Dormant Assets Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

2nd reading
Wednesday 26th May 2021 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, it is always a pleasure to follow my noble friend Lord Taylor of Holbeach. I have a long-standing interest in the charity and voluntary sector. I have written a number of reports for the Government on it, so a Bill that proposes to provide just short of another £900 million for the sector obviously has my support, as it does from everybody else around the Chamber.

Before I come to my remarks, may I ask my noble friend, when she comes to wind up, just to pick up a point made by the noble Lord, Lord Adonis? I think he said that this was the only charity piece of legislation planned for this Session. I have a certain proprietorial interest in a Law Commission Bill on charity law which picks up a number of the recommendations in one of my reports. I think—I hope—that she will be able to say that it is in the programme and that, therefore, that point from him is not correct. I look forward to hearing her comments on that.

I have two areas which I wish to probe and on which I hope that my noble friend can reassure me and the rest of the House, both now and in Committee. The first flows from my chairmanship of the Secondary Legislation Scrutiny Committee. The committee has noticed increasing use of skeleton legislation, where you get a broad idea of the direction of travel but the detail—what it really means to people on the ground—is left for secondary legislation from regulations. With great deference to my noble friend Lord Taylor as an ex-Chief Whip, let us be honest: secondary legislation has virtually no effective scrutiny at all—affirmative or negative or whatever. The nuclear nature of the scrutiny means that no party will press the button to blow the thing up. You cannot amend it, so you are left with a situation where you really have to—as my children would say—suck it up. We need to bear that in mind as we consider the provisions of this very worthwhile Bill.

The Bill starts with good will. We all think that it is wonderful. We all know that my noble friend will do her stuff and that the Opposition have good intentions, but we are making primary legislation. This will be on the statute book for years, and who knows what comes after us? We need to make sure that sufficient checks and balances are built into some of the provisions to ensure that less worthy people than currently populate our Front Benches are controlled in the way they may wish to use the proceeds from the Bill.

I am concerned about Clause 19, under which the Secretary of State can extend the scope of the dormant assets scheme both by regulation and by amending the provisions of the 2008 Act. I know that I will get knocked about by my noble friend Lady Noakes, who thinks that we are not being brave enough, but we need to be prepared to look at and examine the dangers of adding categories of assets that might change not only the shape of the scheme but the processes under which it operates, the way that it is managed and the impact it has. That is the point that the noble Baroness, Lady Barker, made in her comments. We need to probe all these things in Committee, not because we want to stop the Bill, but because we want to make sure it remains true to the purposes we are discussing.

My second area of concern is Clause 29, on the distribution of money and the way it can be controlled by regulation, which the noble Earl, Lord Devon, referred to. When all present are gone there can be a danger of the slush fund that my noble friend Lord Taylor referred to, and which is referred to in the briefing sent to us all, because when it is convenient and expedient Governments find ways to say, “We can wriggle our way around this.” Regulations do not provide enough protection from that, unless we find ways to buttress them in some form or another. My noble friend the Minister will be aware of the principle of additionality: that funds should not be made available merely to replace other funding. I cannot clearly see any provisions in the Bill that ensure that the additionality principle cannot be infringed so that the Government cannot say, “Let’s take a bit out of this and the dormant asset boys will fill the gap.”

That is my first area of concern. My second is whether the Bill’s purposes, as laid out in the 2008 Act, are still sufficiently focused on and relevant to the urgent needs of the social conditions prevailing today. Since 2008 we have had the financial crash and the pandemic, and, in the background as we sit here, the inexorable wave of the fourth industrial revolution of artificial intelligence and robotics is sweeping through our society, with all the changes it will make to the way our society lives, operates and collaborates.

I had the privilege of chairing your Lordships’ Select Committee on Citizenship and Civic Engagement. I am pleased to say that a number of its members are participating this afternoon: the noble Lord, Lord Blunkett, the noble Baronesses, Lady Barker and Lady Lister, and my noble friend Lady Eaton, who is to speak. The group of us are not cut from the same political cloth by any manner of means, but we produced a unanimous report. Sadly, there has been pretty limited follow-up on its recommendations to date.

Our evidence sessions and, indeed, our trips around the country, brought home starkly how very unevenly social capital is distributed across the country. The noble Baroness, Lady Lister, may not like the title “‘Left Behind’ Neighbourhoods”—I am a member of the APPG too—but it does carry with it a clear nomenclature of what we are trying to achieve. As we visited these areas, and met people, it was clear that it was not just about money. Money was, of course, important, but it was also about structure. The lack of knowledge and experience and, even more importantly, a lack of self-confidence and self-belief, meant that practical help was needed, often very locally based, along the lines mentioned by my noble friend Lady Wheatcroft. That is a precondition of the long and often painful process of rebuilding local social capital. Like many other noble Lords, I argue that this is an essential plank in the levelling-up process on which the Government are placing such emphasis. I am not yet sure that the Bill, as presently drafted, has enough focus on the deployment of patient, long-term capital to enable the provision of the practical experience and help need to provide remedies for these deep-seated structural challenges.

My final question is about the expanded asset list. I have served as a director of a number of listed companies and the unclaimed dividend register is the most awful administrative pain. I am not clear how private companies, public companies and private shareholders who do not have dividends due to them but have disappeared now fit into the scheme. I have read through the proposals for these unclaimed assets and the expansion of asset management companies. Nominee names may be one way that they could be attracted, but a lot of the people who have held shares for a long time still have them in their own name. They are registered with the company and they remain there. I would like to hear whether companies are joining the scheme, are encouraged to join it, are being told about it, are being told how they can provide or meet the provisions of it, or how they can delegate someone to do that on their behalf. Perhaps my noble friend will devote a word or two to that when she comes to wind up.

I conclude by saying that this Bill has absolutely worthy objectives and it has my support. Without wishing to delay the Bill or destroy its objectives, there are one or two areas where, in Committee, we just need to probe, explain and perhaps, from time to time, tighten it up.

Dormant Assets Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

Committee stage
Monday 21st June 2021 Grand Committee

[Baroness Barker (LD)]

My Lords, following our Second Reading, I went away and reflected on the way in which the Bill has been received and debated in your Lordships’ House. It would be fair to say that noble Lords as a whole wish to be supportive of the Government in what they are trying to do in the Bill. However, from a number of different perspectives, we all have questions about the effectiveness and efficiency of this method of doing things.

In particular, I tabled my Amendment 63 to make the point that nowhere in this Bill, or in its predecessor, is there an explicit statement about what these assets are supposed to be used to achieve. If we do not know what the objectives are, it is difficult to measure either the effectiveness or the efficiency with which the vehicle that has been constructed is doing that. It therefore seems that we as a House have an obligation to look at the reporting mechanisms that already exist. There are many of them in different places. They are all bits and pieces that you have to go and look at in, for example, the National Lottery Community Fund reports or the Reclaim Fund Ltd reports. Much of the detail of income and expenditure is in those reports, but there is very little in any of them on what has happened in terms of the impact.

My understanding is that the fund exists to use dormant assets not just because they happen to be there but for specific purposes of financial inclusion and developing financial literacy, particularly within poorer communities. That is what I really want us to try to have. When the Minister introduced the Bill at Second Reading, I was very struck when she said to us that the main impetus behind it coming to us was from the financial services industry, which wishes to see more dormant assets being used. That is fine—I absolutely agree with that—but to what end, and is the expenditure on this being done properly?

Noble Lords have to understand that the charitable sector is in a seriously bad way. A year ago, the Government asked the charitable sector what it thought the impact of Covid would be. In the initial lockdown, it thought that it would lose £4 billion. We have been through three lockdowns since that one. The government funds released to the sector in response to that figure of £4 billion were £750 million, of which £150 million came from bringing forward some of the dormant assets referred to in the Bill. The whole of the charitable sector is going to experience severe problems. It is every part of it, from Cancer Research UK already having to delay some of its projected work for the next five years through to the small neighbourhood organisations.

It is therefore extremely important that these assets be used for the express purpose for which they have been given and used as effectively as possible. We must also be able to work out from all the reporting that we do get to see that the principle of additionality is being adhered to: that these are funds for a specific reason, and that they are largely treated as one-off and not as ongoing revenue, particularly when government comes to talk about its overall response to the charitable sector.

My amendment was in part a nod to the Public Accounts Committee’s report of 9 June, in which it came up with its analysis of the Government’s response to the charitable sector and Covid. I understand that that report relates not just to the £150 million of dormant assets funding but to the £750 million. Nevertheless, the PAC raised significant questions in it, not least about the National Lottery Community Fund being able to provide sufficient data about what is happening with the distribution of some of its funds to poorer communities. Similarly, the report raised questions with the Charity Commission and the Government about the ongoing viability of charities, which are sometimes involved in quite essential charitable work.

For all those reasons, I came up with my amendment. I am agnostic on the length of time to be taken. I do not think that, for a programme of this kind, it is worth doing reports of anything under three years, because I do not think that you can generate significant data in fewer than three years, but we should have reports that are something more than a succession of different sets of accounts and annual statements for the different bodies responsible for the collection or the distribution of money, and we should look at whether this will continue to be the best way to deal with this issue. That is my amendment.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, the noble Baroness, Lady Barker, made a very important point about impact. I will come back to it in a moment in my remarks.

In the first instance, we heard from the noble Lord, Lord Bassam of Brighton, and the noble and learned Lord, Lord Etherton, about the timing of reviews to look at whether the structure is working effectively now and will work effectively at some date in the future. I want to probe the Minister a little further about the situation now and the current operation of the system. Specifically, I want to ask her whether the Government think that the existing powers to investigate, measure and check are sufficient.

As I understand it—I stand to be corrected—under the present system, money from the fund is passed to recipient bodies or recipient groups by what are called distributors, which have clear responsibilities to decide which bodies are worthy of funding and should get the money, and, after the funds have been passed over, to ensure that the proceeds are spent properly, effectively and in accordance with the way envisaged at the time of the grant. Again, as I understand it, there are currently four distributors: Big Society Capital, Access, Fair4All Finance and the Youth Futures Foundation.

The work of these four distributors is overseen by the Oversight Trust, which has no power to determine where the money goes but is charged with ensuring that the distributors have effective procedures in place to ensure good governance and proper performance of their duties. Clearly, the Oversight Trust has a very important role to play in maintaining public trust and confidence in the dormant assets scheme.

Can my noble friend enlighten me on three points? First, can a new distributor be appointed or dis-appointed? Who decides that and initiates it? If a decision is made to go ahead, what powers, if any, does the Oversight Trust, which is responsible for monitoring that body, have in making that final decision? That is my first question: can we remove or add distributors? How do we do it? What role does the Oversight Trust have in that process?

Secondly, and more generally, are the Government satisfied that the Oversight Trust has the powers necessary to fulfil this important role? For example, are distributors required or obliged to collaborate and co-operate with the Oversight Trust to ensure that it performs its duties effectively?

Thirdly—this point was made by the noble Baroness, Lady Barker—what role, if any, does the Oversight Trust have in measuring the impact of what the distributors are doing? Do we look in any way at whether the distribution policy being followed by one of the four groups now in power to do this makes sense for our society, or are they free as a bird? It would be helpful if the Minister could say a little about that.

