I beg to move,
That this House has considered dormant assets funding and community wealth funds.
It is a pleasure to serve under your chairmanship, Ms Harris. I begin by saying that I am pleased to see the proposal for a community wealth fund explicitly considered in the consultation on the next portion of dormant assets funding. As the Member of Parliament for Stoke-on-Trent Central, I welcome the Dormant Assets Act 2022 and the future unlocking of new investment in good causes. Dormant assets have been a significant source of funding for youth and social investment and it is important to ensure that the next tranche has a similarly transformative effect by backing plans for the community wealth fund.
Historically, underfunded neighbourhoods have seen essential social infrastructure deteriorate, decay and disappear, resulting in depleted levels of the social capital that is so important for underpinning healthy, prosperous and resilient communities. When combined with the absence of places to meet, the lack of an engaged community and poor connectivity, these neighbourhoods experience significantly worse outcomes across a range of indicators, from health and wellbeing to education and employment.
The 225 areas the Local Trust has identified and named as left behind have considerably fewer jobs, with only 52 available locally per 100 people. Many children face poverty and live in out-of-work households and participation in higher education is markedly lower. Despite being at greater risk, these areas have historically missed out on funding. Research by the Local Trust shows that in the past two decades, left-behind communities and neighbourhoods, including those in Stoke-on-Trent Central, have received an average of £7.77 per head in national charitable funding. That is less than half the amount received in other equally deprived areas, and is well below the national average. Understandably, this makes it harder for these communities to take action to improve local outcomes and work with partners to tackle what are often deep-rooted and multigenerational challenges.
We saw these areas fare disproportionately badly during covid. Now, they are again the most vulnerable to the cost of living challenges, as they have fewer resources to draw upon and often lack the ability and skills to apply for funding. The community wealth fund would provide a crucial opportunity to correct this by creating a long-term endowment for deprived communities that have not benefited from economic prosperity, helping to resolve some of the disparities at the heart of the levelling-up agenda.
These communities are typically located in post-industrial areas in the midlands and the north of England, and are particularly prevalent in red wall constituencies like mine. In fact, seven of England’s 225 most left-behind communities can be found in Stoke-on-Trent, two of which—Abbey Hulton and Townsend, and Bentilee and Ubberley—are in my constituency of Stoke-on-Trent Central. These areas must be a priority when it comes to levelling up and fostering economic growth. Deep-seated disparities in social capital must be addressed by enabling communities to be the drivers of local social change. In particular, a community wealth fund would allow for a range of solutions that could be decided by communities based on what they know is most needed in their area.
The hon. Lady is making a fantastic speech that I wholeheartedly agree with. While talent is everywhere, does she agree that opportunity, sadly, is not? The places and spaces where people from all backgrounds can come together and build meaningful relationships are crucial to our social wellbeing, but access to them is not evenly spread throughout the country. Local people know what is best for their neighbourhoods. It is vital that the community wealth funds be available as widely as possible across the country. That involves a radical new approach to make sure that responsibility is as close as possible to the people whose lives these funds are designed to benefit.
I absolutely agree. By utilising the area-specific knowledge of local residents, priorities and desired outcomes can be determined at neighbourhood level. Polling by Survation found that the residents of left-behind neighbourhoods held a strong belief in the power of community action. A clear majority said that they would prefer a greater say over how money is spent locally. Research by the all-party parliamentary group for ‘left behind’ neighbourhoods has found that social infrastructure is what our neighbourhoods most lack. That has an impact on how people feel about their area. Clearly, we need to build community confidence and capacity.
An in-depth analysis of local area initiatives over the last 40 years by the University of Cambridge identifies characteristics that have improved participants’ chances of better social and economic outcomes. It found that the programmes that focused investment on a small geographical area of between 3,000 and 10,000 residents, which had control of decisions, design and resources to local people and adapted bespoke approaches rooted in each area’s particular characteristics, and areas that guaranteed a long-term, consistent commitment over 10 to 15 years, were found to be more likely to deliver benefits for communities.
When we talk about the politics of devolution and devolving power, too often we focus on local authority and regional level. Actually, what people really want is to get involved in their own local neighbourhoods. That is where they can make a difference. Does my hon. Friend agree that that is what the community wealth fund could potentially enable them to do?
My hon. Friend makes a good point.
As a result, it is important to get the structure of a community wealth fund right, reflecting the knowledge and skills of the local community, the aspirations for that community and the necessary governance to ensure the appropriate use of funds.
Sitting suspended for a Division in the House.
The community wealth fund is a place-based initiative aimed at natural communities in left-behind areas, typically with a population of around 10,000 people, which is much smaller than the typical local authority serving such areas. For that reason and others I have mentioned, a local authority is unlikely to be a suitable body to lead the community wealth fund process.
