Wednesday 20 May 2020 8:13 pm

Government seizes £150m from dormant bank accounts for Covid-19 response

The government is raiding dormant bank and building society accounts across the UK to help fund its response to the coronavirus crisis.

Roughly £150m will be seized to help charities, social enterprises and vulnerable individuals during the pandemic, culture secretary Oliver Dowden said today.

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This includes £71m that will be sourced through the government’s dormant assets scheme, which donates money from accounts that have been inactive for 15 years to good causes.

The remaining £79m has already been recouped and will be diverted to help charities’ coronavirus response and recovery, the government said.

The funding will be used to support charities tackling youth unemployment and to expand emergency loan access for civil society organisations.

It will also be used to improve the availability of credit to people in vulnerable circumstances.

“This funding will support organisations that are at the heart of their communities, building on our unprecedented package of financial support for the voluntary sector,” Dowden said.

“Through our proposals to further expand the dormant assets scheme, we want to unlock hundreds of millions more pounds for good causes, while keeping customer protection at the heart of the programme.”

Among the recipients of the funding will be Big Society Capital, which will receive £45m to help provide emergency loans to charities, social enterprises and some small businesses facing cashflow issues during the pandemic.

Meanwhile £65m will be deployed to Fair4All Finance to support affordable credit providers to increase access to fair, appropriate products and services for people struggling financially.

The government is currently consulting on expanding its dormant assets scheme, which was launched in 2011.

Thirty firms, including all major high street banks, have transferred more than £600m to good causes through the scheme.

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Ministers have emphasised that the money is only transferred when the account holder cannot be contacted after repeated attempts, while consumers are able to reclaim funds they later discovered to have been donated through the scheme.

John Glen, economic secretary to the Treasury, said that potentially millions of pounds in additional funds could be access for the UK’s coronavirus response by expanding the scheme.