Finally, it must be of importance, as we begin to see the expansion of the whole scheme—I think every Member of your Lordships’ House thinks that it is a good idea in principle; I certainly do—to ensure that the governance structure is adequate for the increased responsibilities that will be placed on it. I hope that my noble friend the Minister will be able to reassure me on these points when she replies to the debate.

[Baroness Noakes (Con)]

My Lords, Amendment 45 in this group is in my name. As has already been pointed out, it differs from the other amendments in the group, which call for reports, as it is a targeted amendment focused on ensuring that the scope for new asset classes being added to the dormant assets arrangements under the Bill is kept under review. The other amendments are broader and seek reports on the impact and operation of the scheme. I do not support littering legislation with reports on the impact of Bills—that is what the post-legislative scrutiny process is for—so I do not support the other amendments in the group.

I was going to point out to the noble and learned Lord, Lord Etherton, that his amendment is ineffective because Clause 31 deletes Section 14 from the 2008 Act, but he got there first. I would just explain that Section 14 was put in in the very specific context of the first Bill, the then Dormant Bank and Building Society Accounts Bill. At the time, there was considerable controversy about whether a voluntary scheme would work. There was much scepticism about whether banks and building societies would yield their assets, which is why that specific reporting section was put into the 2008 Act. It reported within a few years. It has been some time since I looked at that report but, broadly, it concluded that it had been effective. Not absolutely every bank and building society is in the scheme but, in terms of value, substantially the whole amount are.

I focused my amendment on bringing in other asset classes because it took a long time for this Bill to come forward after the 2008 Act. It was 13 years before more asset classes appeared, which is just too long. Indeed, my noble friend the Minister admitted as such at Second Reading when she said that the industry had been “nudging”—a polite term—the Government to get on and get this Bill done. I do not think that we can necessarily rely on the Government to prioritise or be proactive about the source of new funds coming into dormant assets, which is why I suggested a periodic report specifically on asset classes to keep up that pressure.

When the Dormant Assets Commission, which was set up to be independent of government, reported about four years ago it identified a number of additional assets. It decided to concentrate on the financial services sector, but even within that it noted, as we discussed at Second Reading, that a number of sources of assets in the financial services sector have not yet been brought within the scheme’s scope. The report also outlined a long list of assets outside the financial services sector, ranging from Oyster cards—I was astonished to find that there are 42 million cards with a balance on that have not been used for more than a year—to a large amount of money in unclaimed gambling winnings, which I find surprising. There are also lots of balances on things such as telephone accounts and energy accounts. There are lots of forms of dormant assets hanging around; they ought not to be retained by the companies that hold them but ought to be released for the kind of good works that are fostered by this Bill and the 2008 Act.

I hope that one day the Treasury will be shamed into no longer being the only body keeping its dormant assets out of the scheme, in the form of National Savings & Investments accounts. I believe it amounts to something close to state larceny for the Treasury to insist that it can keep dormant National Savings & Investments money because it has been used to fund public expenditure. It is not the Treasury’s money to keep. However, I acknowledge that shame is not something generally found in the Treasury, so we may have to wait a very long time to see those assets come within the scheme.

Dormant Assets Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

Committee stage
Wednesday 23rd June 2021 Grand Committee

Moved by

[Lord Hodgson of Astley Abbotts]

54: Clause 29, page 21, line 18, after “no” insert “other”

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I beg to move Amendment 54 and will speak to Amendment 55. I am grateful for the support of the noble Baroness, Lady Kramer, on Amendment 54 and of the noble Baronesses, Lady Lister and Lady Bennett, and the noble Lord, Lord Blunkett, on Amendment 55. I will focus the bulk of my remarks on Amendment 55 but will first deal briefly with Amendment 54. I thought about degrouping it but, in the interests of speed, the Committee might be able to deal with it as part of this group.

Amendment 54 is about transparency, a point raised by the noble Baroness, Lady Kramer, in her comments on the group beginning with Amendment 4, which the Committee discussed at its first sitting on Monday. Its very simple purpose is to ensure that, if the Secretary of State wishes to introduce restrictions on the way that the dormant assets scheme works, these have to be contained in regulations. This gives a proper degree of transparency to the actions of the Secretary of State. We all have our worries about the efficacy of the scrutiny of regulations, but this does at least bring them before your Lordships’ House. This is primary legislation, so will be in place for some years; it would clearly be inappropriate for a future of Secretary of State to be able privately to influence the operation of the scheme. That is the purpose of Amendment 54; I trust that the Government would have no problem with its objective.

In Amendment 55, I am returning to a point which I made at Second Reading: the very uneven distribution of social capital across the country. I fear that that unevenness may have been increased by the events of the past 15 to 18 months. This unevenness was originally brought home to me sharply during reviews of the charity and voluntary sectors that I carried out for the Government. It was my practice to try and hold meetings in different parts of the country to be able to take on board local concerns and questions. The fluctuating numbers of attendees at these meetings provided an interesting yardstick of the strength and vibrancy of social capital in those areas. When I chaired for your Lordships’ House the Select Committee on Citizenship and Civil Engagement—I was very lucky to have two such experienced committee members as the noble Lord, Lord Blunkett, and the noble Baroness, Lady Lister—the same situation revealed itself in our trips. Each situation is different, of course, but certain common themes to this problem have emerged. Funding is of course important, often in small, repeated amounts rather than in big dollops, but this is about much more than just money. It is about finding physical structures—buildings in which people can meet, socialise and help create communities. There is a third element: the need for practical experience and paid help to supplement voluntary efforts.