By involving communities in the process, whether planting street trees, investing in community pantries or creating a group of community callers, we will move away from doing things for people, or even with them, to giving them as much ownership as possible. The more local people are involved, the more transformative outcomes are. Partnerships work.
For decades, we have had a system that has treated citizens as consumers of services, rather than members of empowered communities, so a fundamental shift in our national thinking will be required to enable this new social model approach. However, it is an approach that the Government can embrace because it is a fundamental principle of Conservatism to believe in small Government and local, community-led solutions. We must challenge the narrative that suggests the solution to all inequalities lies in growing ever-larger, top-down-controlled public services. That undermines the power of communities to support their health and wellbeing, and stifles a philanthropic approach, which has been a lifeline during the last year.
During covid, we woke up to the power of communities. During the first lockdown, I conducted an online survey to gauge residents’ feelings, including the impact of volunteering on their mental health. The findings featured in the “Connecting Communities” report, which I co-authored for One Nation Conservatives. Of Stoke respondents, 39% stated that covid-19 changed their view of the local community. One resident from Stoke-on-Trent Central said about lockdown:
“I think it] highlights the untapped—undervalued—potential of people and neighbourhoods across the Country…Local community is essential in times like COVID. At first people were much more helpful and considerate but sadly the effect of this is fading fast. I feel that good will could have been harnessed and directed better locally and nationally.”
With the community wealth fund, we have the opportunity to harness this.
The indicator that shifts most when communities are part of levelling up is civic pride. When we see improvements for community outcomes, we also see improvements in other areas. Many success stories of locally empowered communities have shown that we can expect investment into projects that enhance environmental sustainability and stewardship of local resources, such as ethical food production and better green spaces. I was delighted to welcome several such local initiatives to the local food summit I hosted in Stoke-on-Trent. Standing Tall 2gether is based in Bentilee and improves the lives of local residents through food activities, training and bespoke volunteering, and has a household essentials refill hub. Birches Head Get Growing is another local initiative that encourages people to offer their time and skills to support unmet needs in the local community, moving from a gift model of support to an energetic exchange. In2 Health and Wellbeing is a social enterprise committed to improving the health and wellbeing of disadvantaged young people in Stoke-on-Trent. It uses sport, physical activity and education to engage local people across the community.
I am convinced that not only would the community wealth fund help to meet Government goals, but we should also expect knock-on benefits for the economy. Replenishing stocks of social capital is vital for seeding economic activity, but also through the direct supply of local employment, opportunities for training and skills development, and building and rejuvenating community assets.
Indeed, there is strong evidence for the impact of a community wealth fund. Modelling by Frontier Economics estimated that a £1 million investment in social infrastructure in a left-behind area could generate approximately £3.2 million in fiscal and economic benefits over 10 years, actually helping generate savings. Combined with the fact that in areas with locally led solutions there is a faster decline in crime rates, the community wealth fund is an exciting opportunity to significantly boost the Government’s levelling-up agenda without placing pressure on public finances.
Community wealth funds can also play an important role in supporting early-stage social entrepreneurs in marginalised constituencies by connecting them to wider support to maximise their growth. The proposals would provide extra initial start-up support, among other things, in the most underserved parts of England. Harnessing the full potential of communities will require targeted interventions to create jobs, stimulate inward investment and grow social enterprise and trading charities.
Members of the APPG for ‘left behind’ neighbourhoods have expressed support for the community wealth fund in the past, and the Government listened when earlier this year we made the case for including the fund as a potential new beneficiary of the next wave of dormant assets. The dormant assets scheme has created a unique opportunity to repair the social fabric of disadvantaged neighbourhoods. Now that the consultation has finished, I am grateful for the opportunity to restate my support and to recommend that the Government capitalise on the potential of investment through a community wealth fund.
Backed by a growing alliance of over 600 public, private and community sector organisations, the fund would provide long-term investment to rebuild essential social infrastructure in the left-behind neighbourhoods that many of us represent in Parliament. It would empower communities to play a much more prominent role in local decision making and inspire civic pride, as has already been demonstrated. I am incredibly grateful to my colleagues who have supported our cause so far, and I urge them to keep up the momentum so that we can deliver real and meaningful long-term change for communities like those in my constituency of Stoke-on-Trent Central and across the country.
It is an honour to serve under your chairmanship, Ms Harris. I congratulate the hon. Member for Stoke-on-Trent Central (Jo Gideon) on securing this important debate and giving us the opportunity to discuss the next wave of dormant assets and the possibility of establishing a community wealth fund.
