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Maude calls for devolved nations to add funds to Big Society Bank 7

Finance | Niki May Young | 3 Mar 2011

Francis Maude, minister for the Cabinet Office, has called on Scotland, Wales and Northern Ireland to add their countries' dormant account funds to the Big Society Bank pot.

The Big Society Bank is set to launch in the summer with £100m of capital from dormant bank accounts in England and an additional £200m provided by high-street banks following the Project Merlin bankers’ promise. An additional £300m of English dormant account funds are estimated to be provided after the first year.

In Parliament yesterday Maude explained how the funds would be distributed nationally: “The money put in by the banks will be for UK purposes, but the money coming into the Big Society Bank in due course from dormant bank accounts will be for England only, unless,” he added, “the devolved administrations decide to put their share of that money into the Big Society Bank, which I hope they will be encouraged to do.”

The Big Lottery Fund was called upon to act as distributor of dormant account money in 2008. Its remit is to distribute funds across the UK for social and environmental purposes. The organisation is working with both the UK and devolved governments to decide how the funds will be distributed.

Devolved countries have own distribution plans

But both Scotland and Wales have confirmed that they will be running their own social benefit programmes with the funds. A Welsh Assembly Government spokesman advised its scheme would launch later this year: “The Welsh share of dormant accounts monies will focus on helping vulnerable and disadvantaged young people to develop skills and find work, enabling them to make a contribution to their community.

“The programme will also fund small-scale projects aimed at encouraging community action to address climate change,” he said. 

In Scotland, it was hoped that funds could be released as early as April. However, a spokesman for the Scottish Government advised that it was yet to be informed by the UK government how much money would be allocated to Scotland. "We are interested in the £200m that British banks are putting into the Big Society Bank - funded in part by account-holders from Scotland," he added, hinting that the Scottish government had been left in the dark over the use of bank funds: "Scottish organisations should have access to this resource and we await clarification from the UK government about whether this will be the case," he said.

The Big Lottery Fund, HM Treasury and Office for Civil Society were all unable to confirm, when asked by Civil Society, how much has been accrued in dormant bank accounts for any of the devolved countries.

The use of dormant account funds from any UK country for the Big Society Bank is reliant on EU approval, which is expected in the summer. A spokesman for the Office for Civil Society advised Civil Society that the government was “not working to a scenario where this approval is not given”.

Priority to youth projects

The Big Society Bank will function as a wholesaler, providing funds by loans to social investment organisations. Maude yesterday reaffirmed children's minister Tim Loughton's statement that youth projects in particular would benefit from funds, advising that this will be a “serious priority”, despite Nick Hurd's assertion that as the Bank will be independent from the government, the Cabinet Office would be unable to decide where loans are allocated.

Maude also allayed concerns that high street banks would feel less obliged to provide funds to civil society organisations following the £200m Project Merlin funding agreement: “The introduction of the Big Society Bank certainly does not obviate the broader need to support voluntary and social enterprises, in the interests of local residents,” said Maude, responding to a concern put by MP for Foyle, Mark Durkan.

“We want to see much more money, including, over time, mainstream finance from the mainstream banks being made available for this market,” he later added.

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