Memorandum submitted by the National Council
for Voluntary Organisations (NCVO)
1 INTRODUCTION
1.1 NCVO is the largest general membership
body for charities and voluntary organisations in England. NCVO
has sister councils in Wales, Scotland and Northern Ireland. Established
in 1919, NCVO gives voice to over 4,900 organisations. Nearly
3,000 of our members are local organisations, and over 3,600 of
our members have an income of less than £500,000. NCVO champions
voluntary action, our vision is of a society in which people are
inspired to make a positive difference to their communities. A
vibrant voluntary and community sector deserves a strong voice
and the best support. NCVO works to provide that support and voice.
1.2 NCVO welcomes the opportunity to submit
written evidence to the Treasury Committee's inquiry into unclaimed
assets within the financial system. NCVO has long called for the
transfer of unclaimed assets from financial institutions to reinvestment
in society. In our 2005 general election manifesto, Independence,
Diversity, Voice, we called for money released from unclaimed
assets to be fairly distributed across the whole of the voluntary
and community sector and used to support a broad range of activities
and causes.
2 DEFINITION,
IDENTIFICATION AND
COLLECTION OF
UNCLAIMED ASSETS
2.1 The priority remains to reunite these
assets with their owners. It is only when this cannot be achieved
that they should be reinvested in society. We welcome confirmation
in the 2006 Pre-Budget Report that government and the banking
industry also see this as their priority and will put a comprehensive
reuniting scheme in place. Robust measures should be put in place
to ensure that individuals and organisations are always able to
reclaim their assets irrespective of how much time has elapsed.
This will be particularly important to maintain public trust and
confidence in those organisations and vehicles who receive funding
from these assets.
2.2 We welcome the definition of an unclaimed
asset set out in the 2005 Pre-Budget Report. This indicated that
bank accounts which have had no customer activity for fifteen
years will be deemed unclaimed assets. We note that others have
called for a wider definition. In order to maintain trust and
confidence, we support the definition agreed upon in the short
term. However, this definition may benefit from a review once
a scheme to reinvest unclaimed assets has been in operation for
a reasonable period of time. It may therefore be appropriate to
review the definition after a scheme has been in operation for
five years.
3 THE DISTRIBUTION
AND USE
OF UNCLAIMED
ASSETS
3.1 NCVO's main concern is to ensure that
resources from unclaimed assets are invested according to principles
and methods which maximise the impact that they can have on communities,
including through the work of voluntary and community organisations.
We therefore believe that the following principles should be upheld
in any future transfer of unclaimed assets for investment in society:
— Reunification—Robust measures
should be put in place to locate owners of unclaimed assets, and
to ensure that individuals and organisations are always able to
reclaim their assets irrespective of how much time has elapsed.
This must be accompanied by appropriate publicity and communication
strategies.
— Independence—Where these assets
remain unclaimed, they should be reinvested in society. However,
these funds do not derive from the government, the financial institutions
holding the assets or from the third sector. Priorities for funding
must therefore be determined independently, in consultation with
a range of stakeholders including the voluntary and community
sector. Given the public nature of these funds, it may be appropriate
for distributors to be accountable to Parliament.
— Sustainability—these funds
must be designed to achieve long-term change and lasting benefits
for communities. Funding should therefore be distributed and designed
in ways which promote sustainability.
— Responsive—if these funds are
to make a genuine difference to communities and to the lives of
citizens, they must be responsive to genuine needs and priorities
and consider working with those organisations best placed to identify
these needs. In particular, measures must be put in place to ensure
that this funding responds to actual, rather than perceived, need.
This may also help to ensure that funding supports a breadth of
causes and organisations.
3.2 The nature and value of these funds
means that they must be distributed with due consideration of
other forms of social investment. It is also important to situate
these assets within the current funding climate for the voluntary
and community sector. We believe that there are a number of key
issues to consider in determining mechanisms for distributing
unclaimed assets:
— Existing market—the estimated
value of these funds means they are likely to have a significant
impact on the existing market for social and community investment.
It will therefore be important to ensure both that these funds
do not displace existing and emerging funders and investors, and
that distribution is conducted via intermediaries where possible.
In particular, those responsible for distributing unclaimed assets
should draw on the expertise of those funders who are able to
identify local needs and priorities and work with all funders
to ensure collaboration, rather than duplication.
— Variety of funding tools—These
funds should consider the different funding tools needed by different
organisations for different activities. For example, there may
be a need to consider innovation funding for organisations that
wish to expand their existing services or develop an existing
idea, or to consider a capacity-building grant to support a VCO
to engage users more effectively. Crucially, third sector organisations
need access to the full range of funding options, including grants
in aid, project funding, contracting and social investment if
they are to be able to make a tangible and sustained difference
to communities.
— Maximising impact—further consideration
is needed of how these funds can be maximised and can make a difference
for the long-term. This could include adoption of mechanisms that
recycle funds, including loan finance, and making significant
investments in organisations in the short term to enable them
to become financially sustainable in the long term. Those responsible
for distributing unclaimed assets should seek to build on existing
good practice in this area.
3.3 Agreement on the mechanisms for distribution
must be reached before any discussion can take place on priorities
and themes for allocation of this funding. There is a clear need
to build full understanding of unclaimed assets as a public good
in which everyone has a stake to ensure that a scheme for reinvestment
is successful. A number of parties have made suggestions about
how these funds could best be utilised, but these deliberations
should involve all stakeholders.
3.4 Therefore, discussion of what unclaimed
assets should support must be subject to further and full consultation,
including with voluntary and community organisations. This should
take a broad range of causes into consideration, to ensure that
funds do not simply go the most well known potential beneficiaries.
Mubeen Bhutta
February 2007
|