I am proud that in 2008 the Labour Government passed meaningful dormant assets legislation, which began to unlock this crucial source of funding from financial assets such as bank accounts. Although it is important to reiterate that the priority is trying to reunite assets with their owners, where that is not possible the money goes to causes that facilitate real change in our communities. This policy raised over £800 million of funding to support social and environmental causes across the UK, so I am proud of the work that parliamentarians across the House, including many members of the APPG for ‘left behind’ neighbourhoods, have carried out. I am pleased that this proposal, in particular the creation of the community wealth fund, is being considered by the Government. However, it is important that this matter is not just considered; it must actually amount to meaningful change.
In England, funding from dormant assets is restricted to youth work, financial inclusion and social investment. It would be good to see that expanded so that the money could be used to finance a wider range of community projects. The design of the proposed community wealth fund has been informed by the success of the Big Local programme. The 2020 evaluation of the programme found that
“The concept of putting residents at the very heart of that change is showing its value up and down the country.”
A community-led approach means that local priorities and desired outcomes would be determined at local level by the people who live there. The importance of that cannot be overstated.
I want to use this opportunity to highlight the important research conducted by the Oxford Consultants for Social Inclusion, in collaboration with the APPG, which identified 225 left-behind neighbourhoods. These neighbourhoods face significant deprivation, as we heard from the hon. Member for Stoke-on-Trent Central, as well as poor connectivity and lower levels of community engagement and activity. That is especially poignant to me as the neighbourhoods identified include St Anne’s and the Washington North ward in my constituency. For example, in St Anne’s, there are only 25% of registered charities per 1,000 people compared with the English average.
Away from these statistics, I know at first hand the difference a community wealth fund would make in Washington and Sunderland West. This funding pot, which is now estimated to be £880 million, would be transformative in building community confidence and provide the foundations to enable the residents of the most left-behind neighbourhoods to bolster their social infrastructure. Consistent with this, the wards most in need of investment would receive awards, as opposed to having to compete for funding. That would be the right approach. Bids for levelling-up funding and freeports have pitted the poorest in our society against each other, rather than focusing on those in greatest need.
A number of hon. Members in the Chamber were at a meeting of the APPG just last week. I have co-chaired a couple of the meetings of the APPG’s inquiry into levelling up, in which we heard about the power of local communities to take action to improve outcomes for local people, for instance through award-winning community mental health programmes for young people, or through support to strengthen the local economy and support jobs and businesses. Levelling up seems to be cosmetic: if we move people from the bottom rung to the second rung from bottom, we can claim to have succeeded. Labour wants equal opportunity for every part of the country. The APPG inquiry shows that communities can develop themselves despite Whitehall neglect, so imagine what communities like mine could achieve with access to the appropriate resources and long-term support under a Labour Government.
That is why the community wealth fund is vital. I hope that the Government appreciate its importance, and that the community wealth fund will be one of the beneficiaries of the next wave of dormant assets.
I will go to the Front Benchers at 5.23 pm, so I ask colleagues to keep their speeches to under five minutes.
It is a pleasure to serve under you, Ms Harris. I congratulate my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon). I am in a Stoke sandwich, between her and my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), which is very nice—I do not know where Kidsgrove and Talke is today.
I regret that my hon. Friend the Member for Sedgefield (Paul Howell) is not with us today. Sadly, he has suffered a bereavement. I want to put on record my appreciation for his leadership and the strong role he plays in this place in the campaign for a community wealth fund. I also pay tribute to Local Trust, some of the staff of which I suspect are watching. That brilliant organisation has promoted this proposal from outside Parliament.
I think we all recognise that this is a cross-party proposal. I agree with much of what we just heard from the hon. Member for Washington and Sunderland West (Mrs Hodgson). I do not think that a community wealth fund requires a Labour Government, nor would it prosper only under a Labour Government. This is about getting the great mission of community development, levelling up or economic prosperity—whatever we want to call it—out of the political cycle and out of the hands of central Government. It is a tremendous measure that is in exactly that spirit.
My work outside politics was mostly in charities. I found that the most effective aspect of our work is not about the type of service that is delivered—not the “what”—but it is about the “how” and the “who” that do it. It is the quality and nature of the service that matter. What is crucial is giving people a sense of belonging and agency. That is what we need. My hon. Friend the Member for Stoke-on-Trent Central made a very good point about the importance of treating people not as passive recipients of services but as active agents in their own lives and their own prosperity. The idea of a community wealth fund speaks to that, and would strengthen that spirit across the country.
I echo the point my hon. Friend made about people stepping up, establishing mutual aid groups and taking responsibility for neighbours during in the pandemic. It is not unfair to say that, in a sense, it was easy then: people were being paid to stay at home, so they could take part in their communities. The need was obvious—people who were isolating needed to be delivered food and medicines—and the demand was short term, only a few months at a time. However, before and subsequently, and increasingly because of the effect of the pandemic and all the lockdowns, we have long-term, wicked, entrenched problems and people who are very overstretched. We do not have the capacity in our communities that we had during lockdowns.
