Dormant Assets Bill [HL]

Baroness Barker Excerpts

Committee stage
Wednesday 23rd June 2021 Grand Committee

[Lord Blunkett (Lab)]

My Lords, I am very pleased to have put my name behind Amendment 55, spoken to by the noble Lord, Lord Hodgson. I strongly support the presentation that he made this afternoon. His work on the charities report and in chairing the Select Committee on Citizenship and Civic Engagement were milestones in understanding the critical importance of civil society and an enabling state. The way in which he presented his case this afternoon reinforced the importance of communitarianism—of building from the bottom, and of engagement with and facilitating the ability of communities to work for themselves and those whom they serve.

In a moment, I will obviously wish to speak to Amendment 56A in my name, but I want to say a word or two first in support of the noble Lord, Lord Hodgson, and my noble friend Lord Bassam in terms of the possibility in future of building from local experiments and local development into a national community wealth fund, and the facilitation of that through the legislation so that it might happen organically. I am proud of the work done over the years by South Yorkshire’s Community Foundation, which has been able to distribute grants and support local initiatives. Greater funding and support for that kind of operation is where organic change can take place and where people can see not only the contribution made from the unclaimed assets fund but the contribution that they can make in small ways by adding to that and being part of the process of delivery. They see where the funds have gone, experience the benefit of them and then take forward those learning processes to build that enabling state at local level, reinforcing civil society and enabling people to make decisions for themselves. The case is overwhelming and the question is about how we should go forward. I hope that the noble Baroness will be able to indicate that on Report there will be a welcome for a facilitating clause, which will enable us to move forward on that.

On Amendment 56A, I commend the Kickstart money and those who have, over many years, fought for better financial education throughout the education service. Obviously, this applies to young people who reach 16 and are looking to their future. I remember, as Secretary of State for Work and Pensions, going around the country on a fact-finding and informing exercise on what needed to be done about the future of pensions and the pension age. We were picking up the report by Adair Turner—the noble Lord, Lord Turner—and looking at the extension of the working age. We looked at auto-enrolment, which took so many years to implement, having been agreed back in 2005, and the way in which young people should think about their future.

This was complemented by the then child trust fund, which we addressed in the House yesterday and is relevant here. It was designed to enable people to have a nest egg—a small amount of capital that they could engage in their own lives. What we are talking about here has a synergy, and it is important for us to understand how the capital asset divide is a major challenge for the future. If you inherit a house from grandparents, parents or an uncle or aunt in London, it is the equivalent of winning the lottery. If you live in rented accommodation in the north of Sheffield, Barnsley or elsewhere and have nothing to pass on to future generations, you will see the reinforcement of intergenerational disadvantage.

I hope that financial education will help in its own right but also with the wider debate on where we are going as a country. It is particularly important that this happens at primary level; at secondary level, there is at least PHSE and the emphasis that can be placed on the economic side of the financial learning exercise. In the citizenship curriculum, the wider issues can be addressed as well. In primary education, those two things, while relevant to the curriculum, are not taught in a specific or identifiable way and it is really important that we get it into primary education at a very early stage so that young people understand the importance of their part in managing their money and how the financial world works around them. The unclaimed assets fund could be of great benefit if we can get this right.

[Baroness Barker (LD)]

My Lords, I, too, was a member of the Select Committee on citizenship, but clearly I did not make as big an impression as the noble Lord, Lord Blunkett, or the noble Baroness, Lady Lister. I am very glad that I was, however, because it was one of those pieces of work from which one comes away having learned a great deal about a subject that one thought one already knew a lot about but where there was much more to learn.

One of the lessons that came to members of that committee quite forcefully, particularly from people in communities that felt they had been left behind, was the very low level of knowledge of how to participate in local democracy—simple things such as knowing how to be eligible to vote, for example. In part, that fuels what I shall say over the next few minutes. I do not object to community wealth funds; I have considered them over the past few years and they are undoubtedly well intentioned and beneficial. It is also undeniable that they would in some—perhaps most—cases provide assets to go with the aspirations of local people to own and control the assets, which they are already legally able to acquire under the challenge fund and with the assistance of organisations such as Locality and so on. That legal right is already there.

