In 2008 there was cross-party support for the proposal of establishing a Reclaim Fund to receive amounts left dormant in UK bank accounts for over 15 years.
The Dormant Accounts Act 2008 agreed the mechanism by which dormant accounts could be voluntarily handed over by banks operating in the UK. The Act specified that the Barnet formula would be used to designate funds between the home nations for devolved authorities to utilise. It was specified in the Act that the English funds would be used for three purposes: youth services, financial inclusion and to establish a social investment wholesaler.
When the Coalition Government came into office in 2010, David Cameron announced that the Government would be initially directing all Dormant Accounts money to establish a Big Society Bank (subsequently named Big Society Capital (BSC)). The founder Chair of BSC was Sir Ronald Cohen who had chaired the Social Investment Task Force (2000-2020) and the Commission on Unclaimed Assets which had advocated the need for a Social Investment Wholesaler to provide capital to help grow the social sector in the UK.
BSC was launched in 2012 and subsequently in 2014, John Kingston was asked to lead Access – the Foundation for Social Investment which was established to enable smaller charities and social enterprises to develop their enterprise models and access social investment.
In January 2018 the DCMS Minister for Sport and Civil Society, Tracey Crouch, announced that £280 million from dormant accounts would be allocated to initiatives in England to help disadvantaged young people into work, provide housing for families and vulnerable people, and tackle problem debt. £135 million would be provided to BSC and Access for social investment; £90 million to be invested in support of projects to tackle youth unemployment; and £55 million to financial inclusion and capability issues. In August 2018, the government announced that the funding streams for youth and financial inclusion would each be delivered by new, independent organisations. This builds on the success of the model of independent organisations which can operate with a long-term vision and genuine autonomy demonstrated by both BSC and Access.
An independent and open appointment process was carried out to identify the founding chairs of each of these new organisations. Joe Montgomery and Richard Collier-Keywood were appointed as the Executive Chairs of the two organisations, founded as Youth Futures Foundation and Fair4All Finance respectively. Both organisations have developed the necessary systems and controls required for NLCF to enter into funding agreements with them.
In March 2019, the Chair of BST (Clare Tickell) was approached by DCMS with the suggestion that BST could consider expanding its role from overseeing BSC and Access to a bigger role overseeing the new entities being established to receive Dormant Account monies.
The BST Board agreed with DCMS the outline of a proposal to do this in July 2019, establishing a quadrennial independent review process to assess the effectiveness of each OpCo in delivering against their respective missions including their social impact.