Clause 29 - Distribution of dormant assets money for meeting English expenditure

Dormant Assets Bill [Lords] – in a Public Bill Committee at 10:15 am on 11th January 2022.

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Photo of Jeff Smith Jeff Smith Shadow Minister (Digital, Culture, Media and Sport) 10:15 am, 11th January 2022

I beg to move amendment 5, in clause 29, page 22, line 11, at end insert—

“(1A) An order under subsection (1) must be consistent with criteria published by the Secretary of State setting out the principles to be used when making a determination as to whether restrictions, or no specific restrictions, are to be applied to distributed dormant assets money for meeting English expenditure.

(1B) Prior to publishing the criteria under subsection (1A), the Secretary of State must consult on the purposes for which the dormant assets money may be distributed, and the criteria to be applied therein.

(1C) A consultation under subsection (1B) must conclude not more than 3 months after it is announced.”

This amendment would require the Secretary of State to publish and apply criteria to be used when determining the purposes for which dormant assets money can be distributed. The criteria must be the subject of a consultation which must last no longer than 3 months.

I will also speak briefly to amendment 4, which stands in my name and that of my hon. Friend the Member for Pontypridd; to Government amendment 1; and to amendment 3, which stands in the name of my right hon. Friend the Member for Kingston upon Hull North.

Amendment 5 is a probing amendment to test the nature of consultation. The Secretary of State is committed to consultation on the social and environmental focus of the English portion of the funds before making changes to the causes that could be supported by the scheme via secondary legislation. Labour supports the need for consultation: we want to ensure that it is carried out thoroughly and properly, but also promptly. Progress on expanding the dormant assets scheme has been slow over the years. The scheme has worked well, but given that it was set up in 2008, it has taken a long time to come forward and be expanded. We want to make sure that more good causes can benefit more quickly, so we do not want further delays, which is why we support a quick, broad-based consultation when there are proposals to bring new assets forward. We think that the consultation should conclude no longer than three months after it has been announced.

We are also conscious that “social and environmental causes” could mean a number of different things to different people. It could be argued that the lobbying work of a political think-tank could be defined as advancing a social or environmental cause and so, too, could the spending of a Government Department, but I think we would all agree that those would not be appropriate uses of this money. To clarify those issues, amendment 5 requires that the Secretary of State uses the consultation period to define criteria for future uses of the fund, and publishes and keeps to those criteria. We agree that specific causes should be decided upon based on consultation and responding to need, but those decisions can be focused and guided by set principles that will ensure that inappropriate causes are not set up to benefit by the Government of the day, whoever they may be.

Labour is conscious that the four organisations that have so far benefited from the scheme in England, which are Big Society Capital, Access—the Foundation for Social Investment, the Youth Futures Foundation and Fair4All Finance, have all done a really good job. We want those organisations to be able to continue carrying out their important work, so can the Minister assure us that in the event of the Government making future changes to how the money should be spent, those organisations would have nothing to fear, and can he put on record that the broad aims of the scheme remain the same?

I also want to address Government amendment 1. We are disappointed that the Government are proposing to remove the sections relating to community wealth funds. The amendments that were made in the Lords allow the Secretary of State to include community wealth funds—

Photo of Nusrat Ghani Nusrat Ghani Conservative, Wealden

Order. We are moving on to amendment 1 later. Do you want to wait for that discussion?

Photo of Jeff Smith Jeff Smith Shadow Minister (Digital, Culture, Media and Sport)

I thought we were doing amendment 1 as part of this group.

Photo of Jeff Smith Jeff Smith Shadow Minister (Digital, Culture, Media and Sport)

I beg your pardon; I thought we were debating them all together. In which case, I will—

Photo of Peter Grant Peter Grant Shadow SNP Spokesperson (Europe), Shadow SNP Deputy Spokesperson (Treasury - Chief Secretary)

I feel a bit of a charlatan: after debates on 28 and a half clauses, we finally come to a vote, but it is on something that, ethically, I should not vote on, because it applies to England only. I will make a couple of comments by way of friendly advice to colleagues from all sides of the House before they consider this amendment and others.

First, as the hon. Member for Manchester, Withington mentioned, a fixed amount of money is available to distribute, so any additional purposes can only be implemented if the existing purposes get less money. Allowing new organisations to bid for money can only mean existing organisations run the risk of less funding. That does not mean that that should not be done, but we need to understand the implications. Secondly, it is important to distinguish between the good purposes for which the funding is used and the interests of the organisations that will either deliver the services or administer the funds. Understandably, someone involved with an organisation will think that organisation is the best in the universe at doing a particular thing, but that will not always be the case; there may sometimes be circumstances where a different organisation could deliver the benefits more effectively.

As I say, I do not intend to vote on clause 29 or any of the amendments. I am quite happy now to sit back and watch my friends from England decide on the best way for England to copy the excellent practice that has been in place in Scotland and Wales for a number of years.

Photo of Nigel Huddleston Nigel Huddleston The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

I thank the hon. Members for Pontypridd and for Manchester, Withington for tabling amendment 5. I hope to be able to reassure them that the Bill, as introduced, already broadly accomplishes their desired effects, and therefore that the amendment is not necessary. I also appreciate the comments from the hon. Member for Glenrothes, who highlights that Scotland does indeed have greater flexibility at the moment. One purpose of the Bill is to rectify that, so that England can also have some flexibility in how future moneys are disbursed.

I should probably give the warning, or caveat, that while we all expect—in fact, we are very confident—that large amounts of money will be raised through the expansion of the scheme as proposed in the Bill, we of course cannot commit 100% that entities will receive a certain amount of money. We do not currently know how much will be distributed. No individual entity can bank on having a specific amount, although historically the scheme has raised more money than forecast. We cannot plan on that, but I think we are all confident that significant amounts will be raised.

I will give a brief overview of how the scheme works, in the context of amendment 5. The current system works by industry participants voluntarily transferring funds to the dormant assets reclaim fund, the body that administers the scheme, which reserves 40% of these funds in order to meet any future customer claims, with the remaining 60% of surplus then released for social and environmental purposes via the National Lottery Community Fund, the named distributor of dormant assets funding in the UK. It apportions the money among the four nations and then distributes it in line with legislation and any directions given to it by relevant Ministers or Departments.

The devolved Administrations can decide on the focus of their funding so long as it is within the parameters of social or environmental purposes, as the hon. Member for Manchester, Withington mentioned. In England, expenditure is ringfenced for initiatives focused on youth, financial inclusion and social investment through section 18 of the 2008 Act. Currently, funding flows from the National Lottery Community Fund to four independent specialist organisations that work across the three areas. Clause 29 introduces new section 18A to be inserted into the 2008 Act, replacing the current section 18, as the hon. Member for Pontypridd mentioned, which will enable the Secretary of State to consult on the purposes of the English portion and to then set the purposes through an order.

Amendment 5 has three core objectives: first, that there should be considered thought behind choosing the future purposes of dormant assets funding in England; secondly, that the public should be consulted before those purposes are set and should be able to have their say on the logic behind the purposes; and thirdly, that the consultation should not push progress into the long grass but must be proportionate and efficient. I understand the intent of the amendment.

Over the last decade, the scheme has been working to level up the communities that need it most,, supporting frontline organisations to tackle deprivation, developing strong social infrastructure and initiatives at local level, and directing funding to some of the most left-behind areas of the country. Those are some of the broad criteria by which the scheme has distributed funds in England. Those principles have operated successfully within the overarching three purposes set for the English portion to date: tackling youth unemployment and financial exclusion and investing in the nation’s charities and social enterprises. Part of the unique strength of the scheme in England is that the funding has been distributed through four specialist organisations. Within the boundaries of appropriate governance systems, those independent organisations have been free to determine the most impactful and appropriate ways to deliver on their missions, including deciding what criteria to apply and when. We are proud of the impact they have had, and echo the numerous supportive comments made by hon. Members on Second Reading.

The scheme has built a compelling evidence base for these types of intervention and we are committed to ensuring that it continues to benefit the people and communities who need it most. We are also committed to affording everyone a fair opportunity to have their say on the purposes for which funds can be distributed. Proposed new section 18A(6)(a) of the 2008 Act provides that the Secretary of State must consult the public about

“the purposes for which, or the kinds of person to which” the English portion should be distributed before an order can be laid. The first of those consultations will be launched as soon as possible after Royal Assent; we estimate that it could be as early as this summer. The Government will set out our thinking in that consultation document, and we are committed to inviting all those with an interest to have their say.

