Expanded Dormant Assets Scheme to provide support amid CofL crisis

The government has announced that the expanded Dormant Assets Scheme, which will include assets from the insurance and pensions, investment and wealth management, and securities sectors for the first time, will look to support organisations tackling social problems.

This follows the passage of the Dormant Assets Act 2022 earlier this year, which expanded the Dormant Assets Scheme into a wider range of sectors, with estimates suggesting that this will unlock around £880m for good causes across the UK.

This includes £738m that will be made available for England over time, with the government confirming that it intends to name youth, financial inclusion and education, social investment wholesalers, and community wealth funds as the purposes of the English portion.

The government response also outlined the next steps to achieve this, including launching a technical consultation on the design of a community wealth fund and naming the four causes in secondary legislation.

In addition to this, the government has announced £31m of immediate funding from dormant assets to help social enterprises and charities with the rising cost of energy and increased demands as a result of the wider cost of living crisis.

The £31 million funding injection, allocated under the current scheme, aims to enable community and social enterprises to install energy saving technology in their buildings and help them meet the growing need for their services as a result of cost-of-living pressures.

Although the existing Dormant Assets Scheme enables banks and building societies to channel funds from dormant bank and building society accounts towards good causes, the scheme is set to be expanded to include assets from the insurance and pensions, investment and wealth management, and securities sectors for the first time.

Commenting on the news, New Leaf Initiative CIC founder and managing director, Marie-Claire O’Brien, stated: “Our crucial work supporting nearly 1,300 people with convictions into work has received social investment twice now with the support of Dormant Assets.

"Most recently social investment has helped us to launch a new ethical recruitment agency which plans to place 100 clients into work in year one, and refurbish our training academy with upgraded equipment, employ an experienced tutor and create a graffiti wall that represents the journey of clients from institutions to employment.

"Not only that, but the friendly ear of social investors and words of encouragement, signposting, and advice - when times have been tough - have been invaluable, and supported our growth, and that of our clients, as a result.”

Foundation of Social Investment chief executive of access, Seb Elsworth, added: “There are thousands of projects that have benefited from Dormant Assets to date - many of which are small, community led organisations.

"Supporting charities and social enterprises through social investment in a myriad of ways - be that helping a community building to make energy saving improvements, launching a new service that will support service users in new ways and generate new income or simply keeping the wolf from the door - providing working capital and helping to maintain vital services in a changing economic environment.

“Further allocations of dormant assets will expand this investment and drive support to communities that have not benefited to date, including places and communities not well served by mainstream finance.

"This could and should include taking approaches that build on tried and tested mechanisms such as enterprise grants, business support and non-profit community lending.

“But we also know that many charities and social enterprises are being asked to do more with less right now – the £31m allocation from the Dormant Assets Scheme will help those struggling with rising energy bills by supporting organisations to be more energy efficient and those looking to meet increased demand for their services as a result of the cost-of-living crisis.”

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