One of the most distressing aspects, for me at least, was the loss of self-confidence and self-belief. For too many, aspiration and hope had died, overwhelmed by the scale of the apparent challenge but, when a spark had been lit, often by a small group of people, the results were remarkable. I recall, on our committee visit to Clacton, that the pub which had been bought by the community, an ACV, was now breathing life into the area in a whole host of ways not originally envisaged. Money, physical structures and practical help are important, but there is yet another requirement—staying power and endurance. Rebuilding social capital is a marathon, not a sprint. Volunteers have lives outside the work they do for their communities.

On our committee trip to Sheffield, we met a group helping to keep libraries open and extend their opening hours, better to assist and serve their communities. But as members of the library group pointed out graphically, if Mrs Smith, say, has undertaken to open the library at 9 am on a particular morning and her child falls ill in the night and has to be taken to hospital, the library will not open because, quite understandably, rightly and properly, her responsibility to her child will take priority. That will be a blow to the community, unless there is a structure to ensure that someone steps into Mrs Smith’s place. That is why some limited paid back-up is important. It can be seen that this is a complex, shifting kaleidoscope of requirements that needs to be sustained over time.

Finally, to be really effective, to ensure that actions are done by and not done to, these activities must be and remain really local. That may seem very obvious to the Committee, but I shall quote a couple of sentences from our Select Committee report. We wrote:

“Communication between citizens and government at all levels is often poor, and was a subject frequently raised not just in formal evidence but by those we spoke to on our visits. When seeking people’s views, communication tends to be with the ‘gatekeepers’—those who hold themselves out, not always accurately, as representing their communities. People, especially in deprived areas, must be made to feel that government is speaking directly to them, working with them and for them, and paying attention to their needs and wishes … Communities must also be prepared to open up and bring more voices into the conversation.”


That is the background to the amendment. The concept of community wealth funds could be particularly well placed to meet the complex requirements I have described. They could provide funding, could provide a means to open and maintain buildings, could employ the limited permanent staff needed to provide the necessary structural framework and, finally, could do all these things over the long period needed to provide remedies for the deep-seated, structural challenges that these communities face—hence my interest in the briefing sent to me and many Members of your Lordships’ House by the Community Wealth Fund Alliance. However, I have to admit that I had a concern about the original briefing. The alliance speaks for 400 civil society public and private sector organisations, and the briefing sought the tabling of an amendment establishing a “Community Wealth Fund”—with a capital C, a capital W and a capital F—as a national body.

I told the alliance I believed that the concept and the approach they represented was entirely praiseworthy and worth supporting, but I did not think that as yet there was enough practical experience to justify a “Community Wealth Fund”, with capital letters, appearing in primary legislation as a national body. Could a CWF—with the capital letters—appear as a national body in future? Of course it could, but we are not there yet. We need more practical experience of how this alliance of 400 different organisations will work together, and how methodologies and objectives will change in the light of real-life experience.

Today, I am delighted to urge the Government to support the creation of community wealth funds—individual local efforts, shaped to meet the particular needs of their areas. I think it highly likely that a national body will emerge in due course, and perhaps become a fifth distributor but, as I have said, I do not think we are there yet. We need more experience of building from the ground up. In short, Rome was not built in a day.

--- Later in debate ---

[Baroness Barran (Con)]

I thank the noble Lord for his remarks. I absolutely do not deny in any way the importance of financial education, but the issue here is not the importance of any individual cause. The challenge we are faced with—or the privilege that we will all have—is to contribute to a conversation about the right cause for this particular stream of money, with its unique features, and that includes the existing causes that are funded. We will be putting the cart before the horse if we focus too much on causes to go into the Bill; rather, we should put the combined intellect of your Lordships and others into making sure that we spend future moneys in the best way possible.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I am grateful to all noble Lords who have taken part in this debate. I had better begin with an apology to the noble Baroness, Lady Barker, for not having name-checked her as a member of the committee. The truth is that I saw who signed their name to the amendment, but I did not see who was going to speak to it. That is an explanation, not an excuse. I know her as a doughty fighter, and I hope that she will accept this apology for not expressing my thanks to her.

She rightly drew attention to concerns about duplication and what we discussed in our committee about what we call “new initiative-itis”, where ideas are started by a Minister wishing to make a mark but they are abandoned after six months, whether they are good or bad is not followed through with and the institutional memory is never properly adjusted. I accept that. Indeed, I accept the caution from the noble Baroness, Lady Kramer, about future funds flow. She pointed out that this is not an endowment fund but a flow that stops flowing when the money is spent.

I share the point made by the noble Baroness, Lady Lister, that we need continuity. There is sufficient visibility over the next five or 10 years to be able to provide the financial continuity that both she and I see as an important part of the community wealth fund concept.

In response to the point made by the noble Baroness, Lady Barker, about duplication, some of the plan methodologies that we have seen from the Community Wealth Fund Alliance are distinctive and will provide a different approach that is not duplicated elsewhere. However, I accept the strictures of both noble Baronesses.

I am grateful to the noble Lord, Lord Bassam of Brighton, for his support. His suggestion of pilot studies as a means of beginning to build institutional memory was interesting.

I am also grateful for the support of the noble Lord, Lord Blunkett. Of course I accept his remarks about financial education. He and I have discussed many times the narrowness of the national curriculum, which fails to provide education in many of the most important parts of what makes a citizen an effective and worthwhile person knowing their rights and their responsibilities. Financial education surely must be a part of that.

Finally, the response of the Minister was, as ever, smooth and beguiling, and I am trying hard not to be beguiled. I think she said that the current drafting already implies what is made explicit by Amendment 54. Well, if the amendment makes it explicit, let us have the amendment, so that that is explicit, as opposed to relying on the interpretation of the words “at some date in the future”. I hope that my noble friend will come back to that and think a bit more about it, and also about the points that the noble Baroness, Lady Kramer, made.

