Government blocks attempt to allow dormant assets to be used for community wealth funds

The government has removed an amendment to the Dormant Assets Bill that would have allowed money raised to be used to create community wealth funds. 

The Dormant Assets Bill is designed to expand the dormant assets scheme to include the insurance, pension, investment, wealth management and securities sectors. 

The legislation was amended in the House of Lords to include the funds to be established in order to “make grants and other payments to support the provision of social infrastructure to further the wellbeing of communities suffering from high levels of deprivation and low levels of social infrastructure”. 

Charity sector bodies have long called for funding from dormant assets to be invested in community wealth funds in order to help deprived communities.

But the bill, which has since been passed to the House of Commons, was altered at committee stage this week to remove the amendment. 

Nigel Huddleston, the charities minister, instead agreed to run a consultation once the bill has royal assent on making community wealth funds a possible use for dormant assets in England. 

The removal of the amendment on community wealth funds was opposed by the six Labour MPs on the committee, but they were outvoted by the 10 Conservative MPs present. 

Jeff Smith, the Labour MP for Manchester Withington, said his party was disappointed by the removal of the amendment, which had cross-party support in the House of Lords and had generally been welcomed by the voluntary sector.

“I am surprised that the government wants to remove a measure that empowers communities and surely goes to the heart of the alleged levelling-up agenda,” he said. 

“The most deprived areas often have the weakest third-sector capacity and infrastructure, which adds to a cycle of disadvantage. Community wealth funds aim to halt that cycle. 

“We see the amendment as part of the levelling-up agenda and a way of empowering communities, as well as an opportunity to trial new and innovative ways of funding.”

But Huddleston said: “I acknowledge the support expressed by many in the house for using the English portion of dormant assets funding to support, through community wealth funds, the left-behind communities, which experience high levels of deprivation and low levels of social infrastructure.”

He went on to say that the government was happy to put on record a commitment to launching a consultation on using the English portion of dormant assets funding for community wealth funds. 

The amendments to the bill will need to be presented to rest of the House of Commons at report stage on a date to be set.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in
RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners