Wednesday 23 June 2021
The Grand Committee met in a hybrid proceeding.
Arrangement of Business
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, respecting social distancing, others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
I will call Members to speak in the order listed. During the debate on each group, I invite Members, including Members in the Grand Committee Room, to email the clerk if they wish to speak after the Minister, using the Grand Committee address. I will call Members to speak in order of request. The groupings are binding. Leave should be given to withdraw amendments. When putting the Question, I will collect voices in the Grand Committee Room only. I remind Members that Divisions cannot take place in Grand Committee. It takes unanimity to amend the Bill so, if a single voice says “Not content”, an amendment is negatived, and if a single voice says “Content” a clause stands part. If a Member taking part remotely wants their voice accounted for if the Question is put, they must make this clear when speaking on the group.
Dormant Assets Bill [HL]
Committee (2nd Day)
Clause 29: Distribution of dormant assets money for meeting English expenditure
54: Clause 29, page 21, line 18, after “no” insert “other”
My Lords, I beg to move Amendment 54 and will speak to Amendment 55. I am grateful for the support of the noble Baroness, Lady Kramer, on Amendment 54 and of the noble Baronesses, Lady Lister and Lady Bennett, and the noble Lord, Lord Blunkett, on Amendment 55. I will focus the bulk of my remarks on Amendment 55 but will first deal briefly with Amendment 54. I thought about degrouping it but, in the interests of speed, the Committee might be able to deal with it as part of this group.
Amendment 54 is about transparency, a point raised by the noble Baroness, Lady Kramer, in her comments on the group beginning with Amendment 4, which the Committee discussed at its first sitting on Monday. Its very simple purpose is to ensure that, if the Secretary of State wishes to introduce restrictions on the way that the dormant assets scheme works, these have to be contained in regulations. This gives a proper degree of transparency to the actions of the Secretary of State. We all have our worries about the efficacy of the scrutiny of regulations, but this does at least bring them before your Lordships’ House. This is primary legislation, so will be in place for some years; it would clearly be inappropriate for a future of Secretary of State to be able privately to influence the operation of the scheme. That is the purpose of Amendment 54; I trust that the Government would have no problem with its objective.
In Amendment 55, I am returning to a point which I made at Second Reading: the very uneven distribution of social capital across the country. I fear that that unevenness may have been increased by the events of the past 15 to 18 months. This unevenness was originally brought home to me sharply during reviews of the charity and voluntary sectors that I carried out for the Government. It was my practice to try and hold meetings in different parts of the country to be able to take on board local concerns and questions. The fluctuating numbers of attendees at these meetings provided an interesting yardstick of the strength and vibrancy of social capital in those areas. When I chaired for your Lordships’ House the Select Committee on Citizenship and Civil Engagement—I was very lucky to have two such experienced committee members as the noble Lord, Lord Blunkett, and the noble Baroness, Lady Lister—the same situation revealed itself in our trips. Each situation is different, of course, but certain common themes to this problem have emerged. Funding is of course important, often in small, repeated amounts rather than in big dollops, but this is about much more than just money. It is about finding physical structures—buildings in which people can meet, socialise and help create communities. There is a third element: the need for practical experience and paid help to supplement voluntary efforts.
One of the most distressing aspects, for me at least, was the loss of self-confidence and self-belief. For too many, aspiration and hope had died, overwhelmed by the scale of the apparent challenge but, when a spark had been lit, often by a small group of people, the results were remarkable. I recall, on our committee visit to Clacton, that the pub which had been bought by the community, an ACV, was now breathing life into the area in a whole host of ways not originally envisaged. Money, physical structures and practical help are important, but there is yet another requirement—staying power and endurance. Rebuilding social capital is a marathon, not a sprint. Volunteers have lives outside the work they do for their communities.
On our committee trip to Sheffield, we met a group helping to keep libraries open and extend their opening hours, better to assist and serve their communities. But as members of the library group pointed out graphically, if Mrs Smith, say, has undertaken to open the library at 9 am on a particular morning and her child falls ill in the night and has to be taken to hospital, the library will not open because, quite understandably, rightly and properly, her responsibility to her child will take priority. That will be a blow to the community, unless there is a structure to ensure that someone steps into Mrs Smith’s place. That is why some limited paid back-up is important. It can be seen that this is a complex, shifting kaleidoscope of requirements that needs to be sustained over time.
Finally, to be really effective, to ensure that actions are done by and not done to, these activities must be and remain really local. That may seem very obvious to the Committee, but I shall quote a couple of sentences from our Select Committee report. We wrote:
“Communication between citizens and government at all levels is often poor, and was a subject frequently raised not just in formal evidence but by those we spoke to on our visits. When seeking people’s views, communication tends to be with the ‘gatekeepers’—those who hold themselves out, not always accurately, as representing their communities. People, especially in deprived areas, must be made to feel that government is speaking directly to them, working with them and for them, and paying attention to their needs and wishes … Communities must also be prepared to open up and bring more voices into the conversation.”
That is the background to the amendment. The concept of community wealth funds could be particularly well placed to meet the complex requirements I have described. They could provide funding, could provide a means to open and maintain buildings, could employ the limited permanent staff needed to provide the necessary structural framework and, finally, could do all these things over the long period needed to provide remedies for the deep-seated, structural challenges that these communities face—hence my interest in the briefing sent to me and many Members of your Lordships’ House by the Community Wealth Fund Alliance. However, I have to admit that I had a concern about the original briefing. The alliance speaks for 400 civil society public and private sector organisations, and the briefing sought the tabling of an amendment establishing a “Community Wealth Fund”—with a capital C, a capital W and a capital F—as a national body.
I told the alliance I believed that the concept and the approach they represented was entirely praiseworthy and worth supporting, but I did not think that as yet there was enough practical experience to justify a “Community Wealth Fund”, with capital letters, appearing in primary legislation as a national body. Could a CWF—with the capital letters—appear as a national body in future? Of course it could, but we are not there yet. We need more practical experience of how this alliance of 400 different organisations will work together, and how methodologies and objectives will change in the light of real-life experience.
Today, I am delighted to urge the Government to support the creation of community wealth funds—individual local efforts, shaped to meet the particular needs of their areas. I think it highly likely that a national body will emerge in due course, and perhaps become a fifth distributor but, as I have said, I do not think we are there yet. We need more experience of building from the ground up. In short, Rome was not built in a day.
My Lords, I make it clear at the outset that I am very supportive of the amendments tabled by the noble Lord, Lord Hodgson—first, his amendment on transparency, which was usefully preambled in our debate two days ago, and secondly, his amendment relating to a call for the Secretary of State to include the establishment of a so-called community wealth fund in an order under new Section 18A of the 2008 Act.
Labour supports, of course, the principle of putting additional funding into the hands of local communities. Our experience, rather like the noble Lord’s, is that those things are best left local: communities need social capital support to ensure that they work with the charitable interests to achieve the objectives of many of those locally and nationally based charities. The Local Trust and the Community Wealth Fund Alliance have made a strong case in their briefing notes, and we recognise that there is broad-based support for this proposition right across the sector.
The idea of community wealth funds is not new, but the case for long-term and locally focused investment has become even more compelling in the light of the Government’s levelling-up agenda and of events during the Covid-19 pandemic. Our Amendment 56 would make a small but potentially significant tweak to the noble Lord’s proposed text, in that it specifies that new National Lottery community funds should operate independently of National Lottery structures. We appreciate, of course, the good work that the National Lottery Community Fund does across the country, but we saw the arrival of the Bill as an opportunity to debate additional methods of disbursing money to the communities that need it.
The alliance behind the community wealth fund proposal have given it a great deal of thought, and have undertaken research on how best it would work and how a system could be made operational in practice, with neighbourhoods empowered to create a positive community vision, and given time to deliver the change they seek.
There is a range of evidence from Britain and across the world that giving communities a proper stake in local spending decisions produces far better results than imposing schemes from the top down. As with our previous debates on the asset clauses, we should not be confined by how things have been done in the past. Instead, we argue that we should seize opportunities to try new approaches.
I have little doubt that the Minister will say that there is not yet strong enough evidence for the Government to support this approach. If that is the case, would the DCMS be prepared to fund pilot studies in a small number of communities across England, to gain more data? The noble Lord, Lord Hodgson, in a sense, alluded to that. Perhaps we should consider a pilot approach, before bringing into play the full effect of a community wealth fund clause in, or an amendment to, this legislation.
That would be a practical and pragmatic approach and would garner support, but we obviously want to listen to what the Minister has to say on this. We will be more than happy to discuss with her and colleagues across the House how we can make this work because, like the noble Lord, Lord Hodgson, I think that it is a winning idea that would genuinely empower local communities.
I should also make it clear that we welcome my noble friend Lord Blunkett’s amendment on using money from dormant assets to fund financial education schemes. I hope that the Minister will respond positively to that suggestion. Again, previous Governments—including Labour Governments—thought about rolling that out. While this Government have introduced a breathing-space scheme for personal debt, surely it is better to take action to prevent problem debt occurring in the first instance.
Finally, we questioned whether Clause 29 should stand part of the Bill to reflect concerns that some charitable organisations have around long-term certainty. Despite some help from the Government, many charities have taken a financial battering because of Covid, and although they have received funds from the dormant assets scheme, those can never be taken entirely for granted. The rules and criteria have remained steady since its inception, so this is a viable source of funds. Will the Minister talk in her response about the importance of flexibility? While we agree to a certain extent, we need a clear signal that the fund will be used to further the excellent work done by charities rather than to support short-term political agendas.
In the meeting before Grand Committee, the Minister and her officials offered some assurance about how future changes to distribution rules might take place. I ask her to restate them so that they are on the public record and so that there can be clarity right across the sector about how the funds will operate. I commend our amendment and give notice that we support the others in the group.
My Lords, I am very pleased to have put my name behind Amendment 55, spoken to by the noble Lord, Lord Hodgson. I strongly support the presentation that he made this afternoon. His work on the charities report and in chairing the Select Committee on Citizenship and Civic Engagement were milestones in understanding the critical importance of civil society and an enabling state. The way in which he presented his case this afternoon reinforced the importance of communitarianism—of building from the bottom, and of engagement with and facilitating the ability of communities to work for themselves and those whom they serve.