We need to build our social infrastructure. That was the key recommendation of the report that I wrote for the Government in 2020 on how we might build on the community spirit that the lockdown had brought forth. The answer is quite simply that we need to create the conditions in which people can be good neighbours and that means creating social infrastructure.
We can do a lot with policy. This is not the moment for the discussion about how we reform public services and local government, but there is one big thing we can do. I know the Minister has been harassed and harangued on this topic by many of us over many months. He has taken it with great patience and I hope he is not going to suddenly flip and say “Ah, no!” to us at the end of the process, because we have lobbied very hard. The big idea is that we establish a great new national endowment for our communities—a community wealth fund, which would support those non-commercial or sub-commercial activities that are so essential to local growth, including parks and libraries, arts and sports centres, facilities for the elderly and for the young and, as my hon. Friend the Member for Stoke-on-Trent Central says, social enterprises and community businesses. We need to develop the capacity of local places.
I will end with one more observation. It is not enough to provide the money; we need also to ensure that communities have the capacity to bid for it, plan the services and then run the services themselves, so there is a capacity-building element in this. I pay tribute to the people who are trying to develop Community First, a model based on Teach First that gives people the opportunity straight out of university to become community organisers in an area of the UK and to develop their skills that way. Creating more opportunities for community organising will be helpful. We need to build social capital, Madam Chair, and even if financial capital is all you care about, which I am sure it is not, the evidence is that social capital is what drives economic growth and not the other way round. So we need to invest in the infrastructure of our communities and our proposal will do that.
It is a pleasure to serve under your chairship, Ms Harris. I thank the hon. Member for Stoke-on-Trent Central (Jo Gideon) for leading the debate and setting the scene so very well, and for the other contributions and those that will follow.
I recall speaking in the Chamber on this topic in January so it is one that is close to my heart. It has been almost a full year of seeking assurances on the Dormant Assets Act 2022 extending to Northern Ireland. I am very pleased that we are able to say that it is and that we are able to use it for the purposes referred to here by hon. Members. It is really good news. I completely welcome the Act’s premise of ensuring that dormant funds find a way back to their owner, and if not restored to their owner, allocated to generate social engagement and social life in large enterprises to the benefit of the country’s people and, indeed, to the benefit of all, so it is really good news.
I will quickly speak about Northern Ireland. The Dormant Accounts Fund NI supports the voluntary, community and social enterprise sector in Northern Ireland to be more resilient and prepared for the future by funding activity that increases capacity and sustainability. Community funds offer up to £100,000 for any one organisation that can make real changes in the local community. There are many people with ideas, ability and talent to do just that. Figures released by Social Enterprise NI show that there are almost 843 social enterprises in Northern Ireland, generating an annual turnover of approximately £980 million, and that almost 25,000 people are employed in the Northern Ireland social economy. I fully support the use of dormant funds to improve our social sectors. Sometimes, those are the organisations that struggle the most to get up and running, so it is good to encourage them and have a way of doing so.
There have been differing comments surrounding the use of community wealth funds, by which dormant assets can be used for research and analysis regarding left-behind neighbourhoods. We all have such places in our constituencies: those left-behind neighbourhoods that need that wee bit of help. I have them in Newtownards. They are socially deprived and we hope that we can get some of the funding out to them. So far, we have done some of that.
Some communities not only have severe socio- economic challenges, but lack social infrastructure, defined as places and spaces to meet, digital and physical connectivity and an active and engaged community. Indeed, some estates in my constituency lack all those things. Furthermore, the community wealth fund has identified 225 neighbourhoods in England with those features. Given that the Dormant Assets Act applies to the whole of the United Kingdom, can the Minister clarify whether he has had any opportunity to discuss with his counterparts in Northern Ireland how those things are going, how they are rolling out, and the success stories that are quite clearly there?
To conclude, I acknowledge the progress and success that the Act has brought so far. I am excited about it, and am pleased to see it has been a success with community groups and enterprises. There must be further engagement between them and the Government, to ensure that opportunities and benefits are provided for all.
Money should not be wasted; it should be available for our constituents to benefit from. The figures are massive, and the funding that could provide for social enterprise and perhaps community wealth funds in future is needed and deserved. Alongside the success stories, let us do a wee bit more. I am looking forward to hearing from the Minister; I suspect the answers will be easier here today than in the Adjournment debate last night.