In the other House, noble Friends of the Member for Manchester, Withington pressed the Government for a commitment to open the first consultation for at least 12 weeks. We agree that is a proportionate amount of time and have already committed to that. I assure hon. Members that we share the ambition to ensure that the money is released as efficiently as possible. We have no intention of delaying the impact we all want the scheme expansion to have. I am grateful for the spirit of collaboration the House has shown in helping us to achieve that ambition. For the reasons I set out we are not able to support the amendment.

Photo of Jeff Smith Jeff Smith Shadow Minister (Digital, Culture, Media and Sport)

I thank the Minister for his comments and his reassurance that the Government will continue to uphold the principles and “unique strength” of the current ways of working. Given those assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Nigel Huddleston Nigel Huddleston The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

I beg to move amendment 1, in clause 29, page 22, line 12, leave out subsections (2) to (4).

This amendment removes provisions relating to community wealth funds that were added to the clause at Report stage in the Lords.

Photo of Nusrat Ghani Nusrat Ghani Conservative, Wealden

With this it will be convenient to discuss amendment 3, in clause 29, page 22, line 37, at end insert—

“specifically consult on the merits of establishing a community wealth fund or funds under the dormant assets scheme, and”.

This is a probing amendment intended to ensure the scope of any Government’s proposed consultation process also encompasses full consideration of the merits of establishing a community wealth fund or funds under the dormant assets scheme.

Photo of Nigel Huddleston Nigel Huddleston The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

I acknowledge the support expressed by many in the House for using the English portion of dormant assets funding to support, through community wealth funds, the left-behind communities, which experience high levels of deprivation and low levels of social infrastructure. Amendment 1 is not intended to disregard the support for that approach; instead, it is designed to protect the integrity of the consultation process, which offers the most appropriate route to make that a reality.

I thank the right hon. Member for Kingston upon Hull North for tabling amendment 3, seeking a commitment to consult on community wealth funds. I thank hon. Members for taking the time last week to meet me, alongside local trusts, to discuss the proposal. We are content to place on the record our commitment that the first consultation under this clause, which will be launched as soon as possible after Royal Assent, will explicitly include community wealth funds as an option to consider for the English portion.

The scheme has spent the last decade working to tackle systemic social challenges and to level up communities who need it the most, particularly by targeting and benefiting left-behind areas. In England, the impact is delivered through four independent organisations that distribute funding to tackle youth unemployment and financial exclusion, in addition to growing a thriving social investment market. To date, more than £465 million from the scheme has been invested in charities and social enterprises, often in areas or communities that may not have benefited from sustained investment in the past. For example, the growth fund is a £46 million partnership between the National Lottery Community Fund, Big Society Capital and Access. It has significantly expanded the reach of investment to charities and social enterprises that are unlikely to have taken on social investment before. The largest number of investments have been made to target support for vulnerable young people, those not in employment, education or training, and people experiencing poverty, financial exclusion and long-term unemployment. A quarter of all growth fund investments have been in the most deprived 10% of neighbourhoods.

We are aware that dormant asset funding is entirely dependent on industry participants who voluntarily transfer money into the scheme, as well as the general public’s trust in the principles that underpin it. We have received calls from the public and industry participants to have a say in how funds can be spent in England in the future. We are committed to affording them this opportunity through public consultation. The insertion of community wealth funds into the Bill risks pre-empting a consultation outcome by identifying a different approach for English expenditure before the public, the civil society sector, parliamentarians and industry participants in the scheme are able to utilise the opportunity to have their say.

The current causes of youth, financial inclusion and social investment have had widespread support over the last decade and were selected through a consultation in 2007. It would not be right to name any new cause in legislation before we consult on doing so. We will ensure that community wealth funds are included as a clear option to consider in the consultation we will launch following Royal Assent, which could be as soon as this summer. During this process, we will be keen to hear from everyone, including local communities and those who advocate for community wealth funds. A consultation lasting 12 weeks represents a proportionate amount of time for the issue at hand. Should it be determined that the community wealth funds are the best use of some of the English portion, the Bill is already designed to provide the most appropriate avenue to make that a reality.

