COMMITTEE FOR FINANCE AND PERSONNEL

Dormant Accounts Bill

25 June 2008

Members present for all or part of the proceedings:
Mr Mitchel McLaughlin (Chairperson)
Mr Roy Beggs
Mr Simon Hamilton
Mr Fra McCann
Ms Jennifer McCann
Mr Adrian McQuillan
Mr Declan O’Loan
Mr Peter Weir

Witnesses:
Mr Michael Daly )
Mr Neil Lambe ) Department of Finance and Personnel
Ms Brenda Shearer )

The Chairperson (Mr McLaughlin):
We are joined by Michael Daly, head of central expenditure division, Brenda Shearer, from central expenditure division, and Neal Lambe, principal legal officer in the Departmental Solicitor’s Office. You are most welcome. I apologise for the delay. I invite you to make some opening comments, and then we will open up the floor for discussion. The paper from the Department of Finance and Personnel (DFP) and the letter from the Consumer Council are contained in members’ packs.

Mr Michael Daly (Department of Finance and Personnel):
I appreciate that the Committee is pushed for time. We provided a brief paper in advance of the meeting, and as there have been two previous briefings I do not intend to go into the detail of the proposals again unless there are specific issues that we can pick up on.

Our objective today is to update the Committee on what has happened since our previous briefing session on 27 November 2007 and to outline the next steps in implementing the scheme here.

The motion of legislative consent was passed by the Assembly on 27 November 2007. The Bill completed all its stages in the House of Lords in February 2007, and five amendments were made to it. Two of the most significant amendments are: expanding the small banks and local scheme to include all building societies; and giving Parliament a role in approving directions to the Big Lottery Fund, including that of the devolved Administrations. We do not yet have a date for the Bill’s Second Reading in the House of Commons, but, in the meantime, we are moving ahead with the development of priorities here.

The banks have begun the reuniting exercise, and we are engaged in a pre-consultation exercise to develop the draft priorities for consultation. First, we are canvassing Departments for their views on the priorities. Some external stakeholders have shown a particular interest in the scheme by contributing to the earlier Treasury consultation on the scheme, and a few organisations have approached us directly to become involved. Indeed, some Departments have suggested particular groups that should be involved in this stage of the development process.

Although the Committee will have an opportunity to provide its views on the priorities later in the year, we welcome any views that the Committee might have at this stage. We plan to end the pre-consultation stage around the end of June or beginning of July, and, over the summer, we will develop a consultation paper on the priorities. Then, we will subject that paper to public consultation in the autumn, which will include consideration of section 75 issues. The results will be used to inform priorities, which, with the agreement of OFMDFM, will be brought to the Executive for approval. With a fair wind, distribution of moneys should begin in late 2009 or early 2010. I am happy to take questions.

Mr McQuillan:
If money is handed over from a dormant bank account and the account holder turns up five year’s afterwards looking for their money, who reimburses them?

Mr Daly:
There will be a reclaim fund associated with the scheme. Moneys will be handed over to the reclaim fund. One of the important principles of the scheme is that it preserves the right of the individual to reclaim their money. If an account holder dies, the money will go to their estate.

A mechanism for calculating the amount of incoming money is being constructed. However, if someone reclaims funds, the organisation that was allocated those funds will not lose funding.

Mr McQuillan:
Will that be a separate fund?

Mr Daly:
Yes.

Ms J McCann:
It is worth mentioning that the Consumer Council conducted a superb campaign to reunite customers with their money. Given the recent credit crunch and the economic difficulties faced by society, people are attending local constituency offices to seek information. Sending out a letter to people would, perhaps, be a useful exercise.

Mr Hamilton:
I am somewhat concerned. However, I do not want to talk down the work of organisations that are, unfortunately, caught in a funding merry-go-round. Peace funding and European funding — which we will discuss later — are prime examples of people chasing money constantly from various sources. I hope that people are reunited with as much of their money as possible. However, I want the remainder to be allocated to major large-scale projects, rather then community-focused ones, because there are other funding streams for such projects.

The spending of the money will be determined by the definition of the phrase “social and environmental purposes”. Can money be allocated to infrastructure projects such as those in public transport, which have an environmental and infrastructural aspect?

