Good causes are likely to receive hundreds of millions of pounds more from dormant bank accounts than originally expected, public documents suggest.
Under laws introduced in 2008, any money held in a bank or building society account which is untouched for 15 years is collected by a body called the Reclaim Fund and earmarked for distribution to good causes, via the Big Lottery Fund.
Original estimates suggested that around £400m would initially be available for distribution in England, with around £100m more available in other nations. However figures published by the Reclaim Fund suggest at least twice as much is available, although it is being distributed more slowly than was originally anticipated.
£362m has already been distributed across the UK, and the Reclaim Fund currently holds another £561m. This figure is likely to continue to increase by around £100m a year over the next few years.
Some of that money will be returned to the owners of the dormant bank accounts, but most will not. Just £13m was reclaimed last year, and in the year before were just £10m.
The Office for Civil Society has not yet confirmed what will happen to the money, although it said in 2008 that any money is most likely to be committed to social investment, repayable finance or youth causes.
The government originally committed that all the money to be spent in England would be made available to Big Society Capital, a wholesaler set up to capitalise the social investment market. But BSC has said it expects only to receive £400m.
The government has told the European Union that “the money available in dormant accounts is much greater than originally anticipated”, according to the EU document granting an extension to state aid approval for BSC.
An analysis of the money raised from dormant bank accounts in Ireland, conducted in 2008 when the Dormant Bank Account and Building Society Act received royal assent, suggested that UK accounts could hold close to £4bn.
Government is now identifying other sources of dormant assets which could also be used to contribute to good causes. A report from a commission chaired by Nick O’Donohoe, the former chief executive of Big Society Capital, is expected imminently.