The government has outlined plans to legislate for the expansion of the dormant asset scheme in a move that could unlock an additional £880m for social and environmental initiatives.
The announcement was made during the Queen’s Speech in parliament yesterday, which set out the government’s policies and proposed legislative programme for the new parliamentary session, including a Dormant Assets Bill.
The government also used the speech to announce a new Charities Bill, aimed at reducing bureaucracy for voluntary sector organisations in England and Wales.
Dormant assets are defined as those that are left untouched for 15 years or more and cannot be reunited with their rightful owners. The rightful owners are entitled to come forward at any time to reclaim their assets.
“Legislation will support the voluntary sector by… releasing additional funds for good causes,” the government said in a briefing publishing alongside the speech.
The Department for Digital, Culture, Media and Sport announced in January that the scheme would be expanded to include the insurance and pensions, investment, wealth management and securities sectors, following a consultation last year.
The new bill will also protect dormant-asset owners and participating businesses while putting assets laying idle from a wider range of financial sectors to good use, and build on public commitments to expand the scheme and maintain strong, voluntary engagement with a broad range of industry participants, the government said.
The legislation aims to expand the scheme into new asset classes, improve consumer protection in reuniting people with forgotten money, and enable the social and environmental focus of the English portion of funds to be set through secondary legislation.
It is hoped this will allow the scheme to respond more flexibly to changing social and environmental needs in England, which is in line with the model used in the devolved administrations.
The bill will also see the Reclaim Fund named as the scheme’s authorised reclaim fund.
Acting as the scheme’s administrator, Reclaim will help improve the scheme’s operation by only accepting transfers from participants who have undertaken appropriate efforts to trace, verify and reunite the asset with its rightful owner.
Andrew O’Brien, director of external affairs at Social Enterprise UK, tweeted: “Looks like the government wants more flexibility and less bound to fund just two or three initiatives. My guess is we'll see more but smaller funds.”
He questioned what this would mean for social enterprises.
“I imagine it will mean less going into social investment and more going into traditional 'good causes' - but do we really need a parallel to the National Lottery?” he said.
Nick Temple, chief executive of the Social Investment Business, said: “Dormant assets legislation should learn from the experience to date and complement the existing landscape, while the Subsidy Control Bill and the Procurement Bill should strengthen and embed social value as they seek to be more effective.”
Temple also called for the expected 'levelling-up' white paper in the autumn to include more social infrastructure plans.
He added: “On that basis, for those of us interested in providing finance for a fairer recovery and in creating a more resilient social economy, there is much here to seek to influence for the benefit of those we support.”