It is a pleasure to serve under your chairmanship, Ms Harris. I congratulate my hon. Friend and constituency neighbour the Member for Stoke-on-Trent Central (Jo Gideon) on securing this important debate. I add my full support to the creation of a community wealth fund, with funding from dormant assets, focused on those areas identified by the all-party parliamentary group for ‘left behind’ neighbourhoods. Those areas have so much to give but need more support to unlock that potential. They need this investment most, having suffered from a lack of investment for decades.
In my constituency, they are the wards of Blurton West, Newstead, Mere South and Mere North. The Mere North ward is particularly deprived, identified by the APPG as the sixth most deprived left-behind community in the whole country. I am determined to play my part wherever I can to help improve the situation. That includes transport schemes; my sponsorship of the scheme to reopen Mere railway station, which has advanced to the later stages of the Department for Transport’s restoring your railway programme, is part of that. When delivered, it will significantly address the shocking levels of transport deprivation in Mere North and the most deprived parts of Mere South.
In Mere North, the lack of effective public transport and very low car ownership—40% of households there do not own a car—exacerbate the challenges experienced in accessing work and further education. The station has considerable local support, and I have been struck by the level of community engagement. That shows that communities that are deprived, where engagement is usually low, can be enthused by identifiable projects and clear paths to improving the quality of life.
Much more can be done. Stoke-on-Trent has always had huge potential just waiting to be unleashed. Projects that deliver truly meaningful changes to the social and economic outcomes of our deprived communities will be those that tackle the underlying barriers to progress. Those can only be known locally, which is why inspiring community engagement in the process of delivery is so important.
I am pleased to have worked closely recently with the Coalfields Regeneration Trust in Mere, where we have launched the “Engage Mere” project. That pilot project is focused on working collaboratively to support local people to overcome some of the deeper-seated employment and health barriers many face, and delivering long-term improvements to quality of life. We need to see more support for projects like that.
This is the main thing I want to contribute to today’s debate, because it can be overlooked. There is a need for oversight and democratic accountability in allocating some of these funds. The best way to achieve that is through requiring project sponsorship of local MPs, as is already the case with local bids for national funding through the restoring your railway fund, led by the Department for Transport, and through the levelling-up fund, where local MPs rank priorities. That has been done because MPs are likely to back schemes that generally have wider community support. We are, of course, democratically accountable for our sponsorship decisions. MPs’ sponsorship would ensure that we do not see projects coming forward that do not align with local priorities and do not have local community support.
There are certainly many groups in my constituency that I am keep to support and promote, with the longer-term interests of the community in mind. I would happily sponsor community wealth fund projects that have achieved goals. I know that the local community shares and can deliver the long-lasting improvements needed. I am sure I am not alone in that. Community wealth funds have a vital role to play in ensuring we achieve the mission of levelling up for every part of the UK. As MPs, we must play our full part in realising those benefits.
It is a pleasure to serve under your chairmanship, Ms Harris. I wish to speak in favour of creating a community wealth fund through the next wave of dormant assets. I will briefly outline some of the evidence as to why it is so important and why the core elements behind the idea of a community wealth fund have worked in the past. I hope Members will agree that we can work for left-behind neighbourhoods, such as those in Blyth Valley, and supporting the community wealth fund would signal a real commitment to levelling up communities that have been overlooked and forgotten for so long.
We know that investment in boosting local connectivity, such as transport, is vital, and I am pleased that we have made great progress with the Northumberland line, reconnecting communities that have suffered as the result of the Beeching cuts to our railways. However, community regeneration must involve investment in social as well as physical infrastructure, as the progress made by the Forget Me Nots clearly shows. I have been working in the Cowpen ward with people who felt that enough was enough, and who have set up a group called the Forget Me Nots—the name says it all about how they feel. Imagine how much more could be done if proper funding was in place to support such groups.
Regenerating our communities is no easy task. Areas such as the Cowpen, Isabella and Kitty Brewster wards in my constituency have not only high levels of deprivation but some of the highest levels of community need in the country, with a lack of assets, low levels of community engagement and poor connectivity. The Forget Me Nots now have a place to meet up for a coffee and can host drop-in sessions with crisis management services, such as citizen’s advice bureaux, debt counselling charities and outreach groups. They all make a real difference in their area, and they are the heart of the community. They know better than anyone what support is needed by local residents. Our goal should be to make lives better for people in those areas and give them the chance that they have been crying out for. This is our opportunity to do that, using the community wealth fund to change and improve lives. In doing so, we will level up.
A community wealth fund targeted at building social infrastructure will work to regenerate local communities, and it will do so from the bottom up. Pioneering and cutting-edge research by Oxford Consultants for Social Inclusion, and shared intelligence from all-party parliamentary group for ‘left behind’ neighbourhoods, has assessed the additional benefits of community-level interventions. It is robust, and it is factual. Early results indicate that in areas where community-led economic partnerships are active, crime and antisocial behaviour are lower, and there are stronger social relationships and higher levels of participation in local activities than in areas without such interventions. The evidence shows that putting power and resources in the hands of the people who need them works best, and I am hopeful that the Government will ensure that this most important of initiatives benefits from the dormant assets funding needed to make the community wealth fund a reality and truly level up the communities in most need of investment.