On Amendment 55, the Minister said that consultation would begin as soon as the Bill becomes law. She referred later to the cart and the horse, and I have to say that that sounds like cart and horse to me because, essentially, Clause 29 throws all the cards up in the air, they will come down where they may, and the only way that your Lordships’ House, or indeed Parliament, will have to influence what happens after that will be by means of regulations. I fully accept that we will have a chance to look at them, but as has been said this afternoon, and as Members of the Committee know, they represent a lower level of scrutiny and of being able to amend what is proposed.

I understand the Minister’s reluctance to accept the amendment, and the weaknesses of the community wealth fund concept at this point in its history, but I hope that she will find time to reassure the people who are working hard in the Community Wealth Fund Alliance that the fact that the Government are reluctant to accept the amendments does not mean that they do not think it is a worthwhile concept. It is a worthwhile concept, and the Government ought to be finding ways—pilot schemes, as the noble Lord, Lord Bassam, suggested, and other ways—to encourage institutional memory and practice to develop in this area. Unlike the noble Baroness, Lady Barker, I think that the idea is distinctive, offers something that no other groups will offer and will be able to do so over a sufficiently long time to make it an attractive prospect in helping to rebuild our social capital. I hope that the Minister will think again about her remarks on Amendment 54. Let us make sure that we have absolute clarity about what can and cannot happen. In the meantime, I beg leave to withdraw the amendment.

Amendment 54 withdrawn.

--- Later in debate ---

[Baroness Lister of Burtersett (Lab)]

My Lords, I am pleased to speak in support of these amendments, especially Amendment 59 in my name and Amendment 57, to which I have added my name.

With regard to Amendment 57, I was encouraged by the Minister’s response at Second Reading to concerns raised about the consultation process. However, given what she said and what is said in the fact sheet on the Bill, it seems very odd that the Bill itself suggests a narrower approach to consultation, restricted to

“the Big Lottery Fund, and … such other persons (if any) as the Secretary of State thinks appropriate.”

That “if any” implies that the Secretary of State could well consider that there are no other appropriate persons—not a good look to the outside world.

While it is reassuring to have a commitment to wider consultation on the record, it does not have the same force ultimately as the Bill itself, especially if we are looking to any consultation that might be required in future because of a new order under this clause. Would it not make sense to amend the Bill so that it reflects the Government’s actual intentions, thereby giving a clear signal that the Government would like to hear from a wide range of relevant voluntary organisations and community groups? I hope that the Minister will be able to give us a clearer idea of what is envisaged by way of consultation, but also that she will undertake to take the question away and see whether she cannot come back on Report with an amendment that better reflects the Government’s stated position than the rather forbidding wording of Clause 29(3).

I want to take this opportunity to refer back to the previous group and ask the Minister whether she can confirm that the idea of community wealth funds will be included in the consultation document. If it is not, only those who already know about the idea will be in a position to support it. This links back to what the noble Lord, Lord Hodgson, said about the Government sending a signal that they consider community wealth funds a worthwhile concept. The Minister again carefully avoided saying what the Government think about community wealth funds, so some kind of signal to all those voluntary organisations in the alliance that they look sympathetically on the idea would be helpful.

Amendment 59 reflects concerns expressed, in particular by the NCVO, that there should be adequate time for consultation. When I tabled the amendment, I must admit that I thought that 12 weeks was the normal recommended time period. It had recently been breached by the six-week consultation on the New Plan For Immigration so I wanted to be sure that it would not be breached in this instance. However, thanks to a note provided for me by the Library, I have discovered that, some time ago, the Government withdrew the guidance on a recommended 12-week period in favour of departmental discretion. Since then, there appears to have been a marked reduction in the typical time allowed for consultations.

The NCVO puts two main arguments as to why consultation on the use of dormant assets should last for a minimum of 12 weeks. First, it is important that the Government hear from a wide range of groups and communities, which may themselves need to consult their members and may not be used to responding to government consultations. The official guidance on consultation introduced in 2013 indicated that, when deciding on the timescale for a given consultation, the capacity of the groups being consulted to respond should be taken into consideration. Timeframes should be proportionate and realistic. This all points to a good amount of time to ensure that such groups have the time they need to respond, even though the most recent iteration of the guidance in fact gives very little guidance at all. I was not at the meeting where the Minister gave assurances about following Cabinet guidelines but I do not think that those guidelines take us very far.

Secondly, the decisions that will be taken on funding have relatively long-term implications, notwithstanding what the noble Baroness, Lady Kramer, said on the previous group, so it is important to take the time to listen and get the decisions right. I am sure the Minister will point out that it is not usual to specify a timescale for consultation in legislation, but in the face of increasingly vague official guidance, it may be necessary to specify it to ensure that the Government hear from all those they need to hear from. That said, I would welcome a clear commitment on the record from the Minister that the consultation will last at least 12 weeks.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I put my name to Amendment 57. The essence of the case has already been well covered so I shall be brief, but brevity should not be taken as indicating that I do not attach considerable importance to this amendment.

The Committee will recall that, a couple of minutes ago when I was moving an earlier amendment, I emphasised the need for local views to be taken into account and the fact that, to be effective, “local” must mean precisely that. It is charities and voluntary groups, which are often quite small, that can speak most authoritatively about the needs of their local areas and communities, hence the first part of this amendment. It is obvious that the groups that are the likely recipients of funding under the scheme will have the most relevant first-hand experience or views about how the scheme is or should be operating.

There is a danger, of course. I fully accept that trying to discern what local communities really want is not always easy and may require particular effort. That is why there is a temptation to fall back on what I referred to a few minutes ago as gatekeepers. While many gatekeepers are absolutely fine, we need to ensure that those who are holding themselves out are sufficiently well plugged in to the detail.

