Assets from investment and wealth managers, as well as insurance and pensions, will be able to be channelled to community and social enterprises in the UK as part of the planned expansion of the government’s dormant asset scheme.
The UK government has today announced a further £31m of funding (on top of the £800m already allocated) through the scheme, which enables banks and building societies to channel funds from dormant accounts towards social enterprises through firms such as Big Society Capital and Access – The Foundation for Social Investment.
The scheme is set to be expanded – including assets from the insurance and pensions, investment and wealth management, and securities sectors for the first time – following a consultation on the causes that should benefit from the scheme in England.
Stephen Muers, CEO of Big Society Capital said today’s announcement was an “important step” from the government.
“The social investment infrastructure is already in place, meaning we will be able to deploy funds at pace. And because it catalyses private and philanthropic investment alongside, we can make this money go much further. For example, every £1 from the dormant asset scheme to-date spent on social investment has unlocked another £3 from other investors.”
The consultation on the scheme last summer led to the proposal of a community enterprise growth plan, which if backed by the dormant assets scheme would create jobs, boost growth and address regional inequalities by unlocking new investment for community enterprises.
The plan would use the social investment infrastructure built over the past 10 years in new ways to invest in community enterprises, and would use the funding provided by the dormant assets scheme to extend the availability of small, flexible, affordable loans to smaller community enterprises through blended finance, as well as investing in non-profit community lenders in underserved areas to enable them to lend to the micro-businesses and community enterprises that struggle to access lending from mainstream banking.
“Over the past decade, in a large part due to the pioneering investment from dormant assets, the amount invested in UK charities and social enterprises has grown tenfold with more than £7.9bn invested in thousands of mission-led organisations working to tackle social and environmental challenges in our communities,” said Nick Hurd on behalf of the coalition of social, business and investment sectors that proposed the community enterprise growth plan.
“There is now the opportunity to build on this – through the delivery of the community enterprise growth plan – expanding the tools and support available to charities and social enterprises and using the social investment infrastructure built over the last 10 years in new ways.”
Examples of projects already funded include a social enterprise that intercepts wasted food to provide affordable meals in Sheffield (pictured), a Birmingham enterprise helping ex-prisoners find meaningful employment and a Doncaster based scheme providing affordable furniture to low-income families.