Dormant Assets (Distribution of Money) (England) Order 2023

Lord Bassam of Brighton Excerpts

Tuesday 24th October 2023 Grand Committee

[Lord Addington (LD)]

My Lords, when I looked at this, I thought I had one or two clever questions, but they have both been asked. It is one of those SIs which is basically a good idea but there are a series of “Yes, but what if it happens?” questions. The final point made by the noble Lord, Lord Young, that if you insure against this then maybe you could get the money out there and would be covered anyway might be an answer. I certainly had not thought of it, but it deals with the problem of getting the money, which is designed for a good cause and which you are holding, out there and letting it do the work.

I appreciate that we should hear about how everyone who is paid from this is using the money, benefiting from it and reporting back. Can the Minister say something about that? I declare a small interest as a trustee of the Atlas Foundation, which does this on a very small scale from privately arranged funds. Reporting back is very important to what we do because we have to know what has happened, usually in youth projects based around rugby football abroad. We have reports back so that we can see what is going on. The Government should let us know how this is happening.

The noble Lord, Lord Davies, made a point about additionality and the National Lottery. I wonder how many times that has been breached and whether it has now become the National Lottery’s normal activity to cover certain activities. It has been a great success and done positive things, but has it let the Government off the hook? I do not know. If we want a pointless activity, let us go through that and put the balancing scales up. My attitude is that we do not need to, as long as it gets done and we do not try to overload it.

How it is administered seems to be the major cause of concern. I do not know whether we are holding too much money back—whether for 15 or 20 years—and then giving the whole thing away. Are the Government or the Opposition thinking about whether they will challenge this in future? What is the Government’s long-term thinking on this? Helping good causes, most of which do well, and making sure you find out which ones do not is basically a win-win. It has been a successful scheme, so what are the Government doing to make sure that this momentum is maintained and that we continue to have good results? That is the only thing that could cause any controversy. It is a question of how they are monitoring it and making sure that it is doing this properly. There is also the principle of additionality. Is it doing something that other bits of legislation say are government activity, either local or national? With those caveats, which sound rather miserable as I look back at them, this should probably be supported.

[Lord Bassam of Brighton (Lab)]

My Lords, like everybody else, I am grateful to the Minister for the way in which he introduced this. It is a short SI. That has not stopped noble Lords this afternoon asking a plenitude of questions, but all of them are highly relevant. Many of them are repeats from when we discussed the Bill back in 2021-22, but they are nevertheless highly relevant today.

This is of huge importance to community organisations and individuals who will benefit from the funding. I thought that the testimony of the noble Baroness, Lady Ritchie, was very good on that point because she gave very good examples of the benefits of using the funds in the way in which they are used. I am sure that the Minister will fondly remember his many hours taking the Bill through the House; I have a feeling that it was his first Committee, and he did it very well and with tact and skill.

During the passage of the Bill, we had a lot of discussion about the potential inclusion of community wealth funds as beneficiaries of the dormant asset moneys. In the best tradition of the Lords, there was cross-party support, including in particular from the noble Lord, Lord Hodgson of Astley Abbotts, the now-retired Bishop of Newcastle, and, speaking on her behalf, the right reverend Prelate the Bishop of Ely. That collaboration gave rise, as I recall, to an amendment that many of us signed, which led to a shift in the position of the Government. It was initially resisted by the Minister, who stressed that

“current evidence for community wealth funds, as well as concrete designs for how they would operate, are relatively sparse”.

He did, however, go on to say that

“there is more work to be done in this area before a commitment can firmly be made”. [Official Report, 16/11/21; col. 177.]

In a refreshing break from tradition, the Government have followed through with their promise. I congratulate them on that, because it is a very important and significant one.

Based on the outcomes of their consultation, which saw 71% of respondents agree or strongly agree that community wealth funds should be included as a cause for dormant assets, they have rightly included them on the list in this instrument. This is, without doubt, a very exciting time for those involved in the creation and scaling up of community wealth funds. However, the Minister will know that some in the sector are concerned by the direction indicated in the recent technical consultation document published jointly by DCMS and DLUHC. We understand the need to build the evidence base for community wealth funds. Limiting their work to smaller towns of fewer than 20,000 people appears counterintuitive to us—I will not say counterproductive. Some of the most deprived areas across our country have populations larger than 20,000, yet for a variety of reasons they lack the type of social infrastructure that these funds could provide. The noble Lord, Lord Hodgson, gave a very good case example of where that sort of community capacity can be missing.

