Creation of social investment bank in doubt after plans to give unclaimed assets to lottery distributor

A new Government consultation has suggested that the money from dormant bank accounts should be channelled to the Big Lottery Fund to improve youth services across the UK.

The Treasury report acknowledged the need for social investment finance for the third sector, but was opaque on whether there would be sufficient funds left over to form a Social Investment Bank, as championed by the Commission on Unclaimed Assets.

It has stated that the Government would like to see a proportion of the dormant money used to support investment in the sector “if resources permit”, and that such an investment function could be fulfilled by a new organisation “or by expanding the functions of an existing institution in the market”.

The Commission’s own consultation, published in March, stated that the bank would need a minimum starting investment of £250m in order to work effectively.

However, the Treasury is clear that the Big Lottery Fund will be “primarily responsible” for the distribution of assets across the four countries of the UK. The dormant money would not be used to supplement existing lottery activities, but would be ring-fenced as a “distinct funding stream”, the report adds.

Commenting on the proposals, Treasury Minister Ed Balls said: “The Big Lottery Fund has the expertise, know-how and experience to distribute unclaimed assets funds across the UK and we hope the devolved administrations will decide to share our funding priorities of youth services, financial capability and inclusion, and social investment.”

Meanwhile, Ed Miliband, minister for the third sector, said that he “welcomed” the work done by the Commission on Unclaimed Assets. “Social investment can help improve communities by enabling third sector organisations to be more enterprising and sustainable,” he said. “We welcome contributions, particularly from the third sector, about the best way to deliver such investment.”

Third sector organisations have until 9 August to submit responses to the Treasury.

Spending proposals

If £100m were available for use in England, the report suggested that:

  • 30 per cent could go to new youth centres
  • 30 per cent to smaller “flexible amenities” such as skate parks
  • 40 per cent to the refurbishment of existing youth facilities.

 

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