Mr Daly:
I do not know whether my colleagues have any further information on the situation in other jurisdictions. However, whether large or small projects are involved, we must examine the direction in which we are going because, apart from targeting specified areas, deciding on the delivery mechanism will be important in order to deliver an effective programme. Indeed, that is one of the reasons for using the Big Lottery Fund; there is an existing mechanism for delivery on structures and specific programmes within certain priorities. The point about using major projects as a delivery mechanism has been made before, but I am not sure whether there is any information on infrastructure-type projects.

Ms Brenda Shearer (Department of Finance and Personnel):
Nothing has been mentioned to date. However, the area is outside the public expenditure control system and, therefore, there is no reason why the money cannot be spent on capital or resources.

Mr Hamilton:
Does it depend on the Executive’s priorities?

Mr Daly:
No. The key factor is that the Big Lottery Fund would have to demonstrate that the programmes being funded are additional. Furthermore, it would be required to produce an annual report. That could be where we would come into difficulties with respect to infrastructure projects.

Mr Hamilton:
Yes, it would depend on the scale of a project. Funding could not be allocated to fund a portion of an existing project — it must fund a separate project entirely.

Mr Daly:
That appears to be the correct direction.

Mr Beggs:
The Big Lottery Fund will, probably, carry out the distribution. Has there been any further clarification on the labelling of the scheme, because several groups in my community have been averse to accepting lottery money because of the gambling aspect. For example, organisations such as the YMCA frequently work with young people.

Has any further information become public about a mechanism that might allow such groups to feel comfortable about applying for lottery funding?

Mr Daly:
As I understand it, the delivery mechanism will not be branded as lottery funding. The Big Lottery Fund understands that. There is a clear recognition of the concerns of some individuals. Not only will it not be branded, but the money will be kept distinctly separate from lottery funds, and that is important.

Mr Beggs:
Finally, I see that the money has been identified as being for “social and environmental purposes”. Are young people’s projects not a priority?

Ms Shearer:
Young people were identified in the English priorities, but Northern Ireland, Scotland and Wales can set their own priorities. Wales has made young people and climate change its priorities.

Mr Beggs:
However, paragraph 4 in your briefing paper states:

“the Scheme provides a general definition of “social or environmental purposes” on which unclaimed assets may be spent.”

Where in that paper does it say that young people are a priority?

Mr Daly:
I assume that they would be included in the social strand.

Mr Neil Lambe (Department of Finance and Personnel):
In England, the specification of youth services as a priority sits under an overarching theme of social or environmental purposes.

Mr Beggs:
Thank you. As a matter of interest, what were the other priorities?

Mr Lambe:
In England, the other priorities were financial inclusion and capability and social investment.

Mr O’Loan:
Do officials have any knowledge of the banks’ efforts to reunite people with their dormant accounts and their success in doing so? Even when this system is set up, we should not forget that the fundamental responsibility for attempting to reunite people with their money should rest with the banks.

Mr Daly:
We do not have any specific details of that.

Ms Shearer:
The Consumer Council has provided figures from its campaign. It said that the campaign has been successful. Initial information from the Treasury suggests that the banks’ reunification scheme has also been successful. There is a website — www.mylostaccount.org.uk — which is a one-stop shop for tracing accounts.

Mr O’Loan:
Good. Are officials able, and willing, to get information from the Northern Ireland banks and building societies on that matter?

Mr Daly:
We will find out whether it is possible to do that, and we will get back to the Committee.

The Chairperson:
Will you write to the Committee with that information?

Mr Daly:
I do not know whether we will be able to get that information, but I will see whether we can.

The Chairperson:
Will the subordinate legislation come to this Committee?

Mr Lambe:
Yes. The Order, within which the Department will specify the funding priorities for Northern Ireland, will come before the Committee for consideration as an affirmative statutory regulation before being laid before the Assembly.

The Chairperson:
One detail that the Committee might be interested in is whether, given the current pressures caused by economic difficulties, it will be possible to use the funds — when we reach the point of distributing them — to provide relief for people who have been driven into the poverty trap?

Mr Daly:
I suppose that anything is possible within the terms of the scheme, providing that it not additional funding for an existing project.

Mr Beggs:
According to your best estimate, when will the scheme be open for applications?

Mr Daly:
The scheme will be open in late 2009 or early 2010. That may seem a long way off. The Bill might be expected to receive Royal Assent by the end of this year, but an awful lot of other legislation must go through in order to give effect to the various strands of the scheme.

The Chairperson:
We will certainly see you in the meantime, by the sounds of it. That seems to be it. Thank you very much, Michael, Neil and Brenda. This was a brief session, but it provided a useful update. I apologise, again, for having kept you waiting earlier.