Distribution of Dormant Account Money (Apportionment) Order 2011

Lord Maclennan of Rogart Excerpts

Tuesday 5th July 2011 Grand Committee

[Lord Maclennan of Rogart]

My Lords, my noble friend Lord Higgins has raised a number of the points which I would otherwise have raised, but we wish to reinforce his inquiries. I note that the money is being handled in Scotland, Wales and Northern Ireland by the Big Lottery Fund. What prioritisation, if any, is being indicated by the Governments of the countries to which power has been devolved? What relationship is there between the views of the Governments in these countries and the Big Lottery Fund? Will it be open to them to seek to influence the judgment of what is apparently being described as money for the public sector? It is to my mind rather odd that no public consultations were deemed necessary to consider this matter, or other matters related to the distribution of the dormant account moneys, since the amount is not negligible. I would be very interested to know if—in the course of the discussions about how the money might be divided up—any representations were made by the devolved Governments about how the money ought to be spent. Were they content with the proposal that it should be left to the discretion of the Big Lottery Fund?

So far as the reliance upon the Barnett formula is concerned, there have been many occasions—some recently in our House—when the limitations of the formula have been considered. Perhaps this is not the occasion to reopen that question, but it is a little disappointing that we have received an indication that the Barnett formula is considered to be the best method of financing the Governments of the devolved countries, without any indication that any sort of inquiry has been made by the Government.

It appears that some interesting suggestions have been canvassed by experts in this area. I draw attention in particular to the views of Professor Iain McLean of Nuffield College, Oxford, on how other countries tackle this problem. He drew attention to the example of how the Australian provinces meet to decide these issues. The time has come at least to put in hand significant research, because there is a widespread perception that the Barnett formula’s outcomes are not just inequitable. However, it would be a mistake, on the back of this order, to carry that out as far as it has been carried out in other forums.

The question of the amounts of money available is of great interest, and I am happy to have heard from my noble friend that the sums anticipated for this year are in the order of between £60 million and £100 million. Have any assessments been made as to whether those sums will be a one-off, or whether they will continue and, if so, at what level? I realise that that is a difficult issue to hypothesise about, but if any work has been done, it would be interesting if it could be shared with the Committee. I am grateful to my noble friend for what she has said.

[Baroness Royall of Blaisdon]

My Lords, I, too, am grateful to the Minister for her introduction. I certainly support the order and I am glad that the money will be distributed. I recognise that now is not the time to discuss how the dormant accounts money is to be spent, nor is it the time to have a discussion about the big society bank. However, I have reservations about the big society bank because, while I believe that it will help some people and organisations, it is a very small answer to the problems that they will encounter as a result of cuts in local authority services.

The noble Lord, Lord Maclennan, asked whether the noble Baroness thought that the £60 million to £100 million that it is estimated will come from dormant bank accounts this year will be a one-off, or if such an amount of money can go into the big society bank every year. If it is a one-off, my concern about the viability of the big society bank is exacerbated because, if there is to be a bank that will really fulfil what is likely to be an important role in supporting charities and civil society, it has to be more sustainable than something that will get possibly £60 million next year—or possibly not. Who knows? That raises some concerns.

I hear what the noble Baroness says about the Barnett formula. Discussions have taken place on whether or not there are other options and, clearly, the decision has been taken and has come down in favour of the Barnett formula. It would be interesting to know what discussions have taken place, and with whom, in order to reach that decision. I am concerned about its specific impact on Wales because it is widely recognised that Wales tends to lose out as a consequence of the Barnett formula.

As I said, I am glad that the money is to be distributed and welcome the order. However, it raises profound concerns which must be addressed, if not today then in the future.