Dormant accounts' funds to be channelled to youth charities
Howard Lake | 6 December 2005 | News
In his pre-budget report yesterday Chancellor Gordon Brown MP announced that several hundred millions of pounds in dormant and forgotten bank accounts will be given youth charities and for financial education.
Initial estimates of around £20 billion available in dormant accounts have been revised down to “several hundred millions of pounds”. The Treasury has been in discussion with the banking industry for two years to establish how to handle the sums in dormant and unused accounts.
An independent Commission on Unclaimed Assets has been set up at the initiative of the Scarman Trust to engage government, banks, consumer groups, charities and the voluntary and community sector to recommend a framework for their productive use for the benefit of disadvantaged communities in the UK.
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The Government and the industry have agreed that the definition of an unclaimed asset should generally cover accounts where there has been no customer activity for a period of 15 years
The banks had reportedly preferred to pass the money to their own corporate charities, but the treasury has decided otherwise, although it is still not clear exactly who will make the distribution.
Also, while there will probably be a major distribution at first, the sums in subsequent years are expected to be tiny.
The National Council for Voluntary Organisations (NCVO) welcomed the Chancellor’s announcement. Stuart Etherington, NCVO’s Chief Executive, said: “NCVO has long been calling for unclaimed assets to be reinvested in to the benefit of communities – it formed one of the proposals for our General Election Manifesto.
“We are pleased with today’s announcement from the Chancellor, which stated that this money should be targeted in particular at deprived communities. We shall continue our work with the Advisory Council for the Commission on Unclaimed Assets, to ensure that this initiative benefits many of the most marginalised individuals and communities across the UK.”
Charities Aid Foundation also welcomed the announcement. Stephen Ainger, CAF’s Chief Executive, said: “Having an independent commission helping to identify such funds and encouraging banks to put them into the charity arena, is obviously a useful step.
“But CAF also believes that it should be possible for the banks, having identified dormant funds, to be able to direct them to charitable causes through their own charity activities throughout the country. The Commission should not be an exclusive way to donate to charities and we would welcome further debate on this issue.”
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.