It is a pleasure to serve under your chairmanship, Ms Harris. I thank the hon. Member for Stoke-on-Trent Central (Jo Gideon) for securing this important debate.
Since people nowadays are more likely to have multiple bank accounts than they were 20 years ago, the issue of dormant assets is likely to continue to grow, as having multiple accounts will generally make keeping track of assets much more difficult. It is vital that banks and others in the financial services sector make a concerted effort to reunite account holders with their funds before freezing their accounts and classifying them as dormant. It is particularly important for vulnerable and elderly customers, who may have greater difficulty in regularly accessing their accounts due to increasing bank closures and an increased reliance on online banking.
Recently, HSBC announced closures of 100 branches, with Age Scotland’s head of policy noting that it was hugely disappointing. It joins a long line of banks leaving high streets at a rate of knots, with the result that many customers and communities cannot access the valuable face-to-face services they rely on. About 400,000 over-60s in Scotland do not use the internet, so without a branch they are left out in the cold as digital banking is not an option for them.
It is really important that banks reunite dormant accounts with their holders where possible. Most of the dormant HSBC accounts that were frozen belonged to customers aged over 65, and many had the power of attorney attached. That meant that those people were at real risk of losing money. More than half of dormant funds belonged to customers who had active accounts with HSBC, so it would have been easy for the bank to reunite them with their money.
Although banks have to make a concerted effort, the dormant assets scheme benefits people because it is used locally. It is a really good thing. The Scottish Government use dormant assets funding to improve young people’s physical and mental wellbeing by supporting them to learn new skills and enter employment through the Young Start programme. In Scotland, more than £67 million of dormant assets funding has been allocated to the Young Start programme, which has made more than 950 grants of up to £100,000 to voluntary and community organisations—[Interruption.] I do apologise— I am having a mare of a day. The cold has got into my very soul and I am really not doing awfully well.
Angus Women’s Aid is one of 20 groups that shared £1.4 million from the Young Start fund. It was given £100,000, which meant that it could continue to work across Angus delivering and developing a young expert group for young people affected by domestic violence. That sort of work really matters. It built those young people’s confidence and self-esteem. During the pandemic, the funding also covered tablets and internet access so the young expert group was able to meet virtually. Someone from the group said that the whole thing would have fallen apart without that sort of valuable work.
The Scottish Government have adopted the internationally recognised community wealth building approach to economic development as a key practical means by which they can achieve their wellbeing economy objectives. Community wealth building presents important opportunities for voluntary organisations to play a greater role in local supply chains and strengthen local economies, which benefits communities.
The third sector should not be a replacement for UK Government action. Charities and non-governmental organisations across the UK are under significant pressure from trying to plug the gap caused by UK Government inaction in the face of the ongoing Tory cost of living crisis. They carry out important work across communities in Scotland and the rest of the UK, but they should not be expected to plug the gap.
Charities that would benefit from community wealth funds are facing increasing cost pressures as a result of the ongoing cost of living crisis. The cost of living crisis also means that charities will not get the funding that they normally rely on. The pressure on charities has been exacerbated by the UK Government’s decision to delay the replacement to EU funding through the UK shared prosperity fund by a year. It is important that we look after our most vulnerable during the cost of living crisis. If the dormant asset scheme can help do that, it is to be welcomed. I look forward to hearing what the Minister has to say.
It is a pleasure to speak in this debate with you in the Chair, Ms Harris; I think that it is the first time I have done so. I thank the hon. Member for Stoke-on-Trent Central (Jo Gideon) for securing the debate and all the hon. Members who have contributed to it.
The significance of an expansion of the dormant assets fund for our vital civil society organisations cannot be overstated. Currently, charities are being battered financially on every side. Just last week, the Charities Aid Foundation published an analysis of a YouGov survey that showed that more than half of charities are worried about their very survival, because of the rising cost of living. When the same question was asked back in April, the figure was substantially lower, so we know that the problem is intensifying.
The causes of the problem are manifold. On the one hand, the demand for charities’ services is higher than ever, as people grapple with the devastating impacts of falling living standards. On the other hand, charity income is being hit by rising energy costs, the declining value of grants and a hit to donations being caused by the cost of living crisis. The financial reserves of many organisations had already been stripped by the devastating impact of the covid pandemic.
