Government raids dormant bank accounts for £330m to aid vulnerable

Up to £330 million will be recovered from dormant bank and building society accounts to help fund good causes, Minister for Sport and Civil Society Tracey Crouch announced today.

The money, which will be sourced using the Dormant Bank and Building Society Accounts Act to access open accounts untouched for 15 years, will be distributed over the next four years by Big Lottery Fund [BLF] and Big Society Capital [BSC].

And while it potentially frees up plenty of funds to invest in a range of courses, the government is legally required to return any money if the legal account holder asks for it to be returned.

NEW BLOG: 'More Dormant Accounts funds available for social investment' – Our CEO @cliffprior discusses @DCMS commitment of £135 million for social investment. Read more here: https://t.co/4Kj8ciTs2T #SocInv #SocImp #DCMS pic.twitter.com/U4WZYwjkxu

— Big Society Capital (@BigSocietyCap) January 4, 2018

From the full total, around £280m will be allocated to initiatives across England to help disadvantaged young people into work as well as tackling problem debt and providing housing for families and vulnerable people.

Up to £135m of this will be used by BSC, alongside private co-investment, to fund stable and long-term accommodation for vulnerable groups, including homeless people and those with mental health issues, while also giving local charities and social enterprises a boost.

A further £90m will be used to target projects that help disadvantaged young people develop initiatives to aid employment, alongside Department for Digital, Culture, Media and Sport, the Department for Education and BLF.

The remaining £55m will be awarded to financial inclusion initiatives to improve access to financial products and services for those on lower incomes.

The BLF will also make £50m available to causes in Scotland, Wales and Northern Ireland with specific uses to be determined by each devolved administration.

Sport and Civil Society minister Crouch said: “By unlocking millions of pounds from dormant accounts for a range of good causes, we can make a real difference to lives and communities across the country.

“This is part of the Government’s commitment to building a fairer society and tackling the social injustices that hold people back from achieving their full potential.

NEWS: Government is unlocking £330 million from dormant accounts to build a fairer society across the UK through #FreedupFunds for good causes https://t.co/vxDullynZd pic.twitter.com/RKnf1Yi42n

— Department for Culture, Media and Sport (@DCMS) January 4, 2018

“I am grateful to the banks and building societies, as well as Reclaim Fund Ltd, for their work to free up these funds for good causes. Working in close partnership with the financial sector and civil society, we are determined to help create a country that works for everyone and build a Britain fit for the future.”

Following the introduction of the Dormant Bank and Building Society Accounts Act in 2008, Reclaim Fund Ltd was established by the Co-operative Banking Group Limited identify dormant accounts to become part of the scheme.

Since then, it is estimated that £1 billion of dormant accounts cash has been identified since the Act was formed with £360m making its way to good causes – a figure the government is pledging to increase to more than £500m by 2020.

Reacting to the £135m investment into long-term accommodation for vulnerable people as well as local charities and social enterprises, Big Issue Invest CSV project manager Archie Chappel said: “Continued access to capital for social businesses enables further impact to be delivered. Government provision of capital helps leverage financing and support from the private sector and allows new products to be created that service more types of social businesses.”