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February 25, 2009

Dormant Bank Accounts

It’s difficult to find out what’s happening to the decision about the money in dormant bank accounts – seems to have gone into private conclave between govt and the Lottery – this is worrying! LPL submitted an excellent proposal that Scotland’s 20 poorest communities should each receive a £2m endowment

Change the direction of travel – invest in community led regeneration.
Paper by LPL

The consultation being led by Scottish Government on how Scotland’s share of the dormant bank accounts should be spent and the associated the debate that is has stimulated across the Third Sector is to be welcomed. This financial windfall presents a unique opportunity for Scotland to fundamentally challenge and improve upon existing orthodoxy in terms of how to tackle the deep rooted and enduring challenges in Scotland’s most deprived communities.

This proposal is based on the following propositions concerning Scotland’s community regeneration policy over the past 25 years :

* That despite a succession of targeted, area based regeneration initiatives over this period, the baseline indicators of improved outcomes for the people living in these communities show that little meaningful progress has been achieved
* That these initiatives can be characterised as being, without exception, top-down and led by the local authority in partnership with other public sector bodies.
* That these initiatives result in programmes of short term funding for community based projects that are not able to sustain themselves beyond the end of the regeneration scheme.
* That despite the evidence that this top down, short term investment approach has failed to make a sustained impact, the same approach with minor modifications, has been applied repeatedly ever since New Life For Urban Scotland in the early 1980’s.
* That regeneration policy and practice in Central/Lowland Scotland has failed to recognise the value of lessons learnt in the Highlands and Islands of Scotland in relation to the potential impact of community ownership and control and the importance of linking social and community development with economic growth.

The annual turnover of Scotland’s Third Sector is approximately £2.5 billion. In relative terms, £40m is a small amount of money and there is a real danger that if it is committed along existing patterns of expenditure, it will generate little in terms of overall impact and additional value.

It could however be used in such a way that would both signal the start of a new era in the regeneration of our most deprived communities, and provide the Government’s current policy commitment on community empowerment with a flagship initiative that would reinforce its devolutionary credentials.

The proposal – to establish community endowments

The £40m should be used to establish a £2 million endowment fund in twenty of the most deprived communities in Scotland (the index of deprivation that is used should include a rural component) under the ownership and control of a community owned regeneration vehicle. Each endowment would be set up as a legal trust and managed by a team of professional fund managers contracted to work with a nominated local anchor organisation. Each community would enter negotiations with the awarding body (BIG Lottery) as to which local anchor organisation should assume the role of ‘accountable body’ for the endowment. The nominated local anchor organisation and the management arrangements for the endowment would be subject to rigorous due diligence, with a requirement that reporting on investment decisions and any disposal decisions with regard to the income generated, have to be wholly transparent and publicly accountable.

If implemented, this proposal would fundamentally change the framework within which local regeneration could take place. It would:

* provide the community with a long term income stream that is not dependent on the continued patronage of a grant provider
* change the dynamic of the relationship between the community and other stakeholders . The power imbalance created by the ‘begging bowl’ culture would become less significant.
* enable the community to take their place at the ‘partnership table’ as a genuine partner with a financial stake to contribute towards common objectives
* enable the community to assume greater control in determining what local priorities it chooses to address
* increase levels of community self confidence and local capacity as the sense of controlling more of their own destiny grows

Underpinning this proposal is the principle that the people who live in a community are best placed to lead any process of change or renewal that occurs within that community and should always be given the opportunity to do so. Furthermore, inherent in this proposal is a recognition that when local people are presented with this type of opportunity, a hitherto untapped pool of creative energy and local commitment and effort can be harnessed and channelled towards the overall regeneration effort.

As supporters of Local People Leading – The Campaign for a Strong and Independent Community Sector, we endorse this submission to the Scottish Government Consultation on Dormant Bank Accounts