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I ask the Government to think about the flow of funds into the BLF and how it might be used to support a wholesaler. Of course, we must also bear in mind the
fact that a social investment wholesaler could use its funds to support initiatives for financial inclusion and youth services, so there could be a flow back to the spending priorities.
I want to touch briefly on amendment No. 14. I want to ensure that the BLF’s consultation on its strategy includes the three causes referred to in the Bill: youth services, financial inclusion and the social investment wholesaler. There seems to be a gap in the consultation process; it should go back to those three causes and look at needs in that context.
Amendment No. 15 is intended to probe the Government’s thinking on the information that will be published by the BLF in its accounts, to ensure transparency about the amounts distributed to England, Wales, Scotland and Northern Ireland and much more clarity about the expenses defrayed, not only those of the BLF but those that will be reimbursed to the consolidated fund from the BLF. One of the reasons why we tabled that amendment was to ensure clarity about the amounts allocated to England, Wales, Scotland and Northern Ireland. We debated the issue in Committee, where it became apparent that the Barnett formula would be used as the basis for that, but that is not stated in the Bill, as is the Government’s custom. Amendment No. 14 would ensure transparency in that respect.
Concern has been expressed, particularly in the other place and to a lesser extent during our proceedings in Committee, about the cost of the BLF, whether it will ensure that its expenses are proportionate to the amounts that it distributes and whether it will spend that money wisely. As I said in an earlier debate, every pound spent on administration is a pound not available to the good causes.
In Committee, the Minister argued that we should make sure that we do not spend too little on administration so that the money was targeted at the right places. However, it is important that there is transparency in the accounts of the BLF, or the reclaim fund element of it, about the amount spent. We have to ensure that the BLF knows that people will not lose sight of the amount spent.
There is another area that needs clarity. The Bill makes provision for the BLF to reimburse expenditure incurred by the Secretary of State—and from our discussions in Committee, we know that it will be the Secretary of State for Children, Schools and Families. Given the maxim that we need transparency about how money is spent, so we can be sure that we have the best value for money, it is important that we make certain that the amounts repaid to the Secretary of State are published.
In essence, there are two elements to this group of amendments. First, it allows us to air issues to do with the social investment bank, and to make sure that it does not drop off the end of the list of priorities. If resources permit, perhaps some money will be devoted to it, particularly given that money will have to be allocated up front to ensure that it is viable. Secondly, we must ensure transparency in how the money is spent. That relates to the amounts awarded to the different nations of the United Kingdom, and to ensuring that we do not lose sight of the money spent on expenses.
Mr. Jeremy Browne:
I rise briefly to echo a few of the themes that have already been touched on, and to ask the Minister for clarification on one or two other matters.
First, I should like to mention the point made in the previous contribution about how the Government intend to allocate money between the parts of the United Kingdom. Representations have been made to me by people in Wales, who express concern about the fact that the Barnett formula gives 5.84 per cent. of spending to Wales, whereas the Big Lottery Fund, using a needs-based formula, gives Wales 6.5 per cent. That is not a huge difference, but if we are talking about reasonably significant amounts of money, it is obviously a difference that will interest people in Wales—and, of course, by implication, the other three parts of the United Kingdom, because there is only so much money in the pot, and the more that goes to one part, the less there will be for others.
It would be useful if the Minister indicated precisely how the allocations will be made. As we discussed in Committee, one could make a case for many different bases. One could, straightforwardly, allocate the funds according to population, or according to some sort of assessment of need. One could even use as a basis the number, or indeed the value, of dormant bank accounts in each part of the United Kingdom. It would be reasonable to have some sense of the basis on which the decision will be made.
My hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) touched on the percentage of money that will go to youth services, as we did in Committee. I suppose the Minister may slightly feel that he is being pulled in different directions, because in Committee we discussed whether the Government ought to seek greater flexibility. At a later date, way beyond the period that we are envisaging—perhaps 20, 30 or 40 years from now—the Government may wish to redirect the spending to a cause that is particularly fashionable or important at the time. Of course, the Bill does not provide for that; the Government would have to introduce new legislation. They may wish to consider that.
More immediately, a reasonable concern has been expressed about what percentage will go to each of the three causes identified. That is a legitimate point, because if 90 per cent. were to go to youth services, and only 5 per cent. to each of the other two interest areas, there would obviously be a very different impact on youth services than if a third went to each of the interest areas. The Government could do a little better than just saying what the three areas are. I agree with the Conservative spokesman, the hon. Member for Fareham (Mr. Hoban), that all the mood music seems to suggest that, for the Government, youth services will be the priority. My hon. Friend the Member for North Southwark and Bermondsey mentioned 75 per cent. of the funding going to the first of the three priorities, youth services. From everything that I have heard, and from debates in which I have participated, my hunch is that that is roughly the sort of percentage allocation that the Government are considering, but the Minister may be able to be more helpful and give the House a steer on what is envisaged.