In a moment, I will obviously wish to speak to Amendment 56A in my name, but I want to say a word or two first in support of the noble Lord, Lord Hodgson, and my noble friend Lord Bassam in terms of the possibility in future of building from local experiments and local development into a national community wealth fund, and the facilitation of that through the legislation so that it might happen organically. I am proud of the work done over the years by South Yorkshire’s Community Foundation, which has been able to distribute grants and support local initiatives. Greater funding and support for that kind of operation is where organic change can take place and where people can see not only the contribution made from the unclaimed assets fund but the contribution that they can make in small ways by adding to that and being part of the process of delivery. They see where the funds have gone, experience the benefit of them and then take forward those learning processes to build that enabling state at local level, reinforcing civil society and enabling people to make decisions for themselves. The case is overwhelming and the question is about how we should go forward. I hope that the noble Baroness will be able to indicate that on Report there will be a welcome for a facilitating clause, which will enable us to move forward on that.
On Amendment 56A, I commend the Kickstart money and those who have, over many years, fought for better financial education throughout the education service. Obviously, this applies to young people who reach 16 and are looking to their future. I remember, as Secretary of State for Work and Pensions, going around the country on a fact-finding and informing exercise on what needed to be done about the future of pensions and the pension age. We were picking up the report by Adair Turner—the noble Lord, Lord Turner—and looking at the extension of the working age. We looked at auto-enrolment, which took so many years to implement, having been agreed back in 2005, and the way in which young people should think about their future.
This was complemented by the then child trust fund, which we addressed in the House yesterday and is relevant here. It was designed to enable people to have a nest egg—a small amount of capital that they could engage in their own lives. What we are talking about here has a synergy, and it is important for us to understand how the capital asset divide is a major challenge for the future. If you inherit a house from grandparents, parents or an uncle or aunt in London, it is the equivalent of winning the lottery. If you live in rented accommodation in the north of Sheffield, Barnsley or elsewhere and have nothing to pass on to future generations, you will see the reinforcement of intergenerational disadvantage.
I hope that financial education will help in its own right but also with the wider debate on where we are going as a country. It is particularly important that this happens at primary level; at secondary level, there is at least PHSE and the emphasis that can be placed on the economic side of the financial learning exercise. In the citizenship curriculum, the wider issues can be addressed as well. In primary education, those two things, while relevant to the curriculum, are not taught in a specific or identifiable way and it is really important that we get it into primary education at a very early stage so that young people understand the importance of their part in managing their money and how the financial world works around them. The unclaimed assets fund could be of great benefit if we can get this right.
My Lords, I, too, was a member of the Select Committee on citizenship, but clearly I did not make as big an impression as the noble Lord, Lord Blunkett, or the noble Baroness, Lady Lister. I am very glad that I was, however, because it was one of those pieces of work from which one comes away having learned a great deal about a subject that one thought one already knew a lot about but where there was much more to learn.
One of the lessons that came to members of that committee quite forcefully, particularly from people in communities that felt they had been left behind, was the very low level of knowledge of how to participate in local democracy—simple things such as knowing how to be eligible to vote, for example. In part, that fuels what I shall say over the next few minutes. I do not object to community wealth funds; I have considered them over the past few years and they are undoubtedly well intentioned and beneficial. It is also undeniable that they would in some—perhaps most—cases provide assets to go with the aspirations of local people to own and control the assets, which they are already legally able to acquire under the challenge fund and with the assistance of organisations such as Locality and so on. That legal right is already there.
My question about this is: in general, is the addition of another entity that has to be governed, managed, staffed and accountable advisable? Is it an addition or will it be an unnecessary added complication? We have hundreds of local community groups that rely on the knowledge, skills and good will of people in those localities. What they very often lack is technical skills.
Here I will pick up some of the points made by the noble Lord, Lord Bassam of Brighton, about the National Lottery Community Fund. I go back a very long way. I remember the creation of that fund and the impact it had on the voluntary sector, which I worked in at that point. It is unarguable that the fund brought in resources that could not have been imagined before its creation for capital, sports and social programmes.
However, it has always been a puzzle to me how we enabled the National Lottery Community Fund to be created and to be the size and extent it is, yet we have never had a requirement that part of its money would go towards sustaining and developing the infrastructure of the charities and community groups that largely deliver its programmes. The National Lottery sits on top of the rest of the voluntary sector and requires it to deliver its agenda. It does not have an obligation to sustain it.
It is worth noting that the financial position of the voluntary sector is vastly different from how it was even 25 years ago. Many noble Lords will know that NCVO, together with Nottingham Trent University, is carrying out a tracking exercise on the impact of Covid on the voluntary sector. It is producing some really interesting results about the way levels of demand for local services are rising and the extent to which, in this last year and in the forthcoming year, the resources of those charities will be under significant strain. At least 30% of them expect that they will have run out of reserves and will go out of business. That is the overall position.
I will tell just one story. Quite a number of years ago, National Lottery funding was used to develop a series of healthy ageing centres. These were flagship programmes set up with five-year funding. The great thing about them was that they had to be innovative and dynamic. Therefore, they have to be free-standing and to bring in new partners. They therefore could not be set up and run by the existing local older people’s organisations. They ran very well and highly successfully. Then the five-year funding ended, at which point the remnants of their good programmes were all absorbed by the then-existing local Age Concerns and so on. I wonder whether, in setting up this kind of mechanism, we might not set people up for a similar kind of scenario.
In the best of times, if we had a voluntary community sector that was not under pressure, this might be something into which we could put some investment to see whether the theory behind it is correct: that setting up this kind of stand-alone fund, which would be in addition to what already exists in many places—local community funds into which local philanthropy is encouraged for expenditure in a particular area—really would make a difference to the holding and running of assets, particularly in poorer communities. At the moment, however, I do not think that it is a wise thing to do. All local government departments, but particularly those in poorer areas, are under intense strain. Over the past year, local resilience forums in local authorities have done a tremendous amount of work just in trying to keep people and communities going at a very basic level. They have sometimes had to work very hard to bring in new groups of volunteers, manage them and make sure that the best use is made of their time and talents.
Although I can see the undoubted good intention in all of this, perhaps it is not something that we should pursue in this way. Instead, perhaps we should look at local resilience forums and, in particular, ways in which we could re-establish something that has been hacked back or, as in many places, no longer exists: the CVS network, which supplied skills, training and so on to communities and charitable enterprises. We should look at whether we could get that, alongside local government, back to work in these communities.
My final point is this: when youth services are disappearing around the country, there must be a priority to get them back in some form rather than to pursue this method of stimulating community involvement.
My Lords, it is a pleasure to be able to speak in support of Amendment 55, tabled by the noble Lord, Lord Hodgson of Astley Abbotts—not least because, as he said, I was a member of the Select Committee on Citizenship and Civic Engagement, which he so ably chaired.
I must admit, it is only recently that I have been made aware of the campaign for a community wealth fund and that I have joined the APPG for “Left Behind” Neighbourhoods. However, I have been persuaded by the evidence from the Local Trust and others that a community wealth fund—or, to take on board what the noble Lord said, perhaps community wealth funds—potentially represents a key building block in the aspiration, shared across the political divide, to build back better or, as Sir Michael Marmot put it, to build back fairer.
In his new report, The Marmot Review 10 Years On, Sir Michael emphasised this:
“Empowering and sustaining communities was central to the 2010 Marmot Review”—
his original review of health inequalities. He also observed:
“Over the last 10 years, these ignored communities and areas have seen vital physical and community assets lost, resources and funding reduced, community and voluntary sector services decimated and public services cut”.
Both in his report and in his Covid update, he called for investment
“in the development of economic, social and cultural resources in the most deprived communities.”
In a similar vein, as I noted at Second Reading, a number of bodies, including the Legatum Institute, have argued the importance of social investment to the levelling-up agenda. According to a recent survey published by NPC, the general public believe that levelling up must address social needs, and just yesterday, the Education Select Committee referenced the idea of a community wealth fund when discussing the implications of the levelling-up agenda for education and children’s outcomes.
While dormant assets, as underlined at Second Reading and in line with the additionality principle, must of course not be used as a substitute for government funding, the idea of community wealth funds as proposed in this amendment provides an opportunity for “empowering and sustaining communities”, to quote Marmot. It would be targeted at a very specific group of communities or neighbourhoods: those in which serious deprivation is combined with lack of social infrastructure, or what Community Links calls “civic inequality”. In its recent report Making a Good Place, Community Links concludes:
“The case for investment in social infrastructure is strong, not just because of the long-term benefits that it brings and the need to address civic inequalities, but also because of the pressing situation created by the Covid-19 pandemic, which makes it all the more important to create good places that promote good mental and physical health and well-being and resilience to other attacks.”
According to Local Trust, which spearheaded the campaign for a CWF, in its experience communities lacking in places to meet and social infrastructure, such as youth centres—so it does include support for young people—pubs, cafes, parks and community hubs, can find it difficult to nurture the social interactions and bonds that play an essential part in developing a community’s civic spirit. The trust argues that investment in social infrastructure is foundational in that it helps to build knowledge, skills and confidence in marginalised communities, thereby contributing to a lasting legacy of change. In response to the noble Baroness, Lady Barker, what is important is the knowledge of continuity of funding that one does not necessarily get from local philanthropy.
As a report from the IPPR Environmental Justice Commission shows, this can strengthen environmental as well as social action in deprived communities. The commission argues:
“For communities to thrive in a climate changing world they must be given greater ownership and agency”.
As I said at Second Reading, in a point that has already been made, a particularly attractive aspect of the CWF is the emphasis its advocates place on the control over spending decisions that it would give to local residents. I quoted the Public Services Committee, which has consistently made the case for user involvement in the development of services if those services are to meet local needs and to be resilient.
There is growing recognition that failure to embed genuine community involvement is one reason why past local-area initiatives have not been as successful as they might have been. To quote Community Links again:
“Community participation in decision-making ensures that investment genuinely serves those it aims to support and also helps build capacity within the community”.
The proposals for a CWF contain detailed suggestions for how this could be done and how to build accountability into its structures. That perhaps goes some way to address the concerns of the noble Baroness, Lady Barker, as to why this kind of structure is necessary: it perhaps adds something to what is there already.