For these reasons, it is critical that further funding is released for charities as quickly as possible. However, funds released to the dormant assets scheme must not be used as a substitute for Government spending. After the financial difficulties of the last 10 years, this scheme is a welcome supplementary fund for budgets that have been stripped back—and not a replacement.
Earlier this year, Labour was pleased to support the Dormant Assets Act 2022 as a delayed expansion of a scheme that a Labour Government put in place through the Dormant Bank and Building Society Accounts Act 2008. The scheme has been immensely successful, both in returning £105 million in dormant assets to owners, which a number of Members have mentioned, and in distributing £745 million to good causes. Our intention was always to broaden the financial products to which the 2008 Act applies; indeed, a review was scheduled for 2011. But here we are, over 10 years later, with the 2022 Act finally in place.
The Government’s expansion of the scheme does not go as far as Labour’s expansion would have gone. We would have liked to see the inclusion of pension assets, unclaimed winnings from gambling and other funds that could have contributed to good causes. In the other place, Labour secured a commitment from the Government to consult on the potential benefits of the expanded scheme being distributed by community wealth funds. On Report, the Government repealed our amendment, which would have allowed the Secretary of State to include community wealth funds as recipients of funding in England. The amendment aimed to empower communities and it had cross-party support, so it was disappointing to see it being rejected. It is right that community wealth funds have been included in the consultation launched this summer, as promised.
Community wealth funds distribute funds to local communities, which in turn decide their own priorities—a matter that Members speaking in this debate have really stressed as being important. These funds are targeted at communities that persistently lose out on grants or that have low levels of civil society infrastructure but high need.
We know that deprived communities do not benefit from the same level of civil society infrastructure as other communities. Research by the all-party parliamentary group for ‘left behind’ neighbourhoods—I congratulate the APPG for the work it has done in this regard—found that there are almost three times fewer registered charities per 100,000 population in such areas than there are across England as a whole, and these communities also receive fewer grants. I understand this because, like my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), I have a left-behind neighbourhood in my constituency, which is Little Hulton ward.
Community wealth funds have the potential to boost and empower these communities by enabling them to invest in the facilities and services that would have the most benefit locally. I know that this proposal has strong support from civil society, including an alliance of 400 charities and community groups led by the Local Trust.
We should recognise and celebrate the successes of those organisations that have distributed the Reclaim Fund until now. Big Society Capital, Access, the Youth Futures Foundation and Fair4All Finance have all done a really good job. We want these organisations to be able to continue to carry out their important work. I would welcome an assurance from the Minister that they have nothing to fear in the event of the Government making future changes to how funds should be spent.
Labour supports the need for consultation on the distribution of dormant asset funds in England. We want to ensure that it is carried out both properly and promptly. There has been too much delay already and it is now imperative for charities that the Government act as quickly as possible in publishing their decision on the distribution of dormant assets and move to the next stage of this process.
I really mean it when I say that it is a pleasure to serve under your chairmanship, Ms Harris; like the hon. Member for Worsley and Eccles South (Barbara Keeley), I think it is for the first time. I thank my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon) for securing this debate and all Members for their contributions and their interest in the topic. I also add my thanks to those given to my hon. Friend the Member for Sedgefield (Paul Howell), who cannot be here today but has done a lot of work on this issue.
I feel I should start by trying to manage some expectations in respect of what I can say, for reasons that I will elaborate on later. That said, today’s discussion has been important and I am grateful for the thoughtful consideration of dormant assets funding and the opportunities afforded by empowering local people to decide for themselves how best to support their communities.
It is worth reflecting on the assets scheme itself, which enables dormant financial assets to be unlocked for social and environmental causes across the UK. Over the past decade, the scheme has been used to tackle systemic social challenges and to level up the communities that need it most, in particular by targeting and benefiting left-behind areas. The scheme is led by the financial services industry and backed by the Government, with the aim of reuniting owners with their financial assets. That is an important point to remember. If that is not possible, the money supports vital social and environmental initiatives across the UK.
Since it became operational in 2011, the scheme has unlocked £892 million to be spent on the current three named causes: youth, financial inclusion and social investment. The funding is focused on supporting innovative, long-term programmes and has gone towards tackling some of the UK’s most pressing social and economic challenges, including youth unemployment and problem debt. It has also invested in charities and social enterprises that serve vulnerable communities.
To date, as we have heard, the funding has been distributed by four independent and expert organisations: Youth Futures Foundation, Fair4All Finance, Big Society Capital and Access, the Foundation for Social Investment. I thank them all for their work. The funding has had positive real-world benefits. For example, as a result of the work by Fair4All Finance on financial inclusion, 150,000 vulnerable people are estimated to have saved between £50 million and £75 million in unaffordable interest repayments from high-cost lenders and loan sharks.