In that connection, I re-emphasise the point I made—it was also made by the noble Baroness, Lady Lister, a minute ago—that the concept of community wealth funds are relatively unknown and therefore, to get a proper consultation on how they might work, the Government are going to have to do a bit of pitch rolling, if I may use a cricketing analogy, to ensure that the contributors to the consultation process have a full understanding of what they are being asked to respond about. Having said that, Amendment 57 seems likely to provide the objectives to be fulfilled, which is why it has my support.

[Baroness Kramer (LD)]

My Lords, I welcome the noble Baroness, Lady Merron, as I think this is her first outing in a Grand Committee in the House of Lords, and she is basically doing it in a prison visitors’ set-up. We probably feel like that sometimes here. She made the absolutely key statement: that consultation needs to be meaningful. That certainly underpins everything that I have to say.

I am exceedingly troubled by the very narrow list of consultees in the Bill. The Minister talks about the public, but has felt it really important not to put public consultation in the legislation. We really need an understanding of why she is so determined that the public will not appear in that consultation list. Obviously a Secretary of State who thinks it appropriate can do so, but it is not inherently appropriate in the way that the Bill is drafted. That really is important and it needs to be justified.

The noble Baronesses, Lady Lister and Lady Merron, and the noble Lord, Lord Hodgson, talked about the importance of including charities more broadly. I would add social enterprises. The noble Lord also pointed out the significance of local views.

It may be that I am an old cynic but I deal with a lot of consultations, particularly in the finance sector—they tend to be HMRC or Treasury-driven—and I am extremely conscious that a handful of voices get listened to. They are the sort of recognised powerhouses, the usual suspects and whatever else. Everybody else might get a little answer to one particular point that they make but very rarely—in fact, never within the field that I have covered—have I seen anybody other than that central core of usual suspects have any significant impact on the outcome, and lead to a different approach as a consequence of the consultation. I am extremely troubled by the way in which all this is currently structured and by its essential identification of only one big usual suspect: the Big Lottery Fund. Frankly, it is not fair to the Big Lottery Fund to make it carry that full burden alone, in the way that has been done.

My Amendment 58, also signed by my noble friend Lady Barker, was tabled because I am spitting tacks generally at the way that there is no role for Parliament in these consultations. From the many exchanges I have had with HM Treasury I know that, when there is a consultation, regulators take exactly the same point of view: that any parliamentarian is welcome to write in. Well, first, you do not find many parliamentarians with the time to develop and do all that but, secondly, they are not among the usual suspects who ever get seriously considered. It is not worth the candle most of the time and I have no reason to think that any other department will be very different in its attitude.

The first time that parliamentarians will have any impact will thus be in the useless process of dealing with a statutory instrument that they cannot amend or kill. This seems fundamentally disrespectful to Parliament. In an area such as this, we are essentially looking at Parliament in many ways as the guardian of people’s money that they have somehow missed or lost, or whatever else, so it is even more important that there should be that much wider voice speaking.

In Amendment 58, which is slightly hopeful, I have popped in a requirement to engage directly with Parliament. This problem will have to be resolved because consultation is increasingly becoming the substitute for scrutiny and accountability. It is not designed to do that in the way that it is structured at the moment.

I will pick up the point made by the noble Baroness, Lady Lister. It is quite shocking that we do not even have a reliable framework now for a consultation: it is back to departmental discretion. That is not appropriate. It is highlighted again in the Bill and, for all these reasons, I find this very troubling. We need a justification from the Government on their approach to consultation, and the answer is not: “In this instance, we’ve decided to do something very broad and general, so be happy”. Why is it in no way captured within the legislation itself?

Dormant Assets Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

Report stage
Tuesday 16th November 2021 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I am very delighted to support this amendment. My colleagues and I are great believers in empowering local communities. Indeed, in my years as an MP, I saw a number of local initiatives, driven by local people and community groups, that did some extremely good work but could not cope with the mutual demands of both providing their services and fundraising, so they were unable to grow to that kind of sustainable point that was so important in the community. It seems to me that the community wealth fund gives opportunities to those new initiatives, driven by local people, targeted very much towards the members of the local community and very much reflecting local need. It would seem ideal to do this under the structure of the dormant assets programme.

I have two other reasons for feeling that this is important. Later on Report, we will address issues of oversight over the kind of programmes funded through dormant assets. But it seems to me that there is no way that that issue can be addressed without recognising that the kind of resources for the detailed scrutiny and monitoring of programmes is in short supply. It seems to me that, when you have small local programmes, a well-structured community wealth fund arrangement can put in place that administrative oversight and make sure that, locally, the funds are well spent, provide value for money and are properly targeted. So that level of administration in fact makes up for a much broader weakness, frankly, within the overall dormant assets structure.

I am also very pleased to look at a pilot approach—this will be a case of trialling, reshaping and refining—because I am concerned to make sure that the money derived from the dormant asset funds is used in addition to the kind of services that ought to be provided, whether by central or local government. It will be really important for an entity such as the community wealth fund to work in tandem with local authorities but not substituting for what they can or should be doing. We do not want duplication of administration or service, and we certainly do not want to give central government an opportunity to further reduce the resources that it provides to local authorities on the grounds that the dormant asset fund and various charitable and local civic societies will do the work in its place and not require the normal support and resource that ought to be provided.

It therefore seems to me that this is very much a win-win approach, and I hope that the Government will take it on board. The Bill is an opportunity to expand what has been a very successful programme in significant additional directions, and this is certainly one of them.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have my name down in support of this amendment, which, as the noble Lord, Lord Bassam, said, builds on one that we debated in Committee. As is always the case, when you come back to the subject, there is a risk of a great deal of repetition, and I do not wish to try the patience of the House with a long exposé. During the debate in Committee, the Minister’s predecessor, my noble friend Lady Barran, raised some significant concerns that the Government had about the way that this might operate. The amendment of the noble Lord, Lord Bassam, has very neatly—if I may say so without sounding patronising—answered some of the points made then.