Polling research carried out for Local Trust and its experience of running the Big Local programme suggest there is a real appetite in deprived communities to take on the challenge, provided there is appropriate funding and support to build capacity and confidence. Research in so-called left-behind areas found that three-fifths agreed that local residents have the capacity to make real change in their area, while seven out of 10 said it should be local people and community organisations leading decisions about how any funding should be spent.
The release of new dormant assets under the Bill provides a timely opportunity to invest in such areas through proposed community wealth funds, which, as we have heard, have the support of over 420 organisations, including the NCVO, and 35 local or combined authorities. Again, the fact that it has such strong support from the voluntary sector, the NCVO and others perhaps goes some way to counter the concerns raised by the noble Baroness, Lady Barker.
While I am not looking to pre-empt the consultation that we will discuss shortly, I hope the Minister will be able to give us some idea of the Government’s views about the proposal for community wealth funds as an appropriate use of a portion of the dormant assets that will be released. At Second Reading, despite it having been raised by a number of noble Lords, I think she carefully avoided commenting on it. I hope she will be able to provide a sympathetic response that will give hope to the 423 organisations in the community wealth fund alliance, and to those living in the deprived communities that stand to benefit from such funds.
My Lords, there is a clause stand part element to this group and I shall address it first as it has not been the subject of discussion. It is important to make the point that Clause 29 removes the requirement to focus on the needs of young people, financial education, access to finance and social investment from primary legislation and puts the responsibility for the areas of focus into future secondary legislation—I know that the current rules stay in place until the first SI comes. That is a troubling issue that Parliament has to consider because we all know that statutory instruments cannot be amended and that killing them is a constitutional crisis, so Clause 29 asks us to change the framework very substantially, and that is an area that Parliament has to consider.
I do not mean to be insulting to the Government, but cronyism is a real worry—frankly it is a worry with any Government—as are fads and fancies. They are not ill intentioned but they tend to mean that attention diverts from one place to another and lacks long-term consistency. It is very hard to deal with in secondary legislation. Will the Minister discuss whom she anticipates will be the winners and losers when we make this change and remove these various obligations from primary legislation? We really do need to know.
A great deal spills on to the consultation process, which the Minister will no doubt mention. We shall deal with that in another group, but I point out now that, although I am sure the Minister will talk about public consultation, it is not in the legislation. There are a lot of issues to deal with around that.
I now turn to Amendment 54, moved by the noble Lord, Lord Hodgson, which I was glad to sign. I hope it is just that the drafters of the Bill wrote a badly constructed sentence and that the transparency that we would have hoped for is intended. Given the number of government amendments, I suspect the Bill has suffered from some rather rushed drafting, and if there is a government amendment to sort this sentence out, I would not object and I am sure no other Member of the Committee would.
The heart of the discussion today has been the proposal of the noble Lord, Lord Hodgson, supported by many others, for the specific inclusion of a community wealth fund. I can see scope for very good work here, but I have heard three concerns, some expressed here, and I want to pick up on them quickly. My noble friend Lady Barker talked towards one of them, but she did not explicitly mention it. It is about the character of the dormant assets fund. It is not an endowment fund. The numbers in the dormant assets fund are large because we were capturing 10, 15 or perhaps even 20 years of dormant assets that had been sitting around and were unspent. I reckon that dormant assets from banks and building societies are fairly close to exhaustion now. There will be new ones every year, but the bulk of dormant assets have already gone through the system. We are now drawing in more assets but they will follow the same pattern, and we may find future assets to put into the fund.
The noble Baroness, Lady Barker, made the point that you can create something very successful and provide it with funding that can last for five years but, if it has no sustainable funding beyond that point, one is in something of a bind. I am not sure that many people have realised the character of the dormant assets fund. The point is that it should be exhausted and driven down to as close to zero as soon as possible by a combination of reclaim and the paying out of money. It cannot be replenished and continually provide support for many of the community wealth funds in the way that has been described. Sadly, there has to be some real thinking about how all that would work.
The second issue—I am picking up on an issue raised by the noble Baroness, Lady Barker—is yet another layer of administration. It needs thinking through. We have four distributors at present, all of which, as far as I can see, could pass funds under the current rules of social investment to local community groups doing all kinds of activities. If they have not been doing that, there is a serious question as to why. With money so precious within the charitable field, we need to know that there is going to be a major benefit that will outweigh another layer of administration. We all know that that is a real battle for many areas of the charitable sector.
Thirdly, as mentioned by the noble Lord, Lord Hodgson, there is the gatekeeper issue. A fairly rigorous mechanism, and possibly not a cheap one, will be needed to ensure that money intended for a community at large does not come under the control of a limited number of gatekeepers. We know that that happens. Some brilliant, extraordinary local work is being done, but we have all seen the opposite as well. How all that is managed has to be addressed.
I am certainly not opposed to the idea of community wealth funds. If they need a linking mechanism, it should be thin and lightly managed, perhaps by an overarching linking organisation, but there is work to be done in this arena. I have heard that echoed in most of the statements that have been made.
On Amendment 56A in the name of the noble Lord, Lord Blunkett, I, too, received the piece from KickStart Money and could not but agree with the noble Lord about the importance of financial education in primary schools. However—forgive me—is that not supposed to be already in the 4-11 national curriculum? Is there not a financial capability requirement in it? Have I not seen endless stuff from the various high street banks and the Money Advice Service, all of which are meant to be involved in this process, on the literature and support they have provided for such programmes? We will come to additionality later, but it strikes me that financial capability jolly well ought to be powerful within the national curriculum and government-supported. There may be various things that can be done to add dimensions or whatever else on top, but I am troubled by the idea that it requires significant additional support from the dormant assets fund. If it does, as far as I am concerned, something is going badly wrong in the Department for Education and someone needs to go right down there and start doing some serious kicking, because this should not fall so extensively on the charitable and social enterprise sector.
As I have said, I am concerned about the fundamental change implied by Clause 29. I suspect that we are not going to oppose it, but the Government have failed to make the case. The only case they have ever made is, “This is how the devolved Administrations work and we ought to look like them”. I have never heard the UK Government make that argument before in any area. There needs to be a much more substantial argument for taking these obligations out of the Bill. We will come to discuss the consultation that will shape the new obligations in a few moments.
I start by thanking all noble Lords who spoke for their reflections and remarks on the amendments in this group. My noble friend Lord Hodgson put forward Amendments 54 and 55; the noble Lord, Lord Bassam, put forward Amendment 56; and the noble Lord, Lord Blunkett, put forward Amendment 56A. As we have heard, these amendments seek to enable specific causes to be supported through the Bill—namely the establishment of community wealth funds or provisions for primary financial education—and, in the case of Amendment 56, to clarify that the National Lottery Community Fund could not deliver a community wealth fund itself.
I shall start by responding to my noble friend Lord Hodgson and the noble Baroness, Lady Kramer, regarding Amendment 54. I assure your Lordships that any future restrictions on spending in England would be contained in secondary legislation.
I recognise that many of these amendments have been tabled with the purpose of sparking a conversation on these initiatives; it is without question a conversation worth having. My noble friend Lord Hodgson expressed very eloquently, as did the noble Baroness, Lady Lister, the value of local community organisations and the needs of those communities. I have certainly seen, on my own visits, similar examples of the value that they can bring. Indeed, more broadly—and clearly beyond the scope of this legislation—we are hoping very much that both the levelling up fund and the UK shared prosperity fund will invest in what I think we described as the infrastructure of everyday life, much of which we have talked about this afternoon.
I also echo the comments of the noble Lord, Lord Blunkett, about South Yorkshire’s Community Foundation and the great work it does, mirrored across the country by many other local community foundations.
While we think that this is a conversation worth having, we are clear that a consultation, as set out in Clause 29, is the best way to agree future spending priorities for England. The noble Lord, Lord Bassam, suggested that I would argue that we need more evidence before we can support a single cause. In one way, I agree with him, but there is a question before that. The point of the consultation is not just to identify the causes and restrictions that will be placed on future moneys; it is also to understand which of these should take priority in future and why. To do so, we need to identify the principles on which we would make such a prioritisation. Attempting to arrive directly at the answer by including specific causes in the Bill would limit and potentially distort the scope of the consultation and compromise its transparency, inclusivity and impact. Work on preparing the consultation will begin following Royal Assent, provided that the Bill passes with this measure. We will need to determine what these principles should be.
I hope it is helpful if I give a few examples of the kinds of issues that I think are important to discern through the consultation. For example, we might consider the benefits of focusing thematically at scale across England. We could take the example of the work Fair4All Finance is doing in trying to put an end to high-cost credit in this country—something I am sure we can all agree would be a great achievement. Contrast that with locally driven initiatives, such as the community wealth fund; we have heard much about their merits. I am not trying to argue that one is right or wrong; I just think that we need the discussion between competing priorities.
We could also think about the size of the problem that we are aiming to tackle. The noble Baroness, Lady Kramer, also helpfully pointed out that this is not an endless flow of money. These should be problems that can be addressed within a certain timescale, so that the quantum and duration of the money released from the scheme in future would make a material difference—on Monday, noble Lords raised points about the ability to attribute and measure the impact achieved with the funding—as well as unlocking other funds using it. That point was raised by the noble Lord, Lord Triesman, and others at Second Reading. The work that the Youth Futures Foundation is currently doing, for example, focuses on expanding the evidence base on what works and has the potential to influence the way an entire sector approaches programme delivery. In another example, Big Society Capital has had a clear success in levering more funds in to the social investment sector.
I have heard that your Lordships care about impact. I am also keen to ensure that the impact of the existing causes, as highlighted by the noble Baroness, Lady Kramer, and how far into their journey of achieving their missions the current organisations are, are taken into account. I stress that I raise these as illustrative examples of the types of conversations that should be had before determining which causes are not just good ones to support but the best causes for this unique type of funding. We need to get as much clarity as possible on how best to define future funding restrictions, to ensure that these funds achieve the greatest possible impact. It is, therefore, vital that we enable a public consultation to take place before making any changes or additions to the current uses of dormant assets funding in England.
We cannot commit at this stage to changing the recipients of this funding in primary legislation. This includes by referencing community wealth funds or financial education, as well as whether or not the National Lottery Community Fund should deliver them, as the amendment in the name of the noble Lord, Lord Bassam, proposes. Given this, it is also not the time to prescribe the distribution mechanism for how future funding might best be administered. While the Secretary of State already has the power to add or remove distribution bodies, the National Lottery Community Fund has fulfilled this role for the past decade and there are no plans to change this. It has access to an extensive network of delivery partners, and has well-established systems of governance, accountability and assurance in place. For these reasons, I am not able to accept these amendments.