My question about this is: in general, is the addition of another entity that has to be governed, managed, staffed and accountable advisable? Is it an addition or will it be an unnecessary added complication? We have hundreds of local community groups that rely on the knowledge, skills and good will of people in those localities. What they very often lack is technical skills.

Here I will pick up some of the points made by the noble Lord, Lord Bassam of Brighton, about the National Lottery Community Fund. I go back a very long way. I remember the creation of that fund and the impact it had on the voluntary sector, which I worked in at that point. It is unarguable that the fund brought in resources that could not have been imagined before its creation for capital, sports and social programmes.

However, it has always been a puzzle to me how we enabled the National Lottery Community Fund to be created and to be the size and extent it is, yet we have never had a requirement that part of its money would go towards sustaining and developing the infrastructure of the charities and community groups that largely deliver its programmes. The National Lottery sits on top of the rest of the voluntary sector and requires it to deliver its agenda. It does not have an obligation to sustain it.

It is worth noting that the financial position of the voluntary sector is vastly different from how it was even 25 years ago. Many noble Lords will know that NCVO, together with Nottingham Trent University, is carrying out a tracking exercise on the impact of Covid on the voluntary sector. It is producing some really interesting results about the way levels of demand for local services are rising and the extent to which, in this last year and in the forthcoming year, the resources of those charities will be under significant strain. At least 30% of them expect that they will have run out of reserves and will go out of business. That is the overall position.

I will tell just one story. Quite a number of years ago, National Lottery funding was used to develop a series of healthy ageing centres. These were flagship programmes set up with five-year funding. The great thing about them was that they had to be innovative and dynamic. Therefore, they have to be free-standing and to bring in new partners. They therefore could not be set up and run by the existing local older people’s organisations. They ran very well and highly successfully. Then the five-year funding ended, at which point the remnants of their good programmes were all absorbed by the then-existing local Age Concerns and so on. I wonder whether, in setting up this kind of mechanism, we might not set people up for a similar kind of scenario.

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Moved by

[Baroness Barker]

64: After Clause 29, insert the following new Clause—
“Eligible recipients of dormant assets funds
(1) The Dormant Bank and Building Society Accounts Act 2008 is amended as follows.(2) In section 16(1), at end insert “to social enterprises and charities”.(3) In section 16(3), at end insert “to social enterprises and charities or to a body that will make grants or loans, or make or enter other arrangements for the purposes of complying with subsection (1), with social enterprises and charities”.Member’s explanatory statement
This amendment would mean that all the holders of funds would have to be registered social enterprises and charities and that any bodies that received funding would have in turn to work with social enterprises and charities.

[Baroness Barker (LD)]

My Lords, I declare an interest as a member of the All-Party Parliamentary Group on Social Enterprise, at whose recent AGM I had the pleasure of listening to the Minister address the subject that we are coming to now. I admit that one of the reasons why I wanted to table this amendment was that, up until approximately an hour ago, the Committee had had very little discussion on social enterprises. We had, naturally, tended to focus on community groups and voluntary sector organisations and that is the trouble; social enterprises are always getting lost in discussions such as this. They also get lost when we come to talk about industrial strategy and so on. I wanted to focus some attention back on them because the dormant assets funding that has been released so far into the Big Society Capital fund and the Access foundation has been really important. It has helped more than 5,000 social enterprises since 2010, dormant assets worth £460 million have been put through social investment, and it has directly supported more than 1,500 organisations. It will be pleasing to some noble Lords that the vast majority—82%—of those organisations have been outside London, so the investment has been going into communities which are, by definition, less wealthy.

Social Enterprise UK, whose chair is the noble Lord, Lord Adebowale, is currently investigating the impact of that, but we know that it is still difficult for social enterprises to access finance and that access to what finance exists is uneven. There is a particular deficiency in support for some minority ethnic organisations. It has always been the case that women and people from minority communities in any walk of life or business have had more difficulty than others in accessing capital. The biggest problem has been access to what is known as patient risk capital—long-term investments—for social enterprises. Dormant assets are exactly what would work for that.

