UK financial institutions have given a lukewarm response to calls to
redirect cash in dormant bank accounts to projects that tackle social
and financial deprivation.
For two years the UK chancellor of the exchequer Gordon Brown has urged
banks voluntarily to redirect the billions of pounds in dormant
accounts to good causes, with the veiled threat that they may be forced
to do so if their response is poor.
However, EP has discovered that a Brown-backed foundation set up in the
spring of 2004 to allow banks to channel money from dormant accounts to
charities has received cash from just two institutions. The Balance
Charitable Foundation for Unclaimed Assets refuses to name the
companies or reveal how much they have released from dormant accounts,
but one of them is understood to be an investment bank.
When the foundation was set up, it announced it was holding discussions
with seven or eight investment banks, but now says only that ‘two or
three’ may be in a position to contribute money by the end of the year.
A foundation spokesman told EP: ‘Some of the banks are a bit coy about
this issue because to admit you have dormant accounts can be perceived
in some quarters as bad practice.’
Although the foundation has concentrated on investment banks, which
have far less money in dormant accounts, the Treasury has been working
behind the scenes on retail banks, and Brown is expected to raise the
issue again in his pre-budget report expected next month.
The amount in dormant accounts, largely in the names of people who have
died or cannot be traced, is thought to be between £5billion ($9.1bn)
and £20bn. The British Bankers’ Association, which has private
reservations about the idea, is talking with the government and will
not comment during those negotiations.
The foundation was set up by a group of individuals, including Sir
David Cooksey, a non-executive director of the Bank of England, with
help from charities – and is endorsed by Brown. Its first programme
will fund projects for older people across the UK with grants of
£50,000 to £100,000 phased over up to five years.