I will repeat, in four sentences, four reasons why I am attracted to community wealth funds. They are very local and can reflect the often highly idiosyncratic needs of a particular local community. They can provide a physical space—a building—as a focus for presenting and answering those particular needs. Thirdly, they can provide an element of professional help, without which a purely voluntary organisation can struggle. Fourthly—this is most important—they can provide the long-term capital needed to answer and build answers to the very deep-seated challenges that many of these communities face.

However, as my noble friend Lady Barran said—I am sure that if I could see my noble friend’s speaking note I would see that he will repeat it in a minute—this is a new approach and the Community Wealth Fund Alliance is setting out, brimming with confidence, hope and optimism. I certainly wish it well, but there will be difficult days ahead with hard decisions about structure, approach, governance and impact. The noble Baroness will probably raise that last issue in her speech in a minute. It is dangerous if you accept too rigid an approach in primary legislation; if it subsequently turns out to be less than ideal, you are stuck with it. So there is an element of “Be careful what you wish for”.

Then there is the issue of consultation. I think many of us would say that this was a case of putting the cart before the horse. Normally you have a consultation, get the results, draft the legislation and then discuss it in the light of what has been discovered, but that has not happened here and we are going at it the other way around. Whether we like it or not, that is where we are. So I can see why, unsatisfactory though that approach is, in the circumstances, the Government cannot and do not want to pre-empt the results of that consultation.

Conversely, primary legislation, like buses, does not come along very often; the next Bill might be in another five or 10 years—it is 15 years since the noble Lord, Lord Bassam, and I discussed the Charities Act, and we have had probably had one since—but we need to send a signal of our support for community wealth funds. How do we balance those issues? I suggested that if the noble Lord, Lord Bassam, replaced “must” in his original drafting with “may”, that might provide an answer that would not force the Government, the Secretary of State and my noble friend on the Front Bench to set up a community wealth fund but would provide them with an option to do so in light of the consultation when they had the full outcome available. Since the noble Lord was kind enough to make that change, I am delighted to support his amendment.

[The Lord Bishop of Ely]

My Lords, the noble Lord, Lord Bassam, is correct that my friend the Bishop of Newcastle has made her valedictory speech, but I have been permitted to speak on her behalf. Noble Lords may have noticed a certain discrepancy in height and volume between me and the Bishop of Newcastle but she is living proof that stature has nothing to do with size. I applaud my friend for her significant role as a Lord Spiritual and a community leader in Newcastle; the city has honoured her with the freedom of the city in recognition of her work.

In support of the amendment, we would like to say that the creation of community wealth funds, as the noble Lord, Lord Bassam, has said, will strengthen community life in left-behind communities, including many in the diocese of Newcastle. Levelling-up investment, while welcome, has been largely about hard infrastructure but we want to see more investment in social infrastructure so that our communities can flourish. It is precisely that social infrastructure which could be provided by the community wealth funds, so they are already creating confidence in communities even if the consultation is yet to happen.

One of the key founder members of the Community Wealth Fund Alliance is a local trust that administers the Big Local programme, a programme that has inspired this community wealth fund proposal. The Big Local programme has been operating for 10 years and has generated considerable learning and evidence that could inform the design of the new pilot fund or funds that the amendment would enable.

The Big Local programme supports 150 neighbourhoods across the country that have each received just over £1 million in funding from the National Lottery Community Fund. That funding is placed directly into the hands of local residents, giving them the ability to make decisions about how to improve their neighbourhoods and their quality of life. Areas were selected on the basis that they suffered from higher-than-average levels of deprivation and had previously missed out on their fair share of lottery or other public funding.

An in-depth evaluation of 15 of the 150 Big Local areas half way through the programme outlined the benefits for individuals, groups and organisations and charted wider community change as a result of the funding and support offered. The benefits are considerable, including increased employment and access to employment opportunities, increased confidence and aspiration and reduced social isolation. The programme has also increased people’s sense of agency and belief in their own ability to make things happen.

--- Later in debate ---

[Baroness Kramer (LD)]

My Lords, my name is attached to Amendment 4 and I would gladly support Amendment 5. Government Amendment 3 is definitely an improvement on the previous situation, which was unclear; the Government were sure they would have a public consultation but were not really required to do so.

When the original Dormant Assets Bill was passed, the purposes for which dormant assets could be used were on the face of the Bill in primary legislation. Consultation, now that the Secretary of State is in a position to expand that range significantly, is absolutely vital. In Amendment 4, we reflect some of my ongoing frustrations with consultation after consultation: they fall to the attention of the usual suspects and, indeed, the responses of the usual suspects are very often taken into serious consideration, but they never get out into the wider world. When there are lots of diverse views, perhaps supported or mentioned by only small handfuls of people because they have never occurred to others, those tend to go into the “dismiss” bucket almost immediately.

I know how difficult it is to structure a consultation that really does consult. I say that from the position of having been a Minister during the coalition years, when I wanted to use a consultation to bring in new ideas as well as to get people’s responses to possible avenues that we might go down. It was a sheer battle with my own staff to devise such a consultation and questionnaire and to leave space for open responses and gather them in. It is not the norm; I am very well aware of that. I do want to press the Minister, because this should be going to a much wider range of groups than might normally keep an eye open for a consultation —the wide range of social enterprises and charities that go out to various communities, particularly deprived communities. Those communities tend to be the least alert to the fact that there is a government consultation happening or to knowing how to respond to it.

