Social bank ‘must share idle cash’
Regeneration & Renewal
A proposed financial institution that would channel funds from idle bank accounts into the third sector could receive less than half the cash that a Government-backed commission recommended, it was alleged this week.
According to an email written by an individual involved with the Commission on Unclaimed Assets, a copy of which has been seen by Regeneration & Renewal, chancellor Gordon Brown will shortly release a consultation document on how to treat unclaimed assets. It will propose giving the Social Investment Bank a maximum of £150 million to fund organisations such as voluntary groups and social enterprises, the email says.
The figure falls far short of the sum that the commission – set up by the Government to investigate how cash in dormant bank accounts could be unlocked for deprived communities – recommended that the bank should have in its consultation paper last summer (R&R, 14 July 2006, p3).
This document proposed that all of the £400 million estimated to be lying in abandoned bank accounts should be given to the new bank, which would offer financial products such as bonds, loans and development grants to the third sector.
Instead, the leaked email says that more than £200 million would be given to good causes distributor the Big Lottery Fund to be spent on young people.
A further £50 million would be used to boost access to financial products for financially-excluded people, it says.
Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations, said: ‘The people involved believe there is a certain sum of money needed to make (the Social Investment Bank) viable.’
He called for the unclaimed money to go to an independent body, adding that the sector would be ‘up in arms’ if the cash was ‘poured into an unelected quango’, such as the Big Lottery Fund.
A Treasury spokesman said the department had yet to decide how the money will be distributed. He said that the Treasury would publish a consultation document later this month on ‘enabling legislation to get access to dormant bank accounts’.
The Commission on Unclaimed Assets is due to publish its final recommendations at the end of this month.