UK banks and building societies have finally agreed in principle that
unclaimed assets in dormant accounts be redistributed for community
projects.
The government had been pushing the sector on the issue for two years
with only limited progress. However, the institutions have now accepted
a general definition of a dormant account, and have said they are
prepared to donate funds from such accounts.
Although more discussion is needed between the Treasury and financial
services companies, Gordon Brown, the chancellor of the exchequer, is
expected to give more detail on how redistribution might work at the
time of his budget speech in the spring. The government favours a
central ‘co-ordinated delivery mechanism’ to hand out the funds for
education, social exclusion and volunteering services for young people.
Brown said in his pre-budget speech that he had reached ‘an agreement
with banks and building societies that unclaimed assets held in bank
accounts will, once realized, be put to use to improve youth and
community facilities’. His pre-budget report, however, acknowledges
that the government needs to ‘consult further on the detail’.
Banks and building societies say the ‘agreement’, as it stands, amounts
to little more than an initial consensus on defining ‘dormant accounts’
as those untouched by customers for 15 years. They emphasize that
beyond this nothing concrete has been agreed – and even some technical
details of the 15-year definition need clarification.
Ian Mullen, chief executive of the British Bankers’ Association, said
that dialogue had been constructive but there were still many details
to finalize. Treasury estimates based on the definition indicate
several hundred million pounds may be available for redistribution
through a central body.
In a separate development, a Commission on Unclaimed Assets was set up
last month by the UK-based Scarman Trust with backing from eight large
charities, among them the Carnegie Trust. The commission will look at
the best use of unclaimed assets when they are finally released, and
has said it will produce a report in June.