I now turn to why Clause 29 should stand part of the Bill. This clause amends part of the mechanism for distributing dormant assets funding in England so that it aligns with the model used in the devolved Administrations. As the noble Lord, Lord Bassam, highlighted, it will provide the scheme with greater flexibility to respond to changing social and environmental needs in the future by enabling the Secretary of State to make an order restricting the purposes of dormant assets funding in England. The Committee has heard this afternoon about the genuine tension that exists between flexibility of funding and the longevity and visibility of it. We believe that the consultation will help us understand this.
The noble Baroness, Lady Kramer, asked me to specify the “winners and losers”. I hope very much that the winners of a consultation will be those that have the greatest impact from the use of the funds and which address issues that communities care about. Expansion of the scheme could unlock around £880 million more for good causes across the UK. In light of this sizeable amount, a changing social and environmental context in the wake of Covid-19, and public calls for input, it is right that we consider how to use this funding most effectively. Clause 29 enables us to do this while ensuring that these decisions have an appropriate degree of scrutiny.
As I have outlined further, the Government have committed to launching a public consultation on the social or environmental causes in England, provided this measure passes. The current restrictions will continue to apply until this consultation has been processed and an order is made. Any new restrictions will have to be approved by both Houses through the draft affirmative procedure.
This power will not affect the additionality principle: the distribution of dormant assets funds cannot be a substitute for government spending programmes. We will discuss this further as part of the debate on Amendment 60 from the noble Baronesses, Lady Kramer and Lady Bowles of Berkhamsted. With that, I ask noble Lords not to press their amendments and I commend that Clause 29 continues to stand part of the Bill.
I have received a request to speak after the Minister from the noble Lord, Lord Knight of Weymouth.
My Lords, I want to speak relatively briefly in support of my noble friend Lord Blunkett’s Amendment 56A. I find the procedure slightly odd—I am still trying to influence the Minister after she has asked for it to be withdrawn—but I will give it a good go.
The importance of financial education and financial literacy in primary education does not need too much arguing. I recall a friend of mine, Emily, who finished secondary with four A-levels about three or four years ago. She chose to become a successful actress rather than go to university. About six months after she started work—she got work very quickly—she was furious that her education system had not told her about taxation and that suddenly she had to put money aside to pay her taxes as a self-employed actress.
That reinforced for me that we have an education system that is really passive on this. I was delighted a couple of years ago, when I was working for a company called TES, to be involved with the Bank of England and the Beano on producing some financial literacy resources for primary schools, which were very well received. I also endorse the work of KickStart Money.
It has become particularly acute that we must do more in primary education because of the cashless nature of our transactions. According to a survey this month published by, I think, Yahoo, fewer than a quarter of transactions in this country are now paid with cash. Children no longer see and feel money exchanging hands. They are no longer adding it up and making sense of 1p, 2p, 5p, 20p, 50p, £1, £10 and so on because it is not part of what most of us handle any more. There are apps. My stepdaughter will be 10 tomorrow. We use an app for her called RoosterMoney, which helps her with some of these things. But there has been an impact for primary schoolchildren on their numeracy, their understanding of debt, and of how their school is paid for and how their teachers are paid, because it is taxation and public money. These are really important parts of citizenship.
While the noble Baroness, Lady Kramer, was talking I thought that, although the amendment is about resourcing financial literacy in primary schools, I had better quickly check the primary curriculum to see what is in it. There are two mentions of “financial”. One is in respect of what the curriculum requires years 5 and 6 to do in terms of spelling. The noble Baroness asked whether there is something horribly wrong in the Department for Education. It is so obsessed with things such as spelling in English that you have to learn how endings that sound like “shall” are spelled, as in “official”, “artificial” and “financial”. The only other mention is in the context of maths. It says that studying maths is a good idea and “necessary for financial literacy”, so it gets a slight mention but that is it. There is no real requirement, but there is a little bit of a nudge that there is a good reason for studying maths. We have to do better.
This amendment, and putting something in statute, would give some priority and send a positive signal from government that we should do more on this. It would be able to fund some of the teacher training that is important to give primary school teachers better confidence and competence around how to link this in to various parts of the curriculum, because it is not just in maths that you can teach financial literacy. Of course, it could fund more of those resources so that it is not just down to the Beano, the Bank of England, KickStart and others and we have some properly evidence-based resources that help teachers to link across the curriculum in an engaging and interesting way for primary school students.
I urge the Minister to reflect and perhaps have a chat with some of her colleagues in the Department for Education—particularly the Schools Minister, who is obsessed with spelling, punctuation, grammar and maths but, frankly, is not really that interested in very much else in terms of what is specified in the national curriculum. We could do better.
I thank the noble Lord for his remarks. I absolutely do not deny in any way the importance of financial education, but the issue here is not the importance of any individual cause. The challenge we are faced with—or the privilege that we will all have—is to contribute to a conversation about the right cause for this particular stream of money, with its unique features, and that includes the existing causes that are funded. We will be putting the cart before the horse if we focus too much on causes to go into the Bill; rather, we should put the combined intellect of your Lordships and others into making sure that we spend future moneys in the best way possible.
My Lords, I am grateful to all noble Lords who have taken part in this debate. I had better begin with an apology to the noble Baroness, Lady Barker, for not having name-checked her as a member of the committee. The truth is that I saw who signed their name to the amendment, but I did not see who was going to speak to it. That is an explanation, not an excuse. I know her as a doughty fighter, and I hope that she will accept this apology for not expressing my thanks to her.
She rightly drew attention to concerns about duplication and what we discussed in our committee about what we call “new initiative-itis”, where ideas are started by a Minister wishing to make a mark but they are abandoned after six months, whether they are good or bad is not followed through with and the institutional memory is never properly adjusted. I accept that. Indeed, I accept the caution from the noble Baroness, Lady Kramer, about future funds flow. She pointed out that this is not an endowment fund but a flow that stops flowing when the money is spent.
I share the point made by the noble Baroness, Lady Lister, that we need continuity. There is sufficient visibility over the next five or 10 years to be able to provide the financial continuity that both she and I see as an important part of the community wealth fund concept.
In response to the point made by the noble Baroness, Lady Barker, about duplication, some of the plan methodologies that we have seen from the Community Wealth Fund Alliance are distinctive and will provide a different approach that is not duplicated elsewhere. However, I accept the strictures of both noble Baronesses.
I am grateful to the noble Lord, Lord Bassam of Brighton, for his support. His suggestion of pilot studies as a means of beginning to build institutional memory was interesting.
I am also grateful for the support of the noble Lord, Lord Blunkett. Of course I accept his remarks about financial education. He and I have discussed many times the narrowness of the national curriculum, which fails to provide education in many of the most important parts of what makes a citizen an effective and worthwhile person knowing their rights and their responsibilities. Financial education surely must be a part of that.
Finally, the response of the Minister was, as ever, smooth and beguiling, and I am trying hard not to be beguiled. I think she said that the current drafting already implies what is made explicit by Amendment 54. Well, if the amendment makes it explicit, let us have the amendment, so that that is explicit, as opposed to relying on the interpretation of the words “at some date in the future”. I hope that my noble friend will come back to that and think a bit more about it, and also about the points that the noble Baroness, Lady Kramer, made.
On Amendment 55, the Minister said that consultation would begin as soon as the Bill becomes law. She referred later to the cart and the horse, and I have to say that that sounds like cart and horse to me because, essentially, Clause 29 throws all the cards up in the air, they will come down where they may, and the only way that your Lordships’ House, or indeed Parliament, will have to influence what happens after that will be by means of regulations. I fully accept that we will have a chance to look at them, but as has been said this afternoon, and as Members of the Committee know, they represent a lower level of scrutiny and of being able to amend what is proposed.
I understand the Minister’s reluctance to accept the amendment, and the weaknesses of the community wealth fund concept at this point in its history, but I hope that she will find time to reassure the people who are working hard in the Community Wealth Fund Alliance that the fact that the Government are reluctant to accept the amendments does not mean that they do not think it is a worthwhile concept. It is a worthwhile concept, and the Government ought to be finding ways—pilot schemes, as the noble Lord, Lord Bassam, suggested, and other ways—to encourage institutional memory and practice to develop in this area. Unlike the noble Baroness, Lady Barker, I think that the idea is distinctive, offers something that no other groups will offer and will be able to do so over a sufficiently long time to make it an attractive prospect in helping to rebuild our social capital. I hope that the Minister will think again about her remarks on Amendment 54. Let us make sure that we have absolute clarity about what can and cannot happen. In the meantime, I beg leave to withdraw the amendment.
Amendment 54 withdrawn.
Amendments 55 to 56A not moved.
57: Clause 29, page 21, line 24, at end insert—
“(aa) persons appearing to the Secretary of State to represent the interests of the charity sector,(ab) persons appearing to the Secretary of State to represent the interests of communities that—(i) have benefitted, or(ii) may reasonably expect to benefitfrom funding under the scheme, and”Member’s explanatory statement
This probing amendment seeks to understand the consultation process envisaged by the Government when it wishes to exercise powers under Clause 29. It proposes including representatives of charities and communities, as the main beneficiaries of the scheme.
It is a pleasure to speak to Amendment 57 in the name of my noble friend Lord Bassam. My comments will also refer to the themes drawn out through Amendments 58 and 59, which are also in this group. This group of amendments builds on some of the issues raised in the previous debate about how we ensure that the fund is utilised in way that provides a degree of predictability for the charitable sector.
Consultation needs to be meaningful, and it needs to be seen to be meaningful. It must secure the confidence of the relevant groups and communities as well as the wider public and meet the need to ensure that decisions are fully informed. That quality of involvement is something that my noble friend Lady Lister highlighted when she spoke on the previous group about the need to involve the relevant groups and communities.
As the Bill stands, if the Secretary of State wishes to change how the proceeds of dormant assets are distributed in England, the only body that needs to be consulted is the National Lottery Community Fund, although others can be added—but only those that the Secretary of State thinks appropriate. Amendment 57, therefore, is a straightforward but important text that seeks to ensure that the charities and communities likely to be most affected by any changes under the new delegated power are included in the decision-making process. I do not wish to pre-empt those who will speak to other amendments in this group, but I observe that there appears to be consensus that the current requirements are not sufficient to give confidence that due process will be followed. I know that the Minister has assured us in meetings that Cabinet Office guidelines will be respected but, unfortunately, there have been examples—not just under this Administration but under all Governments—where this has not been the case.
