Select Committee on Treasury Written Evidence

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 in society:

    —  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 publicity strategies.

    —  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 communities.

    —  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 assets are:

    —  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.


  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 expertise.

  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.

May 2007

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