While we are committing to including community wealth funds as an option in the consultation, we have said and will reiterate that we will not predetermine the outcomes. The Government amendment will ensure that the consultation remains an open and fair opportunity for people to have their say in how this important funding stream can have the best impact in England.

Photo of Jeff Smith Jeff Smith Shadow Minister (Digital, Culture, Media and Sport) 10:30 am, 11th January 2022

I thank the Minister for his comments. We are disappointed that the Government are proposing to remove the subsections relating to community wealth funds. The amendments made in the Lords that allow the Secretary of State to include community wealth funds as recipients of funding had cross-party support and have generally been welcomed by the sector.

The provisions specify that money from the dormant assets scheme can go toward a community wealth fund to

“support the provision of social infrastructure to further the wellbeing of communities suffering from high levels of deprivation”.

I am surprised that the Government want to remove a measure that empowers communities and surely goes to the heart of the alleged levelling-up agenda. There are Members on both sides of the Committee who represent areas that will benefit from this kind of initiative. The most deprived areas often have the weakest third-sector capacity and infrastructure, which adds to a cycle of disadvantage. Community wealth funds aim to halt that cycle. They are aligned with the aims of the levelling-up agenda and have the potential to transform communities and lives.

Community wealth funds give real power to local people to support local priorities and capacity building. The noble Lord Bassam, who moved the amendment, said that

“the proposal could act as a powerful tool in boosting deprived areas, putting small sums of money in communities’ hands so that they can invest in the facilities or services that would have the most local benefit—perhaps subsidising a community hall, running adult learning classes, supporting skills and training hubs and sports facilities, and improving digital connectivity.”—[Official Report, House of Lords, 16 November 2021; Vol. 816, c. 168.]

We see the amendment as part of the levelling-up agenda and a way of empowering communities, as well as an opportunity to trial new and innovative ways of funding.

I note that the amendment itself was a compromise. It simply allows the Secretary of State to include community wealth funds. In Committee in the Lords, there was a more substantial proposal to include local trusts. Because the Government said there was still work to do on the proposals, the amendment was passed, and it is essentially permissive. The decision on when to move forward is with the Secretary of State, which makes it all the more disappointing that the Government want to block what I think is quite a modest and sensible measure.

I thank the Minister for his comments on the consultation. I am grateful for his commitment that the community wealth fund will be an option to consider in that first consultation; that is good news. However, we believe that this is an important measure, and we would like to see the principle of it written into primary legislation. As my hon. Friend the Member for Pontypridd said, the principles of this Bill and the 2008 Act are generally too broad to guarantee that the community wealth fund is included; the principle must be framed in primary legislation. I therefore urge Members to reject the Government’s amendment, notwithstanding the welcome comments from the Minister on the consultation.

They always say that the first rule of politics is to learn to count. I appreciate that the Opposition might not defeat the Government on this one, so as a greater compromise, I also urge Members to support the cross-party amendment, which I think the Minister has effectively accepted as the right way forward. I leave it to my right hon. Friend the Member for Kingston upon Hull North to speak to her amendment.

Photo of Diana R. Johnson Diana R. Johnson Chair, Home Affairs Committee, Chair, Home Affairs Committee

It is a pleasure to serve under your chairmanship, Ms Ghani. I rise to oppose Government amendment 1 and commend amendment 3.

As we know, Government amendment 1 removes the provisions to create a community wealth fund as a means of tackling deprivation and building social infrastructure in left-behind communities. The Bill was amended in the other place to include those specific provisions. As we know, that amendment enjoyed significant cross-party support, including from Lord Hodgson from the Conservatives, Lord Bassam and Baroness Lister from Labour, Baronesses Kramer and Barker from the Liberal Democrats, Baroness Bennett from the Greens, and the Lord Bishop of Ely.

I oppose Government amendment 1 for two reasons. First, the Bill, as a piece of primary legislation, is an excellent opportunity to set out clearly not only the mechanism for the acquisition of dormant assets, but some of the priorities for their distribution. It is worth noting, as my hon. Friend the Member for Manchester, Withington just set out, that the clauses inserted by the other place are permissive, allowing the Minister and the Government if they so wish to enable the creation of funds to be established for community wealth funds.