In the previous group, my noble friend Lord Bassam referred to the perceived risk that this fund could be politicised, much in the way that there are concerns that the future high streets fund appears to favour areas with Conservative Members of Parliament. Such fears may prove unfounded but it would be good, and would take away some of the scepticism, if the Government were prepared to go further on the consultation issue, as well as to provide a worked example of how this may all work in practice. I hope that the Minister will be amenable to these practical proposals. I beg to move.
My Lords, I am pleased to speak in support of these amendments, especially Amendment 59 in my name and Amendment 57, to which I have added my name.
With regard to Amendment 57, I was encouraged by the Minister’s response at Second Reading to concerns raised about the consultation process. However, given what she said and what is said in the fact sheet on the Bill, it seems very odd that the Bill itself suggests a narrower approach to consultation, restricted to
“the Big Lottery Fund, and … such other persons (if any) as the Secretary of State thinks appropriate.”
That “if any” implies that the Secretary of State could well consider that there are no other appropriate persons—not a good look to the outside world.
While it is reassuring to have a commitment to wider consultation on the record, it does not have the same force ultimately as the Bill itself, especially if we are looking to any consultation that might be required in future because of a new order under this clause. Would it not make sense to amend the Bill so that it reflects the Government’s actual intentions, thereby giving a clear signal that the Government would like to hear from a wide range of relevant voluntary organisations and community groups? I hope that the Minister will be able to give us a clearer idea of what is envisaged by way of consultation, but also that she will undertake to take the question away and see whether she cannot come back on Report with an amendment that better reflects the Government’s stated position than the rather forbidding wording of Clause 29(3).
I want to take this opportunity to refer back to the previous group and ask the Minister whether she can confirm that the idea of community wealth funds will be included in the consultation document. If it is not, only those who already know about the idea will be in a position to support it. This links back to what the noble Lord, Lord Hodgson, said about the Government sending a signal that they consider community wealth funds a worthwhile concept. The Minister again carefully avoided saying what the Government think about community wealth funds, so some kind of signal to all those voluntary organisations in the alliance that they look sympathetically on the idea would be helpful.
Amendment 59 reflects concerns expressed, in particular by the NCVO, that there should be adequate time for consultation. When I tabled the amendment, I must admit that I thought that 12 weeks was the normal recommended time period. It had recently been breached by the six-week consultation on the New Plan For Immigration so I wanted to be sure that it would not be breached in this instance. However, thanks to a note provided for me by the Library, I have discovered that, some time ago, the Government withdrew the guidance on a recommended 12-week period in favour of departmental discretion. Since then, there appears to have been a marked reduction in the typical time allowed for consultations.
The NCVO puts two main arguments as to why consultation on the use of dormant assets should last for a minimum of 12 weeks. First, it is important that the Government hear from a wide range of groups and communities, which may themselves need to consult their members and may not be used to responding to government consultations. The official guidance on consultation introduced in 2013 indicated that, when deciding on the timescale for a given consultation, the capacity of the groups being consulted to respond should be taken into consideration. Timeframes should be proportionate and realistic. This all points to a good amount of time to ensure that such groups have the time they need to respond, even though the most recent iteration of the guidance in fact gives very little guidance at all. I was not at the meeting where the Minister gave assurances about following Cabinet guidelines but I do not think that those guidelines take us very far.
Secondly, the decisions that will be taken on funding have relatively long-term implications, notwithstanding what the noble Baroness, Lady Kramer, said on the previous group, so it is important to take the time to listen and get the decisions right. I am sure the Minister will point out that it is not usual to specify a timescale for consultation in legislation, but in the face of increasingly vague official guidance, it may be necessary to specify it to ensure that the Government hear from all those they need to hear from. That said, I would welcome a clear commitment on the record from the Minister that the consultation will last at least 12 weeks.
My Lords, I put my name to Amendment 57. The essence of the case has already been well covered so I shall be brief, but brevity should not be taken as indicating that I do not attach considerable importance to this amendment.
The Committee will recall that, a couple of minutes ago when I was moving an earlier amendment, I emphasised the need for local views to be taken into account and the fact that, to be effective, “local” must mean precisely that. It is charities and voluntary groups, which are often quite small, that can speak most authoritatively about the needs of their local areas and communities, hence the first part of this amendment. It is obvious that the groups that are the likely recipients of funding under the scheme will have the most relevant first-hand experience or views about how the scheme is or should be operating.
There is a danger, of course. I fully accept that trying to discern what local communities really want is not always easy and may require particular effort. That is why there is a temptation to fall back on what I referred to a few minutes ago as gatekeepers. While many gatekeepers are absolutely fine, we need to ensure that those who are holding themselves out are sufficiently well plugged in to the detail.
In that connection, I re-emphasise the point I made—it was also made by the noble Baroness, Lady Lister, a minute ago—that the concept of community wealth funds are relatively unknown and therefore, to get a proper consultation on how they might work, the Government are going to have to do a bit of pitch rolling, if I may use a cricketing analogy, to ensure that the contributors to the consultation process have a full understanding of what they are being asked to respond about. Having said that, Amendment 57 seems likely to provide the objectives to be fulfilled, which is why it has my support.
My Lords, I welcome the noble Baroness, Lady Merron, as I think this is her first outing in a Grand Committee in the House of Lords, and she is basically doing it in a prison visitors’ set-up. We probably feel like that sometimes here. She made the absolutely key statement: that consultation needs to be meaningful. That certainly underpins everything that I have to say.
I am exceedingly troubled by the very narrow list of consultees in the Bill. The Minister talks about the public, but has felt it really important not to put public consultation in the legislation. We really need an understanding of why she is so determined that the public will not appear in that consultation list. Obviously a Secretary of State who thinks it appropriate can do so, but it is not inherently appropriate in the way that the Bill is drafted. That really is important and it needs to be justified.
The noble Baronesses, Lady Lister and Lady Merron, and the noble Lord, Lord Hodgson, talked about the importance of including charities more broadly. I would add social enterprises. The noble Lord also pointed out the significance of local views.
It may be that I am an old cynic but I deal with a lot of consultations, particularly in the finance sector—they tend to be HMRC or Treasury-driven—and I am extremely conscious that a handful of voices get listened to. They are the sort of recognised powerhouses, the usual suspects and whatever else. Everybody else might get a little answer to one particular point that they make but very rarely—in fact, never within the field that I have covered—have I seen anybody other than that central core of usual suspects have any significant impact on the outcome, and lead to a different approach as a consequence of the consultation. I am extremely troubled by the way in which all this is currently structured and by its essential identification of only one big usual suspect: the Big Lottery Fund. Frankly, it is not fair to the Big Lottery Fund to make it carry that full burden alone, in the way that has been done.
My Amendment 58, also signed by my noble friend Lady Barker, was tabled because I am spitting tacks generally at the way that there is no role for Parliament in these consultations. From the many exchanges I have had with HM Treasury I know that, when there is a consultation, regulators take exactly the same point of view: that any parliamentarian is welcome to write in. Well, first, you do not find many parliamentarians with the time to develop and do all that but, secondly, they are not among the usual suspects who ever get seriously considered. It is not worth the candle most of the time and I have no reason to think that any other department will be very different in its attitude.
The first time that parliamentarians will have any impact will thus be in the useless process of dealing with a statutory instrument that they cannot amend or kill. This seems fundamentally disrespectful to Parliament. In an area such as this, we are essentially looking at Parliament in many ways as the guardian of people’s money that they have somehow missed or lost, or whatever else, so it is even more important that there should be that much wider voice speaking.
In Amendment 58, which is slightly hopeful, I have popped in a requirement to engage directly with Parliament. This problem will have to be resolved because consultation is increasingly becoming the substitute for scrutiny and accountability. It is not designed to do that in the way that it is structured at the moment.
I will pick up the point made by the noble Baroness, Lady Lister. It is quite shocking that we do not even have a reliable framework now for a consultation: it is back to departmental discretion. That is not appropriate. It is highlighted again in the Bill and, for all these reasons, I find this very troubling. We need a justification from the Government on their approach to consultation, and the answer is not: “In this instance, we’ve decided to do something very broad and general, so be happy”. Why is it in no way captured within the legislation itself?
My Lords, Amendments 57, 58 and 59 put forward respectively in the names of the noble Lord, Lord Bassam, the noble Baronesses, Lady Kramer and Lady Barker, and the noble Baroness, Lady Lister, seek further commitment and clarity regarding Clause 29 and the statutory duty to consult. I thank the noble Baroness, Lady Merron, for setting out so clearly the importance of the consultation process: we concur absolutely with the spirit of her remarks and I hope that my remarks on the earlier group show quite how critical we see the consultation as being as part of the Bill.
The noble Baroness, Lady Lister, asked me to commit that a question about a community wealth fund will be in the consultation. We need a collective agreement on what goes into any consultation document, so I am unable to give her that reassurance today. Similarly, I hesitate to make any comment in relation to the specific community wealth fund initiative, however caveated in the way she suggests, because I do not want to give the impression that any decisions have been made before they have been. We are genuinely going into this consultation with the aim that I outlined on the earlier group; I hope she will accept that.
As noble Lords have noted, Clause 29 mirrors the approach for distributing funding that is already used in the devolved Administrations. In line with their process, the Secretary of State will consider who it is appropriate to consult and has committed to launching a full public consultation on the social and environmental causes in England, provided this measure passes. This will give the public and sector participants the opportunity to contribute their views before any change may be made to the current English causes. The devolved Administrations have similarly undertaken public consultations on the distribution of their portions before laying orders.
I will respond to the points raised by the noble Lord, Lord Bassam, and the noble Baronesses, Lady Kramer and Lady Merron. Making further specifications in this clause could imply that these stakeholders are more important than other groups which it might be equally appropriate to consult.
I turn to the amendment of the noble Baroness, Lady Lister, on the length of the consultation. It will be open for a proportionate amount of time to allow for considered and good-quality responses, and will be in line with Cabinet Office guidance. She will be aware that, in response to the challenges faced by many groups, but including small community organisations, we have extended the time period of consultations where necessary, particularly, most recently, during the pandemic. For the reasons I have set out, I am not able to accept these amendments and I ask that noble Lords do not press them.
