To ask Her Majesty’s Government how much money from dormant bank accounts has reached front-line youth services to date.

Although no money from the dormant account scheme has yet been released to any of the spending priorities, the 2009 PBR announced that the Co-operative Financial Services Group intends to submit an application to the FSA for authorisation to establish and administer the reclaim fund. If the work on this proceeds as planned, it is expected to be operational by mid-2010, which will enable funds to flow to the Big Lottery Fund and to spending priorities from that date.

My Lords, I suspected that the answer would be a big fat zero and I have not been disappointed. Is the Minister aware that none of the youth groups with which I have talked knows anything at all about this, and that the Big Lottery Fund, which will distribute the money eventually, has not even had its policy direction from the Government? Will the Minister ensure that when the policy direction is sent, it is as flexible as possible so that the Big Lottery Fund can respond to what young people really want rather than to what Whitehall prescribes?

The direction to the Big Lottery Fund lies within the authority of the Department for Children, Schools and Families, after consultation with DCMS and HMT. That direction will be given in due course, but, first, we must follow the procedures decreed by Parliament to establish and authorise the reclaim fund. Once that has been done, the mechanisms will be set in place to address the priorities which have been very clearly delineated in the 2009 PBR.

Can the Minister tell us how much money is envisaged? Is there anything firm yet as regards the money that will be available from these dormant accounts?

Our best estimate is that the stock of existing dormant accounts which will transfer into the reclaim fund will be in the order of £300 million to £400 million. Clearly being more precise than that is not easy because it will depend on subsequent reclaims emerging from people who come forward to say that their funds are being transferred to the reclaim fund, but £300 million to £400 million is likely to be the initial stock. Thereafter, the annual amount being transferred to the reclaim fund is likely to be in the low tens of millions of pounds per annum.

My Lords, the Minister will know that reuniting bank accounts with their owners is at least as important as using that money for the Government’s pet projects. Can he update the House on how much has been reunited with owners via the My Lost Account scheme, which was set up by banks and building societies?

I am afraid that I do not have those figures to hand, but I shall write to the noble Baroness with the details that she seeks.

My Lords, I thank the Minister for the new information that Co-operative Financial Services has applied to take on this job. I was fearful that we were going to have an orphan looking after orphan funds. Bearing in mind that the second largest building society, Britannia, has recently merged with Co-operative Financial Services, is there not a conflict of interest?

Part of the authorisation process that the FSA will be carrying out will be to ensure that conflicts of interest are appropriately managed. That would happen whichever bank, building society or financial institution had been appointed to administer the reclaim fund, which will have its own governance structure and independent oversight to ensure that it operates in an even-handed way. I am delighted, notwithstanding that the major banks chose not to support this initiative by offering to run the reclaim fund, that Co-operative Financial Services has agreed to do so. That speaks admirably of the positive attitude towards society and the community from the co-operative and credit union movement.

Does the Minister not feel that the Government have missed an opportunity to set up a social bank which would provide seed capital for people in very deprived areas to set up small businesses and do something about the terrible unemployment that we now have?

The guidance given in the 2009 PBR included an allocation of funds to a social wholesale investment fund, which is precisely the sort of body that the noble Lord speaks to. We also want in particular to direct funds to aid and support young people. We are all aware of feral youth standing on street corners with no idea of their true values, purpose or opinions about anything; I think in particular of young people in Notting Hill. Anything that we can do to help them clarify their thoughts must be welcome.