That helps to set out the current thinking of this Parliament—that we recognise the importance of community wealth funds, and that we would like to see Government investment in that area. If the distribution of dormant assets is not identified with clear markers at this stage in proceedings, after so many years of discussion and debate, that would be a missed opportunity.

I do not believe that the Minister is correct in claiming that secondary legislation is the most appropriate mechanism for deciding on the distribution. We all understand that there is limited opportunity for debate on secondary legislation, and there is, of course, no opportunity to amend it. That means Parliament’s role will be limited to rubber-stamping the Government’s proposals.

With the expanded scheme expected to generate close to £1 billion of new funds for good causes, decisions about those causes are important and should be subject to proper debate and scrutiny in Parliament, rather than just introduced in secondary legislation. I know that Members across the House will want an opportunity to make the case for funding for their own constituencies and for many other good causes—of course they will; of course we all will.

I would argue that the creation of a community wealth fund is a matter of some importance to the Government themselves, with their levelling-up agenda for the most disadvantaged and left-behind areas. We hear so much about that from the Government, and it is really in their interest to have that on the face of the Bill.

There is, of course, a precedent here. It should be noted that the first causes to benefit in England—social investment, financial capability and projects for young people—were all written into the original 2008 Act. I therefore believe that it would be beneficial to keep provisions relating to the community wealth funds in this Bill to make clear what the money will be used for, and that it is the clear will of Parliament. I know the Government do not want dormant assets to be used to supplement their day-to-day spending, but without direction and clarity in the Bill, that could be one unintended side effect. We need a very clear direction of travel, which clause 29 currently provides.

The second reason I oppose the Government’s amendment to remove the provisions for a community wealth fund is that any consultation process on how assets should be distributed could take some time. In his opening remarks, the Minister referred to the summer and talked about a 12-week consultation period, so it seems likely that the rest of 2022 will be gone before we get to the point of any secondary legislation being brought to Parliament.

If the Government really are serious about their levelling-up agenda, keeping the provision for community wealth funds in the Bill is an opportunity that helps the Government. The community wealth fund commands broad support. Polling research shows that the proposal would have support among senior leaders in the financial services industry, whose endorsement the Government have said is key. Were the fund to remain written into the Bill, the Community Wealth Fund Alliance could start the process of securing match funding and planning to get money into the most left-behind communities as soon as possible after Royal Assent.

I ask the Minister to reconsider on the basis of those arguments. I genuinely believe that this measure would assist the Government with one of their flagship policies.

I move on to amendment 3, in the name of my hon. Friend Paul Howell, my co-chair of the all-party parliamentary group for “left behind” neighbourhoods. If amendment 1 is passed, amendment 3 offers an alternative approach, as it would require the Government to

“specifically consult on the merits of establishing a community wealth fund”.

As drafted, the Bill was silent on the purposes that the cash from this next wave of dormant assets would be spent on. As we know, the Government estimate it could be as much as £900 million. As I just set out, that lack of clarity contrasts very clearly with the original legislation, the Dormant Bank and Building Society Accounts Act 2008. The causes that would be supported—social investment, financial inclusion and projects for young people—were very clear in that legislation, so it makes sense to me, given the amount of money at stake and the enormous contribution that the dormant assets scheme will make to good causes, that the matter of where the money is spent should be debated in and ultimately determined by Parliament.

In response to efforts to assist the Government by putting in the Bill powers to establish pilot community wealth funds, the Minister is arguing that the Bill should not cover the specifics and set out the purposes that the funding should be directed to, and that such important detail should be left to the secondary legislation, albeit informed by public consultation. I note what the Minister has committed to do. He said that the community wealth fund would be a part of the first round of consultation, but I would like to push him a little further. Will he meet me and the others who are advocating the establishment of a community wealth fund halfway? Amendment 3 is probing at this stage. I am not going to force the issue to a vote today, but I want to test the Minister further on whether he might be minded to include the community wealth fund as a named and clearly identified object category in that first consultation by putting it in the Bill, if not at this stage, perhaps on Report.

The noble Lord Parkinson, the Under-Secretary of State for the Department for Digital, Culture, Media And Sport in the other place, said

“the Government will consider including community wealth funds in the first consultation launched under Clause 29.”—[Official Report, House of Lords, 16 November 2021; Vol. 816, c. 192.]

