MPs SUPPORT INVESTMENT BANK FOR THIRD SECTOR
Unclaimed assets in banks and building societies should be used to fund a Social Investment Bank to support third sector organisations. The Treasury Select Committee in its report believes that using the assets in this way would give the greatest benefit to society.
Between 400 and 500 million pounds million is currently held in dormant bank and building society accounts in the UK where a financial institution has lost contact with an account holder. A large proportion of this money will never be reclaimed by its rightful owner. The Government, working with the banking industry, has proposed the establishment of an unclaimed assets scheme to put these dormant accounts to productive use whilst continuing to recognise the ongoing rights of customers to reclaim their accounts at any stage.
The Government proposes using the Big Lottery Fund infrastructure to distribute unclaimed assets to deliver effective programmes and activities for young people in England. The Commission on Unclaimed Assets set up in 2005 to develop proposals that would generate the maximum public benefit from the assets recommended that they should fund a new Social Investment Bank to develop the social investment market.
The Commission argued that the UK needed an SIB to strengthen the voluntary sector, and that this would be preferable to using the unclaimed asset funds for a more traditional grant giving programme which could not deal with the problems of poverty. The Bank would aid the third sector which is powerful in terms of the numbers of people working in it, but is very poorly undercapitalised. The proposed bank would stimulate innovation and be far more effective than simply responding to the inexhaustible needs of a myriad of different good causes.
Ed Mayo, a Trustee of the Commission, but also Chief Executive of the National Consumer Council, believes that this is a rare opportunity to respond in an effective and innovative way to the challenges facing the third sector. Unleashing the potential of the third sector could make a difference and a Social Investment Bank could limit the chronic and endemic insecurity of grant funding.
The Select Committee believes that there is no sign that the Government intends to commit the 330 million pounds necessary for supporting the third sector in this way and it calls for unclaimed assets to be used in setting up a Social Investment Bank.