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My hon. Friend made a reasonable point: there ought not to be a division or a difference made between revenue spending and capital spending. We are all familiar
with projects in our constituencies that have got up and running but struggle to sustain themselves, because most of their costs are ongoing revenue costs. That is a particularly relevant consideration in this legislation, because we are expecting a big hit of initial money, as we will be dealing with all the accounts that have been dormant for 15 years or more in the banks and building societies that choose to participate in the scheme. That may afford a perfect opportunity for one-off capital projects. Of course, in all subsequent years, there will only be the money that becomes available in that 12-month period, so in year 2 we will be talking about only those accounts that have, at present, been dormant for between 14 and 15 years, and which will suddenly fall into the dormant category. There may well be an initial opportunity for quite an ambitious programme of capital spending, but the emphasis will move more to revenue spending in subsequent years. The Minister may well not be able to shed further light on the possible way forward, but he may wish to comment on the subject when he replies.
I share the view of my hon. Friend the Member for North Southwark and Bermondsey that there is no particular reason why we should seek to distinguish between existing and new projects. Sometimes, sustaining an existing project is as valuable, if not more valuable, than trying to come up with a new initiative, even though it is less headline-capturing; people are always seduced by the new, rather than by a reiteration of what has already been done. However, that does not necessarily mean that new projects have greater merit.
Finally, and again picking up a point made by my hon. Friend, we are in a slightly strange position, as we are not able—and do not wish—to direct the devolved Administrations, but we nevertheless know that people in Scotland, Wales and Northern Ireland, inasmuch as they are following the proceedings of the Bill, expect that youth facilities in those countries will benefit from the Bill’s passing into law. It is extremely unlikely, but somebody in the Scottish borders could find out that large amounts of money—75 or 80 per cent.—were going to youth projects in Northumberland, while the Scottish Administration decided to spend nothing on youth projects at all, and allocated the money to something completely different. People in the Scottish borders would say, “Wait a second; what about all the youth facilities being made available in Northumberland? We expected to have extra youth facilities across the border in Scotland.”
We are not in a position to direct the devolved Administrations, and as I say, it is not our wish or intention to do so, but it might be interesting if the Minister gave an indication of his feel for the way in which the Administrations and devolved Parliaments are looking at the issue. Perhaps he can say whether he feels that, in consultation with them, it would be appropriate to announce that extra youth facilities would be made available across the United Kingdom, even if the percentage split was left to the discretion of those with responsibility for the matter.
The amendments are useful because they allow us to discuss the point of greatest interest to our constituents, which is who will get the money, and what sort of schemes will benefit. I realise that some flexibility is appropriate, but it would be helpful and interesting if the Minister shed further light on the subject.
Tom Levitt: I planned to intervene on my hon. Friend the Minister when he responded on this group of amendments, but the issue that I wanted to raise was mentioned by the hon. Member for Taunton (Mr. Browne). I realised that my question would probably be so long, Mr. Deputy Speaker, that you would take a dim view of it as an intervention, so I thought that I would make a contribution instead.
First, I accept that the hon. Member for North Southwark and Bermondsey (Simon Hughes) has tabled perfectly legitimate probing amendments; I have every confidence that my hon. Friend the Minister will respond to them in a way that allows them to be withdrawn.
In Committee, I tried to get my head around the issue of the size of the entire pot, but did not manage to do so. I am not talking about the figure. Clearly we do not know the exact figure and there is much speculation, covering a wide range of numbers, about what it might be, but does my hon. Friend expect a huge splurge at the start with all the backlog being distributed in one go? Presumably the size of the pot would tail off pretty quickly over future years, coming down to a fairly minimal level in the not-too-distant future when the entire backlog had been spent and when, because people were more aware of the issue, fewer people were allowing their accounts to become dormant. Or does he expect a degree of housekeeping, whereby not all the backlog would be spent in year 1? Perhaps there would be a build-up over two or three years and a gradual reduction after that. Or does he expect that as far as possible the fund would be distributed at a fairly constant level over a number of years? The way in which applications are made will be influenced by the spending profile of the pot over the future years. I do not think that the answers to my questions will influence hon. Members should the matter go to a vote, but they would provide a useful context in which to see these perfectly legitimate probing amendments on which I am confident that we shall not have to vote.
Ian Pearson: I very much appreciate the probing nature of the amendments tabled by the hon. Members for North Southwark and Bermondsey (Simon Hughes) and for Fareham (Mr. Hoban). The legislation defines the basic architecture for the operation of the reclaim scheme, how it will transfer funds to the Big Lottery Fund and the general principles surrounding how those funds will be allocated. As has been noted, and as my hon. Friend the Member for High Peak (Tom Levitt) just mentioned, there is significant uncertainty about what funds will be transferred and when, so it is difficult to be precise in response to a number of the amendments, but I hope to be able to give sufficient clarification of some of the general themes in order to give the House the assurances that it naturally wants. We are all keen to get on with this and to see money going to the good causes that are specified in the Bill.