The Minister has reiterated that commitment today, but I would like a bit more reassurance from him. I hope we might be able to persuade him to go one small step further and to confirm that it would be written into the Bill, which would be really helpful. That would give those of us in the House who have advocated for this proposal a great deal of comfort, and I think it would be a really popular measure for the Government. It is clearly established as a principle that dormant assets should be used for good causes—in other words, for voluntary and community action, independent of the state—and the voluntary and community sector has already signalled its support for the community wealth fund.

Over 400 charities and community groups are part of the alliance co-founded by Local Trust that advocates for this proposal. Many of those 400 civil society organisations are part of the alliance not because they believe that their charity or cause will benefit but because they are concerned to see greater equity in the way that charitable and other resources are allocated, and they want to ensure that the most deprived communities—those that persistently lose out—have the opportunity to improve the areas in which they live and their own quality of life.

The organisations supporting the community wealth fund proposal are also often advocates for community control of resources, because it builds community confidence and capacity and seeds civic institutions. Such institutions leave a lasting legacy in neighbourhoods that previously lacked them and that, as a result, often missed out on earlier funding and other opportunities. Research by the all-party parliamentary group for “left behind” neighbourhoods found that there are almost three times fewer registered charities per 100,000 population in such neighbourhoods than there are across England as a whole, and just over half the number found in other equally deprived neighbourhoods. These communities also receive fewer grants than other deprived areas and England as a whole, despite higher levels of deprivation and need.

As I am sure the Minister is aware, the community wealth fund proposal also has the support of over 40 local or combined authorities and mayors, including Durham County Council, Birmingham, Newcastle, Peterborough, Kingston upon Hull, Thanet, Pendle, the Liverpool City Region Combined Authority and the Mayor of Greater Manchester. That illustrates its salience and the belief that these tiers of government have in the potential of the proposal to turn around the most deprived wards within them.

Furthermore, the views of the financial services industry are important in determining which causes benefit. After all, the industry is providing access to the cash, and the scheme is voluntary. Financial institutions can choose to participate or not, as the Minister said. Happily, we know from polling research commissioned by Local Trust that community wealth fund investment has the support of senior leaders from across the financial services industry. Some 78% said that new causes, or a mix of new and existing causes, should benefit from the expanded scheme, and 93% of those who said that held that cash should be invested in the country’s most deprived neighbourhoods to enable communities to develop the services and facilities that would make them better places to live.

Finally, I want to point out the support that the proposal has from my colleagues in the all-party parliamentary group for “left behind” neighbourhoods, and the cross-party support for amendment 3. Based on their experience and knowledge of their constituencies, as well as the group’s own research and testimony from local residents, the members of the all-party parliamentary group are confident that a community wealth fund or funds is exactly what is required to turn around the most left-behind neighbourhoods and to improve the prospects of some of the people across the country who feel most cut off and forgotten. That is of course a priority for the Minister’s Government, because it is what levelling up, as I understand it, has to be about.

I look forward to hearing whether I have been able to persuade the Minister to accept amendment 3. That would give great reassurance to those of us who care about this matter that the Government are serious about committing to community wealth funds.

Photo of Nigel Huddleston Nigel Huddleston The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport 10:45 am, 11th January 2022

As I mentioned earlier, this may be an area where we share the intent and end goals but disagree, albeit slightly, on the route by which we get there. I hear what the right hon. Lady is saying and I appreciate the work that she and others have done with the APPG. I have met many members of the APPG, and I appreciate their work, but I hope that the Committee is reassured to hear the commitments that I have made today, including on an explicit option on community wealth funds in the consultation, which will launch as soon as possible after Royal Assent. I know that the right hon. Lady is asking for that to be on the face of the Bill, but I hope she is reassured that the commitment I have made is on record. As I have noted, depending on the passage of the Bill and its commencement, the consultation could be launched as soon as this summer and will be open for 12 weeks.

We have heard the strength of feeling, both here and in the other place, about the community wealth fund and the important proposal to assess it when determining the best use of the English portion under the scheme. We agree that it should be given due consideration, not only by the Government but by the public and the industry participants that underpin the scheme’s success, but we do not believe it is appropriate to include it in the Bill. We have consistently committed to the consultation being fair and open, and we have reiterated the importance of not pre-empting the outcomes.

