The former Labour leader of Brighton and Hove City Council inflicted a parliamentary defeat on the government after urging ministers to grasp a chance to boost their goal of “levelling up”.
Steve Bassam, known as Lord Bassam of Brighton, led a debate about “dormant assets” which lasted almost three hours this afternoon (Tuesday 16 November).
The dormant assets include unclaimed money in bank and building society accounts. Parliament is debating a proposed change in the law – the Dormant Assets Bill – to include inactive insurance policies, pensions and other types of savings and investments.
Lord Bassam called on the Conservatives to help grassroots local projects by using dormant assets – worth hundreds of millions of pounds – to create a community wealth fund.
Tory junior minister Stephen Parkinson, also known as Lord Parkinson of Whitley Bay, dismissed Lord Bassam’s proposal, saying that it was unnecessary, lacked detail and pre-empted a consultation on the subject.
But peers inflicted a defeat on the government by backing the move aimed at using dormant assets to bolster deprived areas.
The House of Lords supported Lord Bassam’s amendment by 216 votes to 195 – a majority of 21.
The amendment would enable ministers to trial community wealth funds to help grassroots projects in poorer communities and allow for a review of the effectiveness of the pilot schemes over several years.
Supporters argued that the amendment supported the government’s levelling up agenda – and ministers have not ruled out the use of community wealth funds.
But they said that they did not want to pre-empt the outcome of a consultation on future spending priorities.
The Dormant Assets Bill would extend an existing scheme that could generate an extra £880 million for good causes.
The bill would also give ministers the power to bring further assets into the scheme and remove some restrictions on how funds are given out to good causes in England.
The scheme’s key principles give priority to trying to trace and reunite people with their money, while an owner can reclaim funds at any point – and participation by companies is also voluntary.
Lord Bassam, a Labour shadow minister, said: “My argument is simply that the proposal could act as a powerful tool in boosting deprived areas, putting small sums of money in communities’ hands so that they can invest in the facilities or services that would have the most local benefit – perhaps subsidising a community hall, running adult learning classes, supporting skills and training hubs and sports facilities, and improving digital connectivity.”
He added: “We see this amendment as part of a levelling up agenda and a way of empowering communities, as well as an opportunity to trial new and innovative ways of funding communities.”
His proposal had support from Conservative, Liberal Democrat and Green peers as well as crossbenchers – those who do not belong to a political party.
Lord Parkinson, who was political secretary to Theresa May when she was Prime Minister, said: “The community wealth fund model could be one way in which to meet the priorities that have been outlined … but it is demonstrably not the only approach that could be taken.”
He added: “We acknowledge that the core features of it – community decision-making at a hyperlocal level and investment in social infrastructure – have an important role to play in improving access to opportunities for everybody, particularly those in the more deprived communities.
“We think that there is more work to be done in this area before a commitment can firmly be made.
“Further work is needed to establish how it would work and whether dormant assets funding would be the right type of money to support it.
“That is why we feel that it is too soon to commit to including it as an explicit option in legislation in the way that this amendment proposes.”
Lord Bassam said: “I agree with the minister that we need sustainable long-term funding models. Some of those already exist but this would add to and empower local communities in a very specific and direct way.
“It would not be top down but bottom up. It would enable communities to thrive and do much to tackle the long-outstanding needs of some of those communities which are obviously in urgent need of levelling up.”
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