but it uses unclaimed money to support social and environmental initiatives.
DCMS said that after releasing the initial £76m, a further £738m would be made available from insurance, pensions, investment and wealth management products that were not taken up.
The government will also open up the scheme to community wealth funds – pots of money that will be distributed to deprived areas over a long period of time and give local residents the right to choose how the funds are spent.
Sir Ronald Cohen, co-founder of Big Society Capital, which was founded in 2012, said: “Unclaimed assets are public money; it does not belong to the banks or insurance companies, although it is on their balance sheets.”
Civil Society Minister Stuart Andrew said: “The creation of Community Wealth Funds will give residents in some of the country’s most disadvantaged areas the opportunity to improve their lives and invest in what matters to them.”
Reclaim Fund Ltd, the company set up to manage DAS money, intends to sign pension and insurance groups such as Aviva in the coming months, with investment firms and wealth managers to join later this year.
Businesses voluntarily commit to donating funds from the dormant assets they hold to the Reclaim Fund, which has enough cash to compensate people who rediscover lost accounts after they’ve been closed.
DAS has supported a number of projects to date including the Greater Manchester Homes Partnership which has hosted 355 homeless people with support from Big Society Capital and Homebaked, a cooperative bakery and community land trust in Liverpool.
https://www.ft.com/content/80e93eb8-e1f4-41cc-b940-7eb5961c0b3b Funds worth £800m in dormant accounts to strengthen communities in England