It will be for the banks and the reclaim fund to decide the speed with which they transfer dormant assets in the first instance. It is likely that that will occur in a number of tranches, but although we do not know whether the original figure of £400 million to £500 million will be the actual figure, it will be built up over a relatively short period of time, and then we expect a steady funding to the tune of some tens of millions of pounds once the initial quantum of money has been transferred.
This offers a number of opportunities to discuss issues such as that raised by the hon. Member for Fareham as to whether this provides an opportunity to have an up-front capitalisation for what the Bill terms a social investment wholesaler, and that is something that we would want to discuss. As has been made clear on a number of occasions, the funding priority overall in relation to dormant accounts has always been youth provision, and that remains the case.
Tom Levitt: I am happy with the model that my hon. Friend has just described, but it seems to suggest that a lot of money will be going into the fund but will not be distributed straight away and, given the quantities that we are talking about, there might be a period in which a significant amount of interest would be earned. Would that interest be added to the fund and be available for distribution?
Ian Pearson: It is one matter to decide how much money goes from banks and building societies into the reclaim fund and over what period—I have tried to give some indication as to how it would be likely to operate—and there is another set of decisions in terms of the transfer of funds from the reclaim fund to the BLF. We would expect the reclaim fund initially to take a relatively cautious approach about the amount of claims that are likely to be put upon it as a result of wanting to reunite people with their money. That will be a judgment for it to make and we would expect it to do so in a reasonable way, but to transfer funds to the BLF in accordance with directions that will be provided by Government. Exactly what stance the reclaim fund takes in terms of the amount of the balance that it needs to hold in reserve in case of future repatriation is an issue that adds further uncertainty to deciding how much should go to the good causes and over what period of time.
Amendment No. 8 seeks to ensure that the Secretary of State makes orders apportioning available sums between the four countries at least one month before the new financial year. I understand that it seeks, along with a number of others, to try to tease out the Government’s intentions on timing, and we fully recognise the need for advance planning when it comes to the voluntary sector. We have often been in the situation where the voluntary sector has not had sufficient advance warning, making it difficult to operate efficiently.
It is the Government’s intention that apportionment orders will be made in such a way as to ensure that each country is aware of the likely sums that will be available, and can therefore draw up directions or revise existing directions on the relative priorities for spending in good time so that the BLF has sufficient time to plan distribution programmes in accordance with such directions.
We do not see the need to specify in legislation a date by which an apportionment order will be made. The issue of apportionment will be kept under review in consultation with the devolved Administrations, but we do not anticipate that apportionment orders will be made on an annual basis. We envisage an initial order when the scheme is live, but no immediate or annual review. That is not to say that the formula will not be reviewed, merely that we do not intend that it would necessarily be updated at a fixed annual date.
Simon Hughes:
That is helpful. Certainty over a two, three or four-year period is obviously better than not knowing from one year to the next, but I reinforce the
point that when announcements are made, I assume that 1 March would be the latest possible date and that it would be the Government’s intention in any year when they make an apportionment decision that they will seek to make it much earlier in the preceding financial year.
Ian Pearson: We would always seek to act in as good time as we could in such matters.
Amendment No. 5 seeks to clarify that English expenditure on youth can be revenue or capital. I understand its probing nature and would simply argue that it is unnecessary because clause 17 is wide enough to enable the BLF to direct resources to either revenue or capital spending without the need for the clarification or qualification proposed.
Our ambition is for all young people to have access to high-quality, attractive and safe places to go. These should offer a wide range of exciting positive activities to support young people to reach their full potential, but also to help improve relations between young people and the wider community. We therefore intend for unclaimed assets in England to be invested in new and improved youth facilities in every constituency, allowing ever more young people to participate and to benefit. Our vision is for unclaimed assets funding that is primarily intended to support investment in youth facilities, not to meet ongoing costs. We recognise, however, that some time-limited resource funding may help to ensure the viability of capital projects—for example, to support project management and delivery costs. I anticipate that, where appropriate, the spending directions may enable such resource spending, and we are clear that, as drafted, the legislation allows us to do so. I hope that that gives hon. Members a clear indication both of our thinking in that area, and of why we think that amendment No. 5 would be unnecessary.
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Amendment No. 6 would spell out that spending under the English youth provision must be spent on either new or existing facilities, services or opportunities. Again, we agree with the thinking behind clause 17 but argue that the amendment would not be necessary, because the clause is already drafted widely enough. It is important to add that a demonstration of financial sustainability will be the key to the Big Lottery Fund releasing dormant accounts for youth projects, just as it currently scrutinises the viability of bids under its lottery and non-lottery programmes. So, we want the money to be genuinely additional, as I have tried to say. We had debates in Committee about the meaning of additionality, and we see it as being primarily capital-based, but allowing for some time-limited resource funding. We want to ensure that the projects that the Big Lottery Fund supports, using dormant accounts money, are sustainable because they take into account the long-term funding requirements on the revenue side, which could be met from other sources.
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