Clause 17

Part of Dormant Bank and Building Society Accounts Bill [Lords] – in a Public Bill Committee at 3:45 pm on 15 October 2008.

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Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury) 3:45, 15 October 2008

I beg to move amendment No. 29, in clause 17, page 9, line 17, at end insert—

‘(4A) Any grant or loan made under subsection (1) must not—

(a) replace or substitute for government or local authority expenditure;

(b) subsidise or provide part of the costs for a service that is provided on a contract basis for a statutory body;

(c) replace statutory funding that has been withdrawn or is in danger of being withdrawn; or

(d) duplicate services that a statutory body currently provides.’.

The amendment tries to establish, in a not very elegant fashion, the principle that the money from the reclaim fund is in addition to Government spending. That is important. People whose money will be transferred from their dormant accounts to the reclaim fund and then to the Big Lottery Fund will want to know that that is not a substitute for Government expenditure, that it is increasing the resources available for youth services or for financial inclusion. There is no guarantee of that in the Bill. If the choice of the three causes in England had been different, the concern might not be relevant. The problem arises because there is Government expenditure on the provision of youth services, and councils already spend money on it. Financial inclusion is a significant priority not only for the Minister’s Department, but for the Department for Children, Schools and Families and the Department for Work and Pensions. I have looked at Government output and know that money is spent on this area.

I do not believe that any Member of this House would want to see the money that taxpayers contribute to financial inclusion drop from £12 million this year to £10 million next year because the Government know that £2 million will come in from dormant accounts. If an additional £2 million comes in, we want to see £14 million spent on that cause so that there is a boost in spending. I have not touched on the social investment fund in the context of additionality because I do not believe that the Government are currently providing that capital to a social investment wholesaler.

I hope that the Minister understands our concerns. Our argument is that, if this funding comes on stream part way through a comprehensive spending review period, it will be easier to check the additionality because the spending plans will be set out in the CSR. Given that the current CSR will expire at about the time this money comes on stream, it would be very easy for the Government to set their spending priorities taking into account the money that will flow from the scheme. With the amendment, we are looking for confirmation from the Government of the mechanism that they will use to ensure that the money is genuinely additional.

Another problem relates to the Big Lottery Fund, which will be the distributor. It does not give money only to voluntary organisations. That would be one way of ensuring that there were additionality. Having said that, there are even difficulties in that area because on the financial inclusion front some Government money goes to Citizens Advice, which is a voluntary body.

At the start of the CSR period, the Government could decide to reduce the amount of money that is spent in the affected areas in the knowledge that the business plan of the reclaim fund suggests that £10 million or £20 million a year may go to the three causes, as stipulated in the Bill. There is a concern about the additionality of this money and it was not satisfactorily addressed in the other place. Lord Howard tabled an amendment to try to achieve an end of this sort.