My Lords, I have had one request to speak after the Minister, from the noble Baroness, Lady Lister of Burtersett.
I thank the Minister for, as usual, responding very fairly, but I have a number of questions. She said, and I understand why, that she cannot commit to including the community wealth funds in the consultation document, but will she at the very least commit to considering it when discussing what will go into the consultation after the Bill becomes law?
The Minister did not respond to my fundamental question—it was raised also by the noble Baroness, Lady Kramer—about the difference between what the Bill says about consultation and what she herself has said about it. I asked specifically whether she would take the matter away and have another look at it before Report. If the Government are committed to consulting community groups and so forth, why does the Bill not say so? It is sending out a very bad message if it stays like it is. I want to push her on that. Will she at least look at what has been said today and see whether the drafting of the Bill could not be improved? As has been pointed out, there has already been quite a large number of government amendments. This amendment would not change what the Government plan to do, but it would give a clear signal to the outside world that the consultation would, to use my noble friend’s word, be “meaningful”.
On the timescale, the Cabinet Office gives very little guidance now. Can the Minister at least confirm that she accepts that, given the kind of groups we want to hear from, “proportionate” points towards a longer rather than a shorter timescale for consultation?
I am happy to commit to consider the community wealth fund proposal as we review the range of questions that go into the consultation. I apologise to the noble Baroness: I thought I had answered her questions. The framing in the Bill mirrors that of the devolved Administrations, which is why it is drafted in the way that it is. The Secretary of State has said in public that there will be a full public consultation on the social and environmental causes—I have said it several times at the Dispatch Box—so that is a matter of record.
I thank the Minister for her response to the debate. I note that she acknowledged the importance of consultation and indicated that she concurred with the spirit of my remarks, which I welcome. However, I want to press the point raised by my noble friend Lady Lister about the need for the consultation to be meaningful, not just in how it is but in how it looks, how it feels and how it will work. My noble friend referred earlier to matters in the Bill being “not a good look”. I hope that the discussion today will support any changes the Minister might seek to make as we move along in the process to make the Bill, which is intrinsically good, “a good look” rather than to lose out by being in certain cases less than a good look. The quality of consultation is particularly important in that regard.
The Minister reiterated the point that the Secretary of State will decide who will be consulted and that a “proportionate amount of time” would be spent on the consultation. I believe that is all understood. However, the discussion today seeks to move us beyond that. The Minister’s argument sounds basically to be along the lines of we must trust the Secretary of State and be content with what is known as a “proportionate amount of time”. The point made so well by various noble Lords today is that perhaps it would be a better Bill if we were to be rather more focused and explicit about what we are offering, in terms both of timescale and of those who will be consulted.
I hope that the Minister will reflect on the thinking and consideration that has been given today. I thank noble Lords who have taken part in the discussion on this group, which has shone a light on the ways we could improve matters. I am sure that we will revisit this as we continue to consider the legislation. With that in mind, I beg leave to withdraw the amendment.
Amendment 57 withdrawn.
Amendments 58 and 59 not moved.
60: Clause 29, page 21, line 29, at end insert—
“(5) Any distribution of dormant assets money provided for under this section must be additional funding, and must not replace funds previously provided for by the Government.”Member’s explanatory statement
This amendment would require that any distribution of dormant assets money must be additional funding.
My Lords, the Grand Committee has certainly more than touched on the topic of additionality in previous groups of amendments, but I felt it was important to table a specific amendment. I am not at all precious about its wording; I just wanted to make sure that it got discussed directly.
From the beginning of the legislative process—even ahead of it, when she was kind enough to brief us—the Minister has spoken about the importance of the principle of additionality and reassured noble Lords that that principle would sit behind the dormant assets fund. I had a look to see where this is in the legislation. I am not the best comber of legislation so I would be delighted if the Minister were able to enlighten me if I have got it wrong. I can find a reference to additionality in the statues of the Big Lottery Fund; I can find it again in the 2019-22 management agreement between DCMS and the Big Lottery Fund. However, in the 2008 Act, which is entirely consistent with those two items, I only found it in the reporting and accounts requirements in part 3 of Schedule 3, which says:
“The report shall set out the Fund’s policy and practice in relation to the principle that dormant account money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by … a Government department”
and the various devolved Administrations. Have I missed something? I cannot read anywhere that it is a requirement on the department or the Government to ensure that the structure is such that additionality is a fundamental principle. Have I missed it? Is it somewhere in the legislation and I have gone past it? If I have, I am very willing, and will be quite relieved, to be corrected.
The Bill in front of the Committee will allow other organisations to become major distributors, not just the Big Lottery Fund. Is the additionality principle particular for that fund? Will it be applied to other distributors? It seems that the issue is not discussed in any way. I am used to legislation in which, basically, Parliament empowers and instructs the Government to adhere to certain principles, and I cannot see that it is in here. If somebody can help me with that, I would be very grateful. As I have just described, the principle also has a sting in it. As I quoted before, it is
“to fund projects, or aspects of projects, for which funds would be unlikely to be made available by”
the Government. One can see the temptation to blur lines.
We had some discussion of this earlier: funding for local government services, particularly youth services, has been absolutely slashed not just to the bone but frankly beyond it after the past few years. Just this week we had some horrifying examples: for example, media reports that the number of black teenagers murdered in London is at an all-time high. Part of that problem is ascribed to the destruction and closure of so many youth programmes, while the Commons Education Select Committee reported on Tuesday on the inadequacy of education for white working-class youngsters. As a consequence of this, you would say that the Government are unlikely to fund these kinds of issues. It is unlikely that the Government will fund youth services or take actions that would change the educational prospects of these groups of children. Does that mean that additionality is suddenly using charitable funds to provide what I suspect most of us would regard as fundamental core services?
I am quite troubled by the definition in and of itself. I suppose the Committee saw that echoed in the way I reacted to the proposal from the noble Lord, Lord Blunkett, to use money for financial capability education at primary level. It is absolutely crucial that financial capability education should happen, and it must. I echo all the comments on that, but is that really the job of a charity or of the Government? At what point does it become additionality and at what point is it core? This is very blurred.
The other thing that troubled me—again, I might be wrong and hope that the Minister can correct me—was that, when I looked at the various review proposals for the dormant assets scheme, I could not see where there will be a discussion of additionality. Just as there was no discussion of the impact, there was none of additionality either. I am quite concerned to understand how all this will work together and how we can genuinely give confidence to those who are the true owners of these funds, even if they do not know it, that their money will not be used as a substitute for taxes and public spending. It is to provide something additional and highly desirable, but that it would not be appropriate for a Government to fund. I beg to move.
My Lords, as relatively few of us are speaking on this group, I follow straight on from my noble friend Lady Kramer. Unsurprisingly, I agree with everything she said. She has been putting her finger on quite a few weaknesses and gaps that appear in the Bill. We are all concerned to make sure that the money available does additional good work. It should not be used as an excuse by the Government to put in less than they would have otherwise, so that they do not take it into account by thinking they do not have to do quite so much because a top-up might come along from the dormant assets fund.
On that point, I am also curious as to what “unlikely to be made available by Government” means. It is hard to free one’s mind from the concern that the Government will somehow take account of this pool of money as a back-up, no matter what they say. Indeed, on Monday my noble friend referenced the money put in for Covid purposes and said that it was muddying the waters. The fact that the Government are prepared to recite it altogether means that they are taking it into account in some kind of bigger picture. It is hard to escape that point of view. The last thing we want is for there to be a pattern of cuts, followed by replacement funding.
In debate on the first group of amendments, the Minister said that the funding was intended to achieve maximum impact. That really means that it has to be doing things that would not otherwise be done or things that were previously being done, but from which the Government have decided they can withdraw. I am not saying that it cannot be used for that in extremis if the need is so great, but that cannot be the pattern that we allow. As my noble friend said, it would essentially mean that the money was in one way or another replacing taxation.
We debated this on Monday and, as my noble friend Lady Kramer also said, we have talked about reports and reviews. It is important to show how the money has been spent, and to show additionality—in other words, to show that there is clear water between the use of the funds and what the Government do. Perhaps this is a bit of a conflation of ideas but if things like community wealth funds might be going in at a different level, it could mean that they were more isolated from the risk of becoming replacement funding, in places where the Government have pulled out. This would be new funding.
We need something more in the Bill, unless the Minister can explain categorically that that idea is there. She may make statements about how the spending will be used but it would also be good, in the context of a review clause, to ensure that there is a review to find out whether things have actually happened that way, regardless of the original intention.
My Lords, we are grateful to the noble Baroness, Lady Kramer, for tabling Amendment 60, which touches on an issue raised by many on Second Reading. I thought I heard the Minister, who has been extremely courteous throughout these proceedings, mention the Government’s intention to treat funds from dormant assets as additional to what is distributed through the other distributing bodies fed from the National Lottery.
The inclusion and identification of new dormant asset proceeds is welcome. I acknowledge the earlier commitment that these funds will remain additional, rather than replacing other types of financial help; that is extremely important. The noble Baroness, Lady Kramer, has laid out the case well. There is consensus that we do not want funding of this nature to be replacement funding for mainstream government financing programmes.
If it is really the Government’s intention that this money should be used on top of other funding sources, I ask the basic, simple and fundamental question: where is the harm in the Government accepting this amendment? If they did, there would be a clear statement of policy intent, giving a clear direction on the face of the Bill. If the Minister says that the Government cannot do so, I shall be extraordinarily disappointed. However, I would be more than happy to work with colleagues across the House on this—and with the Government themselves, if they are not content to accept the amendment—to bring forward an alternative to the text in this amendment on Report. There probably is consensus that that would be the right thing to do.
Another important factor to bear in mind is that dormant asset funding will grow only as we find new dormant assets that can be used for charitable purposes. In no way should they be seen as an alternative source of funding, replacing government mainstream funding. For that reason, it would be right to put a commitment in the Bill, as a statement of principle, so I am more than happy to support the noble Baroness’s amendment.
