Britain to tap $1 bln of ‘dormant’ cash for social and green projects

Britain’s financial watchdog has announced that it has widened the range of “dormant” assets, or money in financial firms’ accounts to tap a potentially extra 880 million pounds ($1.12 billion) to fund social and environmental projects in a cash-strapped economy.

The dormant cash refers to money in bank and building society accounts untouched for at least 15 years and where efforts to trace the owner have proved unsuccessful.

The financial firms can voluntarily transfer the cash to an authorised reclaim fund for distribution, though a traced owner of the money can reclaim it.

Since 2011, the UK Dormant Assets Scheme (DAS) has unlocked more than 745 million pounds ($948.68 million) for social and environment initiatives, from over 1.35 billion pounds in dormant bank and building society accounts, the Financial Conduct Authority said in a statement.

The expansion of the scheme is estimated to potentially unlock a further 880 million pounds, the FCA said. While Britain spends over a trillion pounds a year, every penny counts for the new Labour government dealing with tight public finances.

“The Government has estimated that around 240 million pounds in total will be made available from the expansion of the DAS to fund social and environmental initiatives.”

Following a public consultation, the FCA on Friday said the scheme will be widened to include dormant investment assets and money held on behalf of a client, in scope.

“Our proposals should result in an increase of funds being released to support good causes from investment assets and client money assets that are transferred to the DAS,” the FCA said in its final policy statement.

“At the same time, our proposals should enable customers who have a right to reclaim dormant assets to do so without delay or difficulty, thereby securing an appropriate degree of protection for consumers.”

($1 = 0.7853 pounds)