Yes, we need to build the evidence base for community wealth funds over time, but I hope the department will consider whether this rather arbitrary threshold is wise. If the pilots are run in the wrong areas or to the wrong criteria, we may never see an accurate picture of the role these funds can play in improving communities and people’s lives and livelihoods. Will the department reflect further on this? This design principle is not even subject to consultation, and I think that needs to be given some urgent thought. At the least, we would like to see the Minister prepared to welcome views on the point and the issue.

While we are glad that community wealth funds have been named as a cause, we are equally pleased to see the existing three causes keep their place in the list. Dormant assets have funded a variety of important services for young people and those with debt or financial inclusion issues, which the Minister referenced. It is vital that their work is able to continue, particularly at a time where our economy continues to struggle and inflation remains a problem for people up and down the country. The Minister will be familiar with the work of organisations such as Big Society Capital, Local Trust and so on, that fall under the third category on the list. As I am sure the Minister is well aware, Big Society Capital has come up with a community enterprise growth plan, which aims to put dormant asset funds to even better use by leveraging additional private capital and multiply the impact that the initial investment generates. While I understand that the Minister will not be able to announce individual allocations today, will he commit to looking closely at least at that plan?

Some questions will remain over elements of the Government’s approach, but we are generally pleased to support this SI. As I have already noted, there is cross-party support for the scheme, and we should harness that energy. At the same time, there are legitimate concerns over particular aspects of the policy. Ministers like to talk about levelling up but, despite the fantastic work of social enterprises across the country, it is not clear that we are yet seeing it on the ground. With that in mind, I hope the Minster can commit to further discussions in the months to come.

For me, the dormant assets scheme is an original great Labour success story. It started in 2008 and was authored by Gordon Brown. The current Government have taken it a stage further and broadened the range of options for paying into that fund. It has put millions of pounds to good use around the country. We are happy to support the expansion of the asset categories through the 2022 Act. Once the finer details have been ironed out, we hope that even more will soon go to good causes.

A number of questions that colleagues asked were particularly important, such as on additionality. Ensuring the restoration of money to the right place is important. The size of the reserve fund seems questionable. We must ensure that we get the right distribution of funds and that they deliver additionality, rather than just paying for things that would otherwise be paid for by government programmes through local government.

This has been an impressive and useful debate. I hope this is an issue that we can keep at the forefront of the House’s consideration. Perhaps we could return to the point about monitoring and analysing the impact at some stage in some form or other. It might be the sort of thing that could be the subject of a Lords’ report, because this is an exciting opportunity. It is all about building capacity, providing opportunities and getting funds to communities that most require them.

[Lord Parkinson of Whitley Bay (Con)]

I certainly agree with the noble Lord, Lord Bassam of Brighton, that this has been an important and useful debate. I am very grateful to all noble Lords who have contributed to it. I am grateful to the noble Baroness, Lady Ritchie of Downpatrick, and her fellow members of the Joint Committee on Statutory Instruments for the work they have done in this regard. I reassure her that we do indeed want this scheme to continue long into the future. The expansion of the dormant assets scheme is expected to unlock a further £738 million for England alongside the almost £1 billion which has already been unlocked, as I mentioned in my opening contribution. We are committed to ensuring the success of this expansion so that ample funding can be distributed across the four causes. That is what the primary legislation—the 2022 Act—and the secondary legislation intend to promote and protect.

I can also reassure the noble Lords, Lord Davies of Brixton and Lord Addington, and other noble Lords who underlined the importance of the additionality principle that it will be adhered to. Ensuring additionality is an essential criterion of the dormant assets scheme. The Government are committed to ensuring that a community wealth fund is designed and delivered in a way which does not replace or undercut central or local government funding. We specifically sought views on how to embed the principle of additionality in the design of a community wealth fund in the technical consultation, which closed on 19 October and which we are working our way through at the moment. That will include ensuring that any interventions provided to communities to support their decision-making will exclude statutory duties. We will work with the National Lottery Community Fund as the main distributor. Lottery funds are also subject to the additionality principle, so the National Lottery Community Fund already has its own policies and practices in place to maintain that important principle.

The noble Lord, Lord Davies, asked about the pensions dashboard. Ensuring that efforts are made to reunite dormant assets funding with its rightful owner remains the first priority of the scheme. A number of ongoing initiatives are aimed at preventing pension assets reaching dormancy, including pensions dashboards, which will enable people to access their information online, securely and all in one place.