My Lords, as we have heard, Amendment 60 in the names of the noble Baronesses, Lady Kramer and Lady Bowles of Berkhamsted, seeks to confirm the principle of additionality. As I noted at Second Reading and during Monday’s debate, and as the noble Baroness, Lady Kramer, also noted, the principle of additionality is set out in Schedule 3 to the 2008 Act and will continue to be a core principle of the scheme. The Act describes additionality as
“the principle that dormant account money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by … a Government department”
or devolved Administration. The Bill does not alter the part of the 2008 Act in which the principle is defined, which affects all of the UK as opposed to just England.
The noble Baroness, Lady Kramer, asked to whom the principle applies. It applies to the National Lottery Community Fund, as she rightly said, not the Secretary of State in DCMS. That is because the National Lottery Community Fund is the main distributor of the funding and the accounting officer for the dormant asset funds, so there is also a read-through to the spend organisations on additionality, which I think was implicit in her remarks.
I absolutely respect the noble Baronesses’ and other noble Lords’ wish to get real clarity on what we mean by this principle but I hope that noble Lords will, on reflection, agree that the current definition gives a useful degree of flexibility. At one end of the spectrum, there are social and environmental causes that are clearly for government to fund, but, as the Covid pandemic has shown, there are areas in the economy that most of us would never have expected to receive government funding that have now received it, for example the furlough scheme. So we have flexibility depending on pandemics and other economic circumstances on where government funds, and that is well captured in the definition as we have it.
I propose to provide a couple of example of how the additionality principle has worked to date. I do not intend to be comprehensive but to show how it has worked in practice because I think that concern that it could in some way be departed from was behind a number of your Lordships’ comments, and I hope to reassure them that that is absolutely not the case.
The most obvious example of the principle is that it allows the scheme to fund something that would normally be seen as outside the scope of government intervention. A good example of that was the creation of the world’s first social investment wholesaler, Big Society Capital, which used a combination of dormant assets and leveraged private co-investment to make it happen. As another example, the principle of additionality could enable dormant assets funding to test interventions and gather evidence that could then be used as a model for other funders. For example, Big Society Capital and its associated fund managers have worked for a long time on homelessness using innovative social investment.
Similarly, as I mentioned earlier, the Youth Futures Foundation is focused on becoming the leading “what works” organisation on tackling youth employment. The foundation will have directed £40 million towards funding and evaluating the largest range of youth employment interventions ever initiated in England. When those findings are applied in practice, that should allow existing and new funding in this area to be spent more effectively. To recap, in response to the request of the noble Lord, Lord Bassam, that we accept this amendment, there are two reasons why we feel we really cannot. One is that the principle of additionality is clearly in the Bill and has been part of the existing Act. Secondly, the implementation since the original Bill became law, has clearly respected all the issues that noble Lords have raised today. For these reasons, I am not able to accept the amendment and I ask the noble Baroness to withdraw it.
I have no requests to speak after the Minister, so I call the mover, the noble Baroness, Lady Kramer.
I am grateful to everybody who has spoken. Obviously, the Minister is trying to give me some reassurance, but it has not taken me all the way, I have to confess. Although the additionality principle is in the Bill, it is there only in the context of shaping the work of the Big Lottery Fund; it is not there in the shape of a fundamental principle that applies, necessarily, if the Big Lottery Fund were to become one of several bodies managing distribution, for example, or if there were to be a different route for distribution. It is not sitting at that fundamental level; it is sitting at least one arm’s length away. So, I continue to have that concern.
I fully accept that the Minister has given some very good examples of additionality, but if she would care to look again at the GOV.UK website, to which I drew her attention when we were discussing some of these issues earlier in the week, it is a stretch to imagine that the additionality principle is applying to the £150 million from dormant bank and building society accounts involved in providing support to charities as a consequence of the Covid epidemic. Indeed, the way the Government discuss it—running it in with their own £750 million of additional funding—makes it very clear that they see this as a single programme, and express themselves very naturally and honestly in that way. There is a real question: do we say, “In extremis, forget the additionality principle”, in which case that ought to be acknowledged up front? Or do we say, “It’s always been a fairly weak principle and rather blurred; we have some good examples, but it is not something we are really going to press”? A lot of understanding needs to come from that.
When we go through a new Act, of course, Covid is at the front of our minds now, but I very much hope that in a matter of time it will not be and we will be back to normal procedures. We really need to know how the Bill will operate when it becomes an Act, because it will continue into that future period. So, I raised the issue of additionality and I think we could use some better answers. I absolutely still do not understand why it is not written in such a way that it applies to the government department’s actions. That is just beyond me, because I have certainly seen the Government draft similar constraints for other government departments in other areas, and I have certainly seen them accept amendments that do the same kind of thing. It just strikes me as a bit peculiar to see the way it has been handled here. I think all of us are concerned that it should be a tight ship and not a leaky one. Saying all that, I will, of course, withdraw my amendment.
Amendment 60 withdrawn.
Clause 29 agreed.
Amendments 61 to 63 not moved.
64: After Clause 29, insert the following new Clause—
“Eligible recipients of dormant assets funds
(1) The Dormant Bank and Building Society Accounts Act 2008 is amended as follows.(2) In section 16(1), at end insert “to social enterprises and charities”.(3) In section 16(3), at end insert “to social enterprises and charities or to a body that will make grants or loans, or make or enter other arrangements for the purposes of complying with subsection (1), with social enterprises and charities”.Member’s explanatory statement
This amendment would mean that all the holders of funds would have to be registered social enterprises and charities and that any bodies that received funding would have in turn to work with social enterprises and charities.
My Lords, I declare an interest as a member of the All-Party Parliamentary Group on Social Enterprise, at whose recent AGM I had the pleasure of listening to the Minister address the subject that we are coming to now. I admit that one of the reasons why I wanted to table this amendment was that, up until approximately an hour ago, the Committee had had very little discussion on social enterprises. We had, naturally, tended to focus on community groups and voluntary sector organisations and that is the trouble; social enterprises are always getting lost in discussions such as this. They also get lost when we come to talk about industrial strategy and so on. I wanted to focus some attention back on them because the dormant assets funding that has been released so far into the Big Society Capital fund and the Access foundation has been really important. It has helped more than 5,000 social enterprises since 2010, dormant assets worth £460 million have been put through social investment, and it has directly supported more than 1,500 organisations. It will be pleasing to some noble Lords that the vast majority—82%—of those organisations have been outside London, so the investment has been going into communities which are, by definition, less wealthy.
Social Enterprise UK, whose chair is the noble Lord, Lord Adebowale, is currently investigating the impact of that, but we know that it is still difficult for social enterprises to access finance and that access to what finance exists is uneven. There is a particular deficiency in support for some minority ethnic organisations. It has always been the case that women and people from minority communities in any walk of life or business have had more difficulty than others in accessing capital. The biggest problem has been access to what is known as patient risk capital—long-term investments—for social enterprises. Dormant assets are exactly what would work for that.
That is the background to my amendment, which seeks to do two things. One is to limit the beneficiaries of the dormant assets scheme to charities and social enterprises. The reason for this is that, as the primary purpose of this legislation moves away from Parliament and down through departments, and given the experience of a year ago, when we watched the Government scrabbling to find money down the back of departmental sofas to put towards the voluntary and community sector, there is a feeling out there that we have to protect these funds from temporary political exigencies. We particularly need to protect against the creation of new vehicles, some of which may be companies, in an attempt to deliver the agreed main outputs of this fund.
Secondly, my amendment would limit the distributing bodies to being charities or social enterprises. We have already seen the emergence into that field of one entity which is not a charity or social enterprise. My noble friend Lady Kramer, who comes from the banking profession, has in previous discussions noted that if colleagues in her former profession were to see a profitable avenue to go down, they might well develop a new arm to do that. In the scope of banking it is not a massive amount of money, but we are talking about billions of pounds of assets.
It is for those reasons that I have tabled this amendment, and it is those issues that I wish to test in discussion. I therefore beg to move.
My Lords, I shall be brief, because my noble friend Lady Barker has basically laid out the case. I suspect that it was thought a given by everybody in 2008 that the money would go to charities and social enterprises; it probably never occurred to them to do anything else. We live in a much more varied world these days, so it would seem to make sense to add the clarity which the amendment seeks.
When we considered some of the amendments on who should be consulted, they talked about charities. There is a tendency to forget the social enterprise sector and the crucial role it plays. It is a rapidly growing role. I was stunned to learn of the findings of a survey recently conducted by Social Enterprise UK to work out the size of its sector. It started off with the assumption that it was a sector of around £24 billion and discovered that it was one of around £60 billion. An awful lot gets missed and somehow goes under the radar. We need to make sure that attention is appropriately drawn. The amendment is successful in doing that.
As we move into the post-Covid world, we will need to pull all the good levers that we have. That means the social enterprise lever as well as the charitable lever. Making sure that the language matches the reality strikes me as significant and useful. I hope that the points that my noble friend has made will be taken on board. Sometimes it is important to make things explicit, particularly in legislation. I cannot think that it constrains the Government in any way that they would find unacceptable, but it may ring the bell of DCMS when it does the consultation to think, “One of the usual suspects we need to go and listen to is going to be in the social enterprise world; it won’t just be in the big charities world”. Sometimes, we have to do something to make sure those messages get through.
Although the amendment forms a different group, it certainly speaks to a number of the issues raised in previous debates over the past few days in Grand Committee. I am glad that the amendment is before us, because it shines a light on something very important in respect of social enterprises.
At Second Reading, I recall the noble Baroness, Lady Barker, raising several concerns about the Government’s approach to the dormant assets scheme, including about the long-term viability of projects and whether enough is being done to support social enterprises. She has just restated those concerns. Social enterprises are a crucial part of our economy, as they bring together those dual goals in respect of business but also social in a particular way that enhances our communities.
For me, this amendment pitches concerns that we have heard previously, but in a different way. Those who have spoken in the debate have raised, as I know the Minister will have heard, interesting points and questions on this theme. I hope these will be fully addressed. In many ways, the amendment reflects our overall consideration of the Bill. As we have stated previously, we support the principle and want to support the text but to do so, we need to work together to address some of the unresolved concerns. I hope that the Minister and her officials will approach such discussions in a constructive spirit. On behalf of the Opposition, we look forward to working with colleagues on all sides of the House to ensure that, one way or another, an improved Bill is received by the Commons.