The scheme has also provided urgently needed finance for social-purpose organisations serving people across England, particularly in more deprived communities. This includes almost £110,000 that has been invested in Pinc College, a brilliant organisation that works to provide neurodiverse young people with a purposeful pathway to careers in the cultural and creative sectors. The college’s creative-learning studios operate in partnership with arts and cultural organisations such as the Potteries Museum & Art Gallery in Stoke-on-Trent, with which I am sure my hon. Friends the Members for Stoke-on-Trent Central and for Stoke-on-Trent South (Jack Brereton) are familiar.
The Dormant Assets Act 2022, which received Royal Assent in February and came into force in June, has expanded the scheme to include new financial assets. The scheme is set to unlock an estimated £880 million more throughout the UK. The English portion of that would be £738 million, on top of the ongoing flows from dormant bank and building society accounts. The release of the money is, of course, entirely dependent on voluntary industry participation. The Government anticipate that it could take some years for that to flow through the system.
After the Act became law, the Secretary of State launched a public consultation on the social or environmental purposes of the English portion of the funding. We ensured that the consultation was an open and fair opportunity for people to have their say on how the money could have the best impact in England. The consultation ran from June to 19 October and received more than 3,300 responses, including from financial services industry participants, civil society organisations and members of the public. It was gratifying to see so many people engage with how dormant assets funding should be spent in England in the years to come.
The consultation asked respondents to share their views on the three current named causes, the inclusion of community wealth funds in the scheme and any additional causes that they believed should be considered. All responses are being assessed and considered against a set of criteria published in the consultation. Any changes to the current causes, including if the scheme were to establish a community wealth fund, would need to be set out in secondary legislation and be approved by both Houses. Our officials are working at pace to analyse the thousands of responses to the consultation and I expect we will be able to publish a response in early 2023.
Let me turn to community wealth funds themselves. I am glad to see that they have brought together Members from across the House. As Members will know, community wealth funds are schemes that give pots of money to communities right across our country, empowering them to make their own decisions on how best to invest in their neighbourhoods. Such communities are typically areas of fewer than 10,000 residents.
The aim of community wealth funds is to direct funding to those areas that experience the highest levels of deprivation and the lowest social capital. The neighbourhoods that a community wealth fund could support are all too often ineligible for or unaware of how to apply for funding to address and overcome those challenges. This may be because local residents may not have the knowledge about grant processes, do not have the skills and experiences needed to apply for alternative funding sources or are unable to identify challenges and solutions.
Proposals for community wealth funds suggest that spending decisions should be made by local residents, who can design bespoke solutions that would improve their communities and the lives there. Allowing local residents to make the final decision would incentivise the involvement and participation of community members in the decision-making process, and using local knowledge would make spending as effective and impactful as possible.
I have always been an advocate for local people driving change in their own communities. It is something I certainly saw when I was growing up in Wales and during my more than 16 years of work in the charity sector. I believe local people will have the individual answers to addressing many of the disparities that Members have mentioned.
I am sure Members will appreciate that, as I said at the beginning of my speech, I cannot yet comment on whether community wealth funds will become a named cause in the dormant asset scheme. As I said, we are still reviewing the responses and the final decision rests with the Secretary of State, so I would not want to pre-empt the outcome of the consultation as it would undercut the fair and open process. However, I am deeply grateful for the opportunity to discuss this important idea and the inclusion of community wealth funds, and I am grateful for many of the excellent points that were made.
It is clear from the debate that we all share the same ambition: to ensure that the dormant asset scheme continues to be successful in unlocking such assets for public good. I thank colleagues for their patience while the outcome of the consultation is decided. I certainly look forward to engaging with them all as soon as the response is published in, I hope, early 2023. In the meantime, the contributions today have been absolutely invaluable in highlighting the benefits that the inclusion of community wealth funds could bring. I finish by again thanking my hon. Friend the Member for Stoke-on-Trent Central for leading this important debate.
I thank you for your chairmanship, Ms Harris, and I thank the Minister for listening. Clearly, there is more to be done once we have the consultation results.
I thank everybody who took part in the debate, which has been very good humoured. I think that reflects the fact that we all represent neighbourhoods in our constituencies that we hope will benefit from decisions that will hopefully be made in the new year.
I was interested to hear from the hon. Member for Strangford (Jim Shannon) about what might be achieved in Northern Ireland, and from the hon. Member for Motherwell and Wishaw (Marion Fellows) the interesting example of how Scotland has used the money from these assets.
Now that the dormant assets consultation has closed, it remains for me to urge the Minister to consider the community wealth fund as a new beneficiary of dormant assets. If we can make that change, we can make levelling up a reality in the neighbourhoods in our constituencies that are the most left behind.
Question put and agreed to.
That this House has considered dormant assets funding and community wealth funds.