Government guilty of ‘over-complicating things’ for charities, says Labour

07 Dec 2021 News

Houses of Parliament

Credit Niko Retro

The Labour Party last night accused the government of having “the knack of over-complicating things”, instead of giving charities adequate funding.

Rachael Maskell, the shadow minister for civil society, also claimed that ministers had not given the sector “the back-up it needed” during the last decade.

Maskell was speaking during the second reading of the Dormant Assets Bill in parliament, which will reform the existing dormant assets scheme and could release more than £800m to charities. Labour will back the legislation.

MPs from all political parties called for some dormant assets funding to be used to create a Community Wealth Fund. Civil society minister Nigel Huddlestone responded that the government was “not opposed” to this idea.


The dormant assets scheme currently uses unclaimed assets from bank and building society accounts. Under the proposed legislation this would be expanded to include other asset classes including insurance, pensions and securities. 

As part of this legislation the government also wants to change how funds are allocated in England. At the moment, funds must be spent on youth work, financial inclusion and social investment. 

Labour: ‘We are seeing demand spiralling, we are seeing charities struggling’

Maskell used the debate to tell the government that the charity sector “does not need further pilots” of funding schemes.

She said: “When it comes to the civil society sector in particular, the government always seem to have the knack of over-complicating things and missing the opportunity it [funding] presents.” 

Maskell added: “Charities have most certainly been tested in the last decade, as the state failed to give the sector the back-up it needs.”

She also criticised the £750m emergency funding scheme launched during the Covid-19 crisis, saying that “as we are seeing demand spiralling, we are seeing charities struggling, and therefore government could have been far more generous, as it was to other sectors during the pandemic”.

Pointing to the government’s failure to review the dormant asset scheme on time, Maskell said: “The three-year review should have taken place decades ago, and the legislation before us today should have already released millions of pounds.

“Imagine if it had. The sector might have survived the last two years more securely than where it is today.” She urged the government to “press on” with the legislation.

Support for Community Wealth Fund

Several members of parliament, representing the Conservatives, Labour and Scottish National Party, argued that some money from dormant assets should be earmarked for a Community Wealth Fund, which would make long-term investments in local areas with priorities set by the communities involved.

Last month, more than 400 charities joined forces to call for a Community Wealth Fund, in a campaign led by the Local Trust.

Danny Kruger, the Conservative MP who published a review of civil society in the summer at the request of the prime minister, joked that the Local Trust “seem to have got both sides of this house pretty much in their pocket when it comes to lobbying for this brilliant idea. I endorse it, too”.

Kruger described the dormant assets scheme so far as “a great success story”.

Public consultation in the summer

When the legislation was first debated in the House of Lords, peers raised concerns that the funds could end up being a “piggybank” for the government to use “when times are tough”.

Repeating these concerns yesterday, Labour MP Rushanara Ali asked for assurances that the government would not use dormant assets as part of a “power grab” to back its own “pet causes”.

The minister replied: “The government does not have direct access over dormant asset funding and cannot therefore influence [what it funds], and therefore the money must go to the appropriate causes as defined in legislation.”

Huddlestone said that a public consultation on expanding the causes in England which could be backed through dormant assets funds could begin in summer 2022 at the earliest.

The Bill has moved to be debated in committee before returning to the House of Lords.

For more news, interviews, opinion and analysis about charities and the voluntary sector, sign up to receive the Civil Society News daily bulletin here.


More on