My Lords, Amendment 64, in the name of the noble Baroness, Lady Barker, proposes that all dormant assets funding must be distributed to registered charities or social enterprises. If I may, I will remind the Committee that there are two parts to the process of distributing dormant assets funding in England. First, the National Lottery Community Fund distributes funding to four independent, specialist spend organisations, which focus on one of the three causes currently specified in the 2008 Act. Secondly, the spend organisations themselves distribute funding to beneficiaries to deliver initiatives, in line with their respective objectives.
As your Lordships are aware, as independent organisations, the spend organisations are empowered to determine the best way to deliver long-term interventions to tackle youth unemployment, to increase the financial well-being of people in vulnerable circumstances and to grow the UK’s social investment market. This focus on creating systems change at scale is a major driver behind the scheme’s success to date. The unique flexibility that the scheme offers enables the money to be deployed innovatively and, as a result of this innovation, some of the bodies that distribute the funding do not happen to be registered charities or social enterprises themselves.
I have heard the emphasis that your Lordships have placed on ensuring the maximum impact of the scheme. Given the social and environmental focus required of the funding, as I have said in previous debates and in evidence to the committee which the noble Baroness, Lady Barker, referred to, it is hard to imagine that charities and social enterprises will not continue to be key partners in maximising this impact. I echo the comments of all the noble Baronesses who spoke on this group: I, too, absolutely recognise the important value of social enterprises. I have been working with a number of them, particularly in relation to implementing the social value Act and the important role that they can play in delivering government contracts in future.
However, organisations deliver impact on a spectrum. Impact-driven charities and social enterprises are an integral and important part of this spectrum, but we should not exclude mission-locked and mission-focused organisations that may differ in legal status. This is particularly so in light of the diversity of mission-locked organisations—many of which are led by individuals from black or other minority communities, which I know is an issue that the noble Baroness, Lady Barker, referred to and sees as important.
Organisations that can deliver impacts which meet the objectives of the scheme should be able to do so; this should not be limited in terms of legal form or status, through primary legislation or otherwise. As I noted earlier this afternoon, it is imperative that we afford the public and our voluntary industry participants the opportunity to have a say in how future funding in England is distributed. Making changes to the recipients of this funding without first consulting would risk the legacy of the scheme that I know we all wish to see expanded and thriving. For these reasons, I am not able to accept this amendment and therefore hope that the noble Baroness will see fit to withdraw it.
I have received no requests to speak after the Minister, so I call the noble Baroness, Lady Barker.
I thank all noble Lords who spoke in support of my amendment, in particular the noble Baroness, Lady Merron. I thank the Minister for her considered reply. I hope she will understand that we have agreed from the outset of our discussions that there is an overall consensus about the benefit of the scheme and the Government’s intentions to take the existing scheme, grow it and make it work efficiently and effectively.
However, throughout our discussions the Minister will have picked up from all Benches a not inconsiderable degree of concern about the way the scheme is moving away from the initial primary legislation into secondary legislation, and the considerable powers of Ministers to change fairly fundamental aspects of it without further scrutiny. Although she was complimentary and supportive of voluntary organisations and social enterprises in her response, as I fully expected she would be, she still left the door open for for-profit companies to take over aspects of the scheme without any limitation. I worry about that. It is a real concern, particularly given the way parliamentary scrutiny is being watered down by the concept of the Bill.
I heard what the Minister said on this matter, but I am not reassured and I reserve my position for later stages, because there is something deficient about leaving the door open for the growth of non-charitable and non-social enterprise players in the distribution of this money. However, I heard what she said. We have come to the end of our discussions today and I thank her very much for the answer she gave. Therefore, for the moment, I beg leave to withdraw the amendment.
Amendment 64 withdrawn.
Amendment 65 not moved.
Clauses 30 to 33 agreed.
Schedule 1: Minor and Consequential Amendments
Amendments 66 to 72
66: Schedule 1, page 24, line 7, at end insert—
“Financial Services and Markets Act 2000 (c. 8)
1A_(1) Part 24 of FSMA 2000 (insolvency) is amended as follows.(2) In section 359 (administration order), in the definition of “authorised reclaim fund” in subsection (4), for the words from “means” to the end substitute “has the same meaning as in the Dormant Assets Acts 2008 to 2021 (see section 26 of the Dormant Assets Act 2021);”.(3) In section 369A (reclaim funds: service of petition etc on FCA and PRA), in subsection (3) for the words from “means” to the end substitute “has the same meaning as in the Dormant Assets Acts 2008 to 2021 (see section 26 of the Dormant Assets Act 2021)”. Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544)
1B_(1) Article 63N of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (activities of reclaim funds) is amended as follows.(2) In paragraph (1)—(a) in sub-paragraph (b) for “account” substitute “assets”, and(b) after sub-paragraph (b) insert “;(c) dealing with unwanted asset money.”(3) In paragraph (2)—(a) omit the first entry;(b) after that entry insert—““dealing with unwanted asset money” means—(a) the acceptance of transfers of amounts as mentioned in section 21(2)(b) of the Dormant Assets Act 2021, and(b) dealing with those funds (so far as they are not needed for either of the purposes mentioned in section 5(1)(c)(ii) or (iii) of the Dormant Bank and Building Society Accounts Act 2008) with a view to their transfer to the body or bodies for the time being specified in section 16 of the Dormant Bank and Building Society Accounts Act 2008;”;(c) in the second entry, for ““dormant account funds”” substitute ““dormant assets funds”, “reclaim fund””;(d) in the third entry for the words from the beginning to “the management” substitute—““management of dormant assets funds” means—(a) the acceptance of transfers of amounts as mentioned in section 1(1)(a) or 2(1)(a) of the Dormant Bank and Building Society Accounts Act 2008 or 2(1)(a), 5(1)(a), 8(1)(a), 12(1)(a) or 14(1)(a) of the Dormant Assets Act 2021,(b) ”;(e) at the end of that entry insert “, and(c) dealing with those funds with a view to the transfer of amounts to the body or bodies for the time being specified in section 16 of the Dormant Bank and Building Society Accounts Act 2008.””Member’s explanatory statement
This amendment would insert a paragraph 1A (making two consequential amendments to references in the Financial Services and Markets Act 2000 to an authorised reclaim fund) and a paragraph 1B (amending the Regulated Activities Order to ensure it reflects the wider activities of a reclaim fund provided for by the Bill).
67: Schedule 1, page 24, line 18, at end insert—
“3A_(1) In section 1 (transfer of balances to reclaim fund), after subsection (2) insert—“(2A) A transfer of the balance of a dormant account as mentioned in subsection (1) does not itself—(a) constitute a breach of trust or fiduciary duty affecting the balance, or(b) give rise to any other liability of any kind (whether against the transferring bank or building society, the reclaim fund or any other person involved), other than the liability of the reclaim fund arising by virtue of subsection (2)(b).”(2) The amendment made by sub-paragraph (1) does not apply in relation to a transfer made before it comes into force.”Member’s explanatory statement
This would make provision in section 1 of the Dormant Bank and Building Society Accounts Act 2008 corresponding to Clause 17(1) of the Bill.
68: Schedule 1, page 25, line 4, after “transfer” insert “to the body or bodies for the time being specified in section 16(1)”
Member’s explanatory statement
This would clarify that a transfer in pursuance of section 5(1)(ca) of the Dormant Bank and Building Societies Act 2008 (as inserted by paragraph 5(2)(c) of Schedule 1 to the Bill) is to be made to the body or bodies specified in section 16(1) of the 2008 Act.
69: Schedule 1, page 25, line 6, leave out from “2021” to end of line 7 and insert “, except in so far as any of it is needed for the purpose mentioned in paragraph (c)(ii) or (iii);”
Member’s explanatory statement
This would ensure that unwanted assets money does not have to be transferred to the body or bodies specified in section 16(1) to the extent that the reclaim fund needs to retain any of it to meet regulatory solvency requirements or to use it to meet relevant expenses.
70: Schedule 1, page 25, line 9, leave out from “(7)” to end of line 10
Member’s explanatory statement
This would remove an unnecessary reference to the deduction of expenses, so that section 5(1)(cb) as inserted by paragraph 5(2)(c) of Schedule 1 to the Bill is consistent with section 2A(7) as inserted by Clause 20.
71: Schedule 1, page 25, line 22, after “5(2)(b)” insert “or (3)(b)”
Member’s explanatory statement
This would amend the definition of “repayment claims” in section 5(6) of the Dormant Bank and Building Society Accounts Act 2008 so that it covers claims arising by virtue of Clause 5(3)(b) as well as those arising by virtue of Clause 5(2)(b).
72: Schedule 1, page 26, line 46, after “5(2)(b)” insert “or (3)(b)”
Member’s explanatory statement
This would amend paragraph 3(2)(a) of Schedule 1 to the Dormant Bank and Building Society Accounts Act 2008 so that it refers to Clause 5(3)(b) as well as Clause 5(2)(b).
Amendments 66 to 72 agreed.
Schedule 1, as amended, agreed.
Schedule 2: Index of Defined Expressions
Amendments 73 to 77
73: Schedule 2, page 28, line 27, leave out “10(6)” and insert “9(5)”
Member’s explanatory statement
This would correct an erroneous cross-reference.
74: Schedule 2, page 28, line 34, after “share” insert “(in sections 14 to 16)”
Member’s explanatory statement
This amendment is consequential on the government amendment to Clause 14(3) at page 12, line 26.
75: Schedule 2, page 29, leave out lines 2 to 6
Member’s explanatory statement
This amendment is consequential on the government amendments to Clause 9.
76: Schedule 2, page 29, line 7, after “company” insert “(in sections 14 to 16)”
Member’s explanatory statement
This amendment is consequential on the government amendment to Clause 14(3) at page 12, line 26.
77: Schedule 2, page 29, leave out line 10 and insert—
“umbrella company sub-fund umbrella co-ownership scheme sub-fund umbrella unit trust scheme sub-fund section 9(6)(b) and (7) section 9(6)(c) and (7) section 9(6)(d) and (7)”
“umbrella company sub-fund
umbrella co-ownership scheme sub-fund
umbrella unit trust scheme sub-fund
section 9(6)(b) and (7)
section 9(6)(c) and (7)
section 9(6)(d) and (7)”
This amendment is consequential on the government amendments to Clause 9.
Amendments 73 to 77 agreed.
Schedule 2, as amended, agreed.
Bill reported with amendments.
Committee adjourned at 4.54 pm.