Hundreds of charities and social enterprises are set to receive £31m via the dormant assets scheme, the Department for Culture, Media and Sport (DCMS) has announced.
Some £20m will be distributed this year to help charities and social enterprises improve the energy efficiency premises with cleaner and greener energy systems, such as new boilers or heat pumps, solar panels, and new lighting.
Some £12m of this will be distributed by social investors Access, with £8m allocated by Big Society Capital (BSC).
A further £11m also distributed by BSC will be given in blended finance for voluntary, community, and social enterprise organisations (VCSEs) with services which will help people impacted by the cost of living.
An additional £45m will be distributed by Fair4All Finance through no-interest loans for 69,000 individuals struggling with finances.
The announcement comes after a public consultation last summer which aimed to determine how the next tranche of dormant assets, worth £880m, should be spent.
Community wealth funds consultation
DCMS also announced that it would open a consultation on distributing dormant assets through community wealth funds shortly.
Currently, no money can flow to a community wealth fund until this cause has been set in secondary legislation, as current legislation only permits the English portion of funding to be spent on youth, financial inclusion, and social investment wholesalers. DCMS said secondary legislation will be laid as soon as the parliamentary timetable allows.
No decisions have been made on how much funding will be awarded to a community wealth fund, or which organisations will deliver it.
Civil society minister Stuart Andrew said that “the creation of community wealth funds will give local residents in some of the more deprived areas of the country the power to improve where they live and invest in what’s important to them”.
David Knott, chief executive of the National Lottery Community Fund, said: “As the distributor of dormant assets, NLCF sees first-hand the life-changing difference this funding makes. I welcome the government’s plans to include community wealth funds alongside existing causes. This reflects NLCF’s experience of funding and supporting communities over decades. I look forward to turbocharging efforts through this expansion.”
Seb Elsworth, chief executive of Access, said he was pleased to see the addition of community wealth funds to the existing causes, which are needed to “support communities in different ways”.
“Further allocations of dormant assets will expand this investment and drive support to communities that have not benefited to date, including places and communities not well served by mainstream finance. This could and should include taking approaches that build on tried and tested mechanisms such as enterprise grants, business support and non-profit community lending.”
Dormant assets are financial products that have not been used by the customer for several years, with the provider unable to reunite them with their funds. Customers have the right to reclaim their assets at any point.
Editor’s note: The article and headline were amended after DCMS provided further information on the £31m of funding in the spring budget.
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