The House of Lords has backed the creation of community wealth funds that would make grants to support local social infrastructure in deprived areas.
Peers yesterday voted in favour of an amendment to the Dormant Assets Bill, which is making its way through parliament.
Charity sector bodies have long called for funding from dormant assets to be invested in community wealth funds in order to help deprived communities.
The amendment would allow for community wealth funds to be set up 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”.
It was introduced by the Labour peer Lord Bassam of Brighton, who also works as director of place at the Prince of Wales’ responsible business charity Business in the Community.
He told peers yesterday that the amendment would give the government the power to establish a long-term pilot scheme, “enabling small-scale investments to be made in local communities that have been left behind in recent years and for data relating to the social impact of those investments to be gathered and analysed”.
He said: “My argument is simply that the proposal could act as a powerful tool in boosting deprived areas, putting small sums of money in communities’ hands so that they can invest in the facilities or services that would have the most local benefit – perhaps subsidising a community hall, running adult learning classes, supporting skills and training hubs and sports facilities, and improving digital connectivity.
“I am sure we could all come up with a long list of things that could directly benefit communities that have been left behind and require levelling up.”
The amendment says that the relevant secretary of state could make an order for the creation of such a fund “for a temporary period of at least 10 years” and “at the end of that period review the efficacy of the community wealth funds with a view to creating community wealth funds on a permanent basis”.
The amendment defines social infrastructure as charities or “buildings or other assets owned or managed by organisations located in communities for the purposes of local residents meeting, socialising, accessing educational resources, or conducting other activities to improve their wellbeing”.
The amendment will need to survive passage through the House of Commons to become law, but its prospects are uncertain given that almost all Conservative peers voted against it.
Lord Hodgson of Astley Abbotts was one of just two Tories to support the amendment.
He told peers during the debate yesterday: “I will repeat, in four sentences, four reasons why I am attracted to community wealth funds.
“They are very local and can reflect the often highly idiosyncratic needs of a particular local community. They can provide a physical space – a building – as a focus for presenting and answering those particular needs.
“Thirdly, they can provide an element of professional help, without which a purely voluntary organisation can struggle.
“Fourthly – this is most important – they can provide the long-term capital needed to answer and build answers to the very deep-seated challenges that many of these communities face.”