The Northern Ireland Dormant Accounts 10m - the scandal of missed opportunity

03 October 2017

The Northern Ireland Dormant Accounts Funds – a scandal of missed opportunities 

In 2008 the Dormant Bank and Building Societies Act enabled UK banks and building societies to voluntarily hand over funds held in accounts and which had remained untouched or claimed for 15 years or more to a special Reclaim Fund.

This special Reclaim Fund in turn distributes a portion of these dormant accounts across the four countries of the United Kingdom; Northern Ireland, Scotland, Wales and England using the Barnett Formula.

The current value of the dormant accounts fund accrued for Northern Ireland is £10.1 million.

When elected in 2010, the then Conservative Prime Minister David Cameron pledged to use the dormant accounts funds for England to make new finance available to dynamic social organisations.

In April 2012 with £600 million a new social finance organisation, Big Society Capital, was created as a wholesale financial institution – which would distribute its funds through intermediaries who in turn would finance voluntary, community and social enterprise organisations.

Big Society Capital was founded as an institution independent of government, and as a transparent body that would aim to be self-sufficient – meeting its running costs through return on investments.

In addition to making investments Big Society Capital has supported and engaged in what could be called market and infrastructure development for social finance.

Initiatives such as the Access Foundation ( and the Good Finance website ( have been developed.  These seek to develop knowledge and capacity around the use of repayable finance and support the bridging of the gap between the supply and demand of different types of social finance.

In 2016 alone, Big Society Capital made almost £600 million in investment deals and it should be noted that their investments are matched by a multiple of more than 2 from other funders/investors.

In England, with Big Society Capital at its core and as a result of political action and policy development there is now a dynamic infrastructure of social finance organisations providing a range of social finance products and accompanying investment readiness support attuned to the differing  needs of social sector organisations.


For example – Big Society Capital made a £1m investment plus provision for a further £1 million over commitment in a body called Resonance for a Community Share Underwriting Fund.

Resonance is a specialist financial institution which helps social enterprises raise finance and maximise their community impact.

Community Shares are an effective way of engaging ordinary people with local community enterprises which they have a connection with. Community Shares are used for community enterprises including amongst others, pubs, shops, renewable energy, community buildings, local food initiatives.  Community share offers are launched with a target amount to be raised and the Resonance underwriting fund can advance up to 50% of the target amount.  Having a share offer underwritten by a specialist finance institution is a vote of confidence in the social enterprise and boosts confidence amongst the retail investors – the ordinary community members – that the enterprise wants to buy its shares. Underwriting a share offer can allow a project to get up and running more quickly and is a creative and innovative use of the dormant accounts funds.

In fact policy development and implementation has progressed even further in GB this year with the work of the Commission on Dormant Assets – this has identified up to £2 billion from such things as unclaimed pensions and insurance policies which can also potentially be put to use to support community action.

Dismally, here in  Northern Ireland, almost 10 years after the Dormant Bank and Building Societies Act and with more than  £10 million of funds at stake – nothing has happened, is happening, or seems likely to happen. The current lack of an Executive is no excuse for the inertia of the past or the lack of decision and action now and in the future.

It seems that here, rather than engage and work with those organisations in the social finance space to make  best possible use of the £10m dormant account funds to develop the market, provide support to organisations and catalyse/enable new finance products – the political system would rather support the disgraceful situation were £10m of accessible funding remains dormant.

It is appalling that with a sector in crisis, and with many organisations trying to develop their future sustainability that a £10 million fund languishes in a bank account somewhere earning pitiful interest instead of being deployed to support positive change for people and places across this region.

This is an intolerable situation that should not be permitted and action must be taken.

In 2012 Building Change Trust along with local social finance organisations UCIT and Charity Bank launched research into the action needed to develop social finance in Northern Ireland and we then set out our views on what needed to be done.

Revisiting these 5 years later the needs and actions remain the same but support for the actions has been piecemeal and limited.

The £10 million dormant account funds for Northern Ireland will not and cannot solve the range of problems facing our voluntary, community and social enterprise sector.  

Achieving positive social change through income generation is not for everyone and therefore repayable finance cannot be for everyone also.

However, in the context of social finance development here, a £10 million fund deployed correctly and strategically is a hugely significant sum.

As we prepare to finish our work and wind up in late 2018, our experience in managing our own  £10 million grant fund over the past 9 years is that a fund with a sharp focus, acting on existing needs and future opportunities could make a massive difference.

For example , along with UCIT and the Belfast Charitable Society we worked in 2016 and 2017 to create the Building Better Futures Fund  - this is now a £1 million fund that provides unsecured loans of between £1,000 and £25,000 to social sector organisations right across Northern Ireland. It’s working, the funds are in demand, the loans are being made and already being repaid and more importantly the organisations in receipt of them are able to get on with their valuable work right across this society.

We believe there is an immediate need to now bring forward proposals and arrange the disbursement of the dormant accounts funds for Northern Ireland without further delay.

The key actions should focus on the following

  1. A regional programme of investment readiness support for the VCSE sector in Northern Ireland over at least a 5 year period and building on the best knowledge and learning that programmes as the Big Potential and Power to Change initiatives have done in Great Britain.
  2. The distribution of funds to local community development finance institutions such as UCIT and Charity Bank to both enhance existing availability of standard repayable finance products but also to facilitate the growth of newer products such as unsecured lending for smaller amounts and other innovations.
  3. The support for the development of new forms of social enterprise in Northern Ireland with an explicit focus on the cooperative community benefit society model. This structure can raise funds through public share offer and for example a fund to underwrite and/or match such share finance raised on a £1 per £1 basis up to a suitable limit would further stimulate developments.
  4. Match funding challenges to the social finance sector/ charitable trust organisations to raise funds or to pool existing investments in to more accessible finance for the sector, and work to encourage charitable Trusts to look at their investments/grant making and consider how their funds could be used differently.

In the absence of an Executive at present and for what looks like the foreseeable future, we call upon the Permanent Secretary of the Department of Finance to find a way to release the dormant account funds so that appropriate actions can be taken and investment  made into our communities.