Expanding the dormant assets scheme to include financial instruments such as shares and bonds could unlock up to £2bn of additional funding for charities, a government-commissioned taskforce has concluded.
More than £1bn of funds has already been found in dormant bank and building society accounts since 2008 through the Dormant Accounts Scheme, with more than £360m directed to good causes.
But a report from the Dormant Assets Commission, which was tasked in 2015 with identifying further sources of unclaimed assets such as shares or dormant holdings in investment funds, says expanding the scheme could significantly increase the funds available for good causes.
"The commission’s view is that the current scheme should be expanded to include a much wider range of financial assets," says the report, published today.
"It estimates that their inclusion could lead to an extra £1-2bn of funding being transferred for the eventual benefit of good causes."
This would include about £715m of dormant assets available in the investments and wealth-management sectors, almost £150m from securities and close to £140m from banks and building societies.
The commission says that expanding the dormant assets scheme to the pensions and insurance sectors could recoup approximately £550m for good causes.
A bank or building society account is defined as dormant under the Dormant Bank and Building Society Accounts Act 2008 if no transactions have been made for at least 15 years.
The Dormant Assets Commission’s report says that among the financial products suitable for inclusion in the scheme are additional bank accounts, unclaimed proceeds from life insurance and pensions products, shares, bonds and dormant holdings in investment funds.
But the report says that "given the timeframe within which the commission was asked to report, and the resources at its disposal, it was not feasible to consider non-financial products in detail".
The report says the way the existing scheme is managed ought to be revised to cope with the wider range of assets to be included, something it says will require new legislation.
The Reclaim Fund, which administers the dormant assets scheme, should also be reconstituted, instead of being owned by an entity within the Co-operative Group, the report recommends.
Rob Wilson, the Minister for Civil Society, said: "This money could help change millions of lives across the country by helping good causes rather than gathering dust in dormant accounts.
"The reason I set up the commission was to unearth new resources that would allow our charities and voluntary groups to become more sustainable and independent, but crucially also to deliver really important local services over the long term.
"This is an example of an active government stepping in where it can make things better to the benefit of local communities and all concerned."
Nick O’Donohoe, chair of the commission, said: "With the support of the financial services sector, we believe it is possible to reunite many of these assets with their owners and, where this is not possible, to free up substantial incremental funds for good causes in the UK."
But Ronnie Cowan, the SNP MP for Inverclyde, criticised the commission for not including dormant betting accounts in its report recommendations.
He said: "I’ve said for a long time that taking the funds from these dormant betting accounts could provide much-needed assistance to those individuals and families affected by gambling.
"I believe this is a missed opportunity and will continue to argue for more action to be taken by the gambling industry to offset gambling-related harm."
If you’re interested in fundraising, you can’t miss Third Sector’s Annual Fundraising Conference on 23 and 24 May. Click here for more information and to book at the Early Bird rate.