Commission on Unclaimed Assets

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Commission on Unclaimed Assets

• Senscot/CUA Event
• 20 October 2006
• Toby Eccles

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Introduction

• Unclaimed Assets
• The Commission
• Initial findings
• A Social Investment Bank
• Work in progress

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Unclaimed Assets
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What are Unclaimed Assets?

• Lost money
• Left untouched in bank and building society
  accounts for long periods of time
• 15 years dormancy period agreed by Treasury and
  the banking sector
• 1 in 3 people think they may have a dormant
  account
• 400 million or more is thought available
• US, Ireland, Australia, New Zealand, Spain
  already have frameworks in place for dormant
  accounts to benefit society
• The Labour party made a manifesto pledge to put
  such a framework in place in the UK

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Underlying principles

• All parties agree
• Account holders must always be able to claim
  their money back, including any interest due,
  regardless of when they come forward.
• A campaign should be run to reunite people with
  lost assets
• Judging by international precedent, many people
  will be reunited with assets they had previously
  lost

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The Commission
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The Commission

• Independent commission set up at the initiative
  of the Scarman Trust
• Chaired by Sir Ronald Cohen, Commissioners drawn
  from a variety of expertise - third sector,
  banking, consumer protection, journalism
• Observers from three government departments and
  banking and building society trade bodies
• Independently funded by charitable foundations
• Primary focus on maximising social benefit

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Process

• Commissioned the Young Foundation to analyse need
  across the UK
• Initial consultation with voluntary and community
  sector, funders, government and academics
• Considered how best for the Third Sector to use
  the opportunity of Unclaimed Assets
• Published initial findings and ideas as a
  consultation paper in early July 2006
• Full consultation running from publication
  through to 1 December
• To draw together evidence, ideas and submissions,
  publishing February/March 2007

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Initial Findings
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State of the third sector

• Consultation with the third sector, particularly
  amongst small to mid sized organisations, reveals
  a picture of chronic underinvestment
• Grant funding is declining, and will not be
  enough for the sector to realise its ambitions
• Restrictions are often perverse, and lead
  organisations away from mission
• Funding often fails to cover core costs, and is
  for short periods of time
• Management is typically underpaid and
  overstretched
• Funds not available for new product development
  or organisational growth

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Change on the horizon

• Potential for government service delivery
• Transfer of assets into local or community
  ownership
• Need to develop sustainable income streams
• Blurring of charitable and commercial sectors
• How can this be effectively supported?
• More sophisticated and flexible funding
• Technical support and capacity building
• Leveraging in of commercial or other funding
  streams

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Emerging social economy

• Availability of other finance is slowly
  increasing
• Charity Bank
• Futurebuilders Scotland
• Social Investment Scotland working through CDFIs
• BIG Lottery Growing Community Assets fund.
• Scotland UnLtd
• But there are significant funding gaps
• quasi-equity (grant with support) for social
  enterprises
• funding for product development or geographic
  expansion
• relevant business support and capacity
  development
• A social investment market is beginning to emerge

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A Social Investment Bank
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Considerations

• Endowment unlikely to have a significant impact
• Low flow of funds into sector in comparison to
  need
• No long term structural impact
• Wasted opportunity
• Spend the capital over a shorter period of time
• Potential for the pressure to spend resulting in
  poor funding decisions
• When its gone its gone, again it lacks legacy
  or long term impact
• potential to create further perverse incentives

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Social Investment Bank

• Grow supply of social investment capital
• Capitalise and support present effective social
  investors
• Equity grants, quasi equity, guarantees, loans
• Connect to mainstream investment, potentially
  using tax credits
• Fill funding gaps e.g. quasi equity
• Expand demand for social investment
• Develop programmes for specific
  priorities/opportunities
• Partnerships with revenue or commercial funders
• Package products and relevant technical support
• Support the development of relevant services
• Advisory, syndication, capacity building

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Example Opportunities

• Development of stable income streams
• Investments made through present intermediaries
• Technical support and equity investment
• Repayments made as percentage of new revenue
  stream
• Transfer of land and buildings to community
  organisations from local government
• Support new/present intermediary to package
  advice, development grants, financial
  structuring, and support in finding partners
• Investment in social enterprises
• Could capitalise specialist intermediary to fill
  this gap
• Potential for debt capital to be raised on top of
  the equity

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Potential impact of Social Investment Bank

• Develop the overall social investment market
• Leverage in commercial or other capital where
  possible
• Maximising impact
• Connecting social market with commercial finance
• Enable the development of an enterprising,
  entrepreneurial social sector

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Work in Progress
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Consultation

• What is money needed for? What are the
  capacities, assets and ambitions of organisations
  across sectors.
• What forms of funding, finance and support are
  available in Scotland? Barriers to access, unmet
  additional support needs.
• What are the market opportunities? Caused by
  market failure, policy direction or social need.
• What tools do Social Investors need to take
  advantage of these opportunities?
• How does an SIB enable this whilst keeping itself
  small and light.

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How you can help

• Thank you for filling in our questionnaire
• Find out more about us
• Commission on Unclaimed Assets
• London Metropolitan University
• 31, Jewry Street
• London EC3N 2EY
• www.unclaimedassets.org.uk
• toby_at_unclaimedassets.org.uk