Amendment to the bill is dropped

Charities have failed in a bid to divert dormant bank account cash to help struggling communities.

Organisations including the Charity Tax Group and Acevo urged the UK government to create a community wealth fund to support communities financially on the back of Brexit and latterly covid.

But the government has now removed an amendment to the Dormant Assets Bill that would have allowed money raised to be used in this way.

The bill looks to expand the current dormant assets scheme to include the insurance, pension, investment, wealth management and securities sectors potentially meaning many more millions for the third sector.   

Nigel Huddleston, the charities minister, said the government will run a consultation once the bill has royal assent on making community wealth funds a possible use for dormant assets. 

Jeff Smith, the Labour MP for Manchester Withington, said: “I am surprised that the government wants to remove a measure that empowers communities and surely goes to the heart of the alleged levelling-up agenda. 

“The most deprived areas often have the weakest third-sector capacity and infrastructure, which adds to a cycle of disadvantage. Community wealth funds aim to halt that cycle. 

“We see the amendment as part of the levelling-up agenda and a way of empowering communities, as well as an opportunity to trial new and innovative ways of funding.”