Then there is Parliament. Most of us understand that secondary legislation is not worth the paper it is written on in terms of getting parliamentary opinion or any potential for amendment, so it is important that the relevant committees of Parliament are engaged with something as significant as this. I press the Minister: we understand that he has moved some way, but we need quality. The style is perhaps there but there is no quality or content behind it to give us full reassurance. If he will not accept Amendments 4 and 5, can he at least give us a verbal assurance of the kind of quality that we want within the consultation itself?

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have put my name to Amendment 5 in the name of the noble Baroness, Lady Lister. I was reassured by my noble friend’s introductory speech and the deal that has been hacked out between him and the noble Lord, Lord Bassam of Brighton. The noble Baroness, Lady Kramer, has, in part, shot my fox because I wanted to talk about the usual suspects, which she referred to. That is the danger, although I say to the signatories to Amendment 4 that it looks to me like a pretty good list of usual suspects in that amendment. I was not sure that we were not just going back down the track that we were trying to avoid going down.

My reason for supporting the amendment in the name of the noble Baroness, Lady Lister, was to make sure that we would make a big effort to get down to the smaller organisations, which often had unique insights into the problems of a particular area. From my point of view, I rather doubt whether that goes well into legislation, but it is the sort of area where a good strong ministerial Statement, given on the Floor, would reassure a lot of us that there will be words that we can go back to if the consultation does not reach as far, as deep and as wide as some of us think it should.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I thank noble Lords for their recognition of the action the Government have taken on this, even if it is conditional at the outset. I am grateful to the noble Baronesses, Lady Kramer, Lady Merron and Lady Lister of Burtersett, for the important issues they have raised in tabling Amendment 4. I thank the noble Baroness, Lady Lister, my noble friend Lord Hodgson, and the noble Lord, Lord Blunkett, for Amendment 5.

We have had a good debate, both in Committee and again today, and I welcome the support shown for securing the widest possible input into determining the future spending priorities for England. I share the desire raised by noble Lords to ensure that the public, beneficiaries, both Houses of Parliament, social enterprises and charities can have their say on the future focus of dormant assets funding; although I disagree about the means and submit that Amendment 3 is a better way to achieve this, we all share the same intent.

As my noble friend and predecessor Lady Barran outlined in Committee, it is our position that everybody who is interested, rather than a collection of predetermined or specified stakeholders, should be consulted. That is why we have chosen to take the broadest approach available in Amendment 3, and why we believe that Amendment 4 is not as inclusive.

Dormant assets funding is not government money; it originates from individuals who have lost or forgotten about their asset and is voluntarily transferred into the scheme by responsible industry participants who, despite their best efforts, have not been able to reunite those moneys with their owners. The scheme is a unique example of collaboration between the public, private and civil society sectors, responding to the imperative to put forgotten money to better use, rather than letting it gather dust in inactive accounts. Because of the wide range of organisations and individuals that are potentially affected by the scheme, we want to avoid at all costs making further specifications in this clause which could imply that certain groups are more important than others that it might be equally appropriate to consult.

The government amendment is sufficiently broad and, in line with common practice, parliamentary committees will continue to be able to consider relevant issues as they see fit in the future. That is why we do not think it is appropriate or necessary explicitly to name parliamentary committees as a consultee. However, we are happy to commit on the record to engaging with relevant and interested parliamentary committees for the first consultation.

As noble Lords have highlighted, the social and environmental focus of the English portion is a significant and important question. The Government agree that the consultation must be open for a proportionate amount of time to allow for considered and good-quality responses. That is why I am happy to place on the record our commitment that the first consultation under this section will last for at least 12 weeks. I am grateful to the noble Baroness, Lady Lister, and others for their appreciation of that.

I also reassure noble Lords that our intention is to consult widely, taking care to welcome local community voices into the discussion to ensure that we capture as many views as we can, as the noble Baroness, Lady Kramer, my noble friend Lord Hodgson and others rightly pressed.

The Government will continue to consider the most appropriate length of future consultations, in line with Cabinet Office guidance. I hope that our previous conduct in this area has proven we take that seriously and are committed to ensuring fair and open consultations on the dormant assets scheme. The 2020 consultation on its expansion, for example, was extended from 12 to 21 weeks, as requested by voices in the industry in response to the Covid-19 pandemic, to ensure that everybody had the time to contribute meaningfully. I am pleased to say that that was very successful: we received 89 responses, representing over 500 organisations and individuals, which informed the development of this legislation. Given the range of interested parties involved and the complexity of the policy area, we will always ensure that a proportionate length of time is provided for consultation. In order to preserve the integrity and protect the impact of the scheme, we also do not anticipate changing the causes regularly.

The consultation would seek views on what social or environmental causes should be supported with dormant assets funding in England. However, we do not think it is appropriate to specify the scope and content of the consultation in primary legislation, including the extent to which the scheme is meeting some of its underlying policy objectives or what additional assets or operational changes would improve its performance. We believe it would be most appropriate and effective to consider those as part of Amendment 7. We therefore do not support combining aspects of this equally important work with the duty to consult, particularly as the latter relates only to England.

Our commitment to an open, fair and inclusive consultation is also the reason why we cannot accept Amendment 5, from the noble Baroness, Lady Lister, which seeks to require the Government to consult on community wealth funds every time an order on English expenditure is considered. I am conscious that we went into a more detailed discussion of the community wealth fund model in our debate on Amendment 1. Even if I did not convince your Lordships’ House not to support that amendment, I hope I convinced noble Lords that the Government are by no means against the proposals for community wealth funds but maintain that putting them in the Bill, and in the case of this amendment legislating for them to be consulted on every time an order was considered, would be inappropriate.