Further supplementary memorandum submitted
by the National Council for Voluntary Organizations (NCVO)
The National Council for Voluntary Organisations
(NCVO) is the largest general membership body for charities and
voluntary organisations in England. NCVO welcomed the opportunity
to submit written evidence to the Treasury Committees inquiry
into unclaimed assets.
NCVO has long called for the transfer of unclaimed
assets from financial institutions to reinvestment in society.
This briefing outlines some of the key issues we wish to raise
in the Committee's inquiry:
The priority remains to reunite assets with
their owners. Only when this cannot be achieved should they be
reinvested in society. The 2006 Pre-Budget Report confirmed that
government and the banking industry see this as their priority
and will put a comprehensive reuniting scheme in place. Robust
measures should be put in place to ensure that assets can be reclaimed
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.
The 2005 Pre-Budget Report defined an unclaimed
asset as bank accounts that have had no customer activity for
fifteen years. In order to maintain trust and confidence, we support
this definition in the short term. However, it may be appropriate
to review the definition after a scheme has been in operation
for five years.
NCVO's main concern is to ensure that resources
from unclaimed assets are invested to maximise the impact that
they can have on communities, including through the work of voluntary
and community organisations. The following principles should be
upheld in any future transfer of unclaimed assets for investment
Reunification: Robust measures
should be put in place to locate owners of unclaimed assets and
ensure that they are always able to reclaim their assets irrespective
of how much time has elapsed. This must be accompanied by appropriate
Independence: These funds do
not derive from government, financial institutions or the voluntary
and community sector. Priorities for funding must therefore be
determined independently, in consultation with a range of stakeholders
including the 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
Responsive: If these funds are
to make a genuine difference, they must be responsive to genuine
needs and priorities and work with those organisations best placed
to identify these needs. Measures must be put in place to ensure
that this funding responds to actual, rather than perceived, need.
The nature and value of these funds means that
they must be distributed with consideration of the current funding
climate for the voluntary and community sector. The key issues
to consider in determining mechanisms for distributing unclaimed
Existing market: It will be important
to ensure 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 funders that
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 consider a capacity-building grant to support an organisation
to engage users more effectively. Voluntary and community organisations
need access to the full range of funding options, including grants
in aid, project funding, contracting and soclal investment if
they are to make a sustained difference to communities.
Maximising Impact: Further consideration
is needed of how these funds can make long-term difference. 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 financlally sustainable
in the long term.
A SOCIAL INVESTMENT
The Social Investment Bank (SIB) proposed by
the Commission on Unclaimed Assets is one of a range of options
for ensuring that unclaimed assets support a broad range of activities
and causes. The Commission confirms that the SIB will work through
existing and emerging financial intermediaries. This will be critical
to the success of any new Institution. Working with and through
the existing market will help to avoid duplication and maximise
Any new institution to reinvest unclaimed assets
must be genuinely independent. While the Commission on Unclaimed
Assets recognises the importance of this principle, it suggests
that the SIB would be "answerable to the third sector".
Yet, as stated above, these funds do not derive from the third
sector, govemment or financlal institutions.
Agreement on the mechanisms for distribution
must be reached before any discussion can take place on priorities
and themes for allocating this funding. There is a clear need
to build understanding of unclaimed assets as a public good in
which everyone has a stake. A number of parties have made suggestions
about how these funds could best be utilised, but these deliberations
should involve all stakeholders.
Therefore, discussion of what unclaimed assets
should support must be subject to further and full consuitation,
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.