That is the background to my amendment, which seeks to do two things. One is to limit the beneficiaries of the dormant assets scheme to charities and social enterprises. The reason for this is that, as the primary purpose of this legislation moves away from Parliament and down through departments, and given the experience of a year ago, when we watched the Government scrabbling to find money down the back of departmental sofas to put towards the voluntary and community sector, there is a feeling out there that we have to protect these funds from temporary political exigencies. We particularly need to protect against the creation of new vehicles, some of which may be companies, in an attempt to deliver the agreed main outputs of this fund.

Secondly, my amendment would limit the distributing bodies to being charities or social enterprises. We have already seen the emergence into that field of one entity which is not a charity or social enterprise. My noble friend Lady Kramer, who comes from the banking profession, has in previous discussions noted that if colleagues in her former profession were to see a profitable avenue to go down, they might well develop a new arm to do that. In the scope of banking it is not a massive amount of money, but we are talking about billions of pounds of assets.

It is for those reasons that I have tabled this amendment, and it is those issues that I wish to test in discussion. I therefore beg to move.

[Baroness Kramer (LD)]

My Lords, I shall be brief, because my noble friend Lady Barker has basically laid out the case. I suspect that it was thought a given by everybody in 2008 that the money would go to charities and social enterprises; it probably never occurred to them to do anything else. We live in a much more varied world these days, so it would seem to make sense to add the clarity which the amendment seeks.

When we considered some of the amendments on who should be consulted, they talked about charities. There is a tendency to forget the social enterprise sector and the crucial role it plays. It is a rapidly growing role. I was stunned to learn of the findings of a survey recently conducted by Social Enterprise UK to work out the size of its sector. It started off with the assumption that it was a sector of around £24 billion and discovered that it was one of around £60 billion. An awful lot gets missed and somehow goes under the radar. We need to make sure that attention is appropriately drawn. The amendment is successful in doing that.

As we move into the post-Covid world, we will need to pull all the good levers that we have. That means the social enterprise lever as well as the charitable lever. Making sure that the language matches the reality strikes me as significant and useful. I hope that the points that my noble friend has made will be taken on board. Sometimes it is important to make things explicit, particularly in legislation. I cannot think that it constrains the Government in any way that they would find unacceptable, but it may ring the bell of DCMS when it does the consultation to think, “One of the usual suspects we need to go and listen to is going to be in the social enterprise world; it won’t just be in the big charities world”. Sometimes, we have to do something to make sure those messages get through.

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[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

I have received no requests to speak after the Minister, so I call the noble Baroness, Lady Barker.

[Baroness Barker (LD)]

I thank all noble Lords who spoke in support of my amendment, in particular the noble Baroness, Lady Merron. I thank the Minister for her considered reply. I hope she will understand that we have agreed from the outset of our discussions that there is an overall consensus about the benefit of the scheme and the Government’s intentions to take the existing scheme, grow it and make it work efficiently and effectively.

However, throughout our discussions the Minister will have picked up from all Benches a not inconsiderable degree of concern about the way the scheme is moving away from the initial primary legislation into secondary legislation, and the considerable powers of Ministers to change fairly fundamental aspects of it without further scrutiny. Although she was complimentary and supportive of voluntary organisations and social enterprises in her response, as I fully expected she would be, she still left the door open for for-profit companies to take over aspects of the scheme without any limitation. I worry about that. It is a real concern, particularly given the way parliamentary scrutiny is being watered down by the concept of the Bill.

I heard what the Minister said on this matter, but I am not reassured and I reserve my position for later stages, because there is something deficient about leaving the door open for the growth of non-charitable and non-social enterprise players in the distribution of this money. However, I heard what she said. We have come to the end of our discussions today and I thank her very much for the answer she gave. Therefore, for the moment, I beg leave to withdraw the amendment.

Amendment 64 withdrawn.