The scheme has enabled long-term systemic change to be effected in tackling youth unemployment and financial exclusion and growing a thriving social investment market to support our nation’s charities and social enterprises. Those causes have enjoyed public, civil society and industry support for the past decade, and it would not be right to name any new cause in legislation before we consult them on doing so.

Although we cannot accept amendment 3 for those reasons, I hope I have provided sufficient reassurance about our commitment to ensure that community wealth funds will be given full consideration. I therefore hope the right hon. Member for Kingston upon Hull North will be minded not to press the amendment and that hon. Members will support the Government’s amendment.

Question put, That the amendment be made.

Division number 1 Dormant Assets Bill [Lords] — Clause 29 - Distribution of dormant assets money for meeting English expenditure

Aye: 10 MPs

No: 6 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 10, Noes 6.

Question accordingly agreed to.

Amendment 1 agreed to.

Photo of Jeff Smith Jeff Smith Shadow Minister (Digital, Culture, Media and Sport)

I beg to move amendment 4, in clause 29, page 22, line 41, at end insert—

“18B Distribution of money for meeting English expenditure: Requirement to report annually

(1) The Secretary of State must lay before Parliament an annual report detailing how dormant assets money has been distributed in England.

(2) The first report under subsection (1) will be laid 12 months after—

(a) any restriction imposed under section 18A(1)(a) of that Act comes into force, or

(b) the provision in section 18A(1)(b) of that Act comes into force,

(3) A report under subsection (1) must include—

(a) how much dormant assets money has been distributed,

(b) the causes to which money has been distributed, and

(c) the Secretary of State’s assessment of the value for money of the expenditure.”

This amendment would require the Secretary of State to report annually on how monies from the Reclaim Fund have been spent in England, including an assessment of the value for money of this spending.

This is another probing amendment, and would require the Secretary of State to report annually on how moneys from the Reclaim Fund have been spent in England, including an assessment of the value for money of the spending. The Labour party believes in the values of transparency and good value for money. Annual reporting on the spend would help to demonstrate whether the funds were being used effectively and for good causes, as intended. It would allow better scrutiny of which causes were being supported and the impact they were having. It could also help to inform future changes that the Secretary of State might want to make through secondary legislation, and would clearly show what is being delivered in practice. We urge the Minister to take this suggestion on board.

Photo of Nigel Huddleston Nigel Huddleston The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

I thank the hon. Member for Manchester, Withington for the amendment and his contributions to the debate so far. As numerous reports are already conducted on the distribution of dormant assets funding, including annual reports from the National Lottery Community Fund and each spend organisation in England, I hope to reassure the Committee that amendment 4 is not necessary.

To date, in England, dormant assets funding has been distributed through the National Lottery Community Fund to four independent specialist organisations. The spend organisations’ operations are regularly reviewed by the Oversight Trust, an independent organisation that ensures accountability and transparency around each of the spend organisations’ activities. The Oversight Trust commissions quadrennial reviews of each organisation to examine their effectiveness in delivering against their respective missions.

As the main distributor of dormant assets funding across the UK, the National Lottery Community Fund already publishes annual statements on the impact of the scheme, alongside annual reports conducted by each of the spend organisations and the quadrennial reviews published by the Oversight Trust as the parent body. There are also annual reports by Reclaim Fund Ltd, the scheme’s administrator. Another review will be published as part of the overall scheme within three years of the Act passing and every five years thereafter. That is on top of the annual reporting I have outlined.

We feel that that is the most appropriate route to avoid placing repetitive, cumbersome and unnecessary further requirements on the organisations entrusted with dormant asset funding. With that explanation of the existing reviews, I hope the hon. Member will withdraw the amendment.

Photo of Jeff Smith Jeff Smith Shadow Minister (Digital, Culture, Media and Sport)

I thank the Minister for his comments and I appreciate the fact that he has outlined the number of reviews that currently take place and the excellent work of the Oversight Trust and the various organisations involved. The Bill does give Parliament flexibility in terms of a way forward. We think that these reports should directly inform Parliament, which is why we proposed annual reports to Parliament. However, having listened to the Minister’s comments and assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 29, as amended, ordered to stand part of the Bill.