Consultation outcome

Government response to the technical consultation on the design of a Community Wealth Fund in England

Updated 25 September 2025

Ministerial foreword

Stephanie Peacock MP and Miatta Fahnbulleh MP

This Labour government was elected on a promise to deliver change, and empower communities so they can deliver the future they want.

We are committed to shifting power and resources, back to where they belong. Alongside the Pride in Place strategy and the Fair Funding Review, funding local government based on need, we are now launching the Community Wealth Fund; a new £175 million initiative to transform neighbourhoods with long-term financing. This fund will complement the Pride in Place programme and Pride in Place Impact Fund, following the same principle of putting communities in the driving seat to make changes that reflect their priorities and ambitions. This Labour government is taking bold action to give power to those with the skin in the game so communities can drive the change they want to see.

As part of that, we are committed to delivering changes that people can see and feel in their local community in every part of the country by zeroing in on 3 changes; thriving places, stronger communities, and putting people in control.

The Community Wealth Fund is a novel initiative that receives its money from the Dormant Assets Scheme – a unique partnership between government and financial services firms that puts unclaimed money to good use. It has already unlocked £1 billion to support good causes throughout the United Kingdom and the Community Wealth Fund will build on this significant success. This government recently published the Dormant Assets Scheme Strategy, which outlined that the Community Wealth Fund will receive £87.5 million from the next £440 million tranche of dormant assets funding, and we are delighted that The National Lottery Community Fund – our delivery partner – is matching this with a further £87.5 million for the programme.

The money will go where it is needed most, with each area getting between £1 million and £2.5 million over ten years. Communities will be able to identify where they want the money to be spent and make decisions about how resources should be used. Our focus will be on neighbourhoods of between 5,000 and 15,000 residents facing challenges of high deprivation and low social capital and infrastructure: areas experiencing the most entrenched social and economic challenges. Here, communities will receive support to build up local assets and the structures, systems, people and skills to tackle persistent social challenges and take full advantage of their strengths. This fund will complement the Pride in Place Programme.

The Community Wealth Fund is dedicated to empowering communities; supporting residents to identify their needs and make informed decisions about their neighbourhoods’ future, and giving them the tools to develop local partnerships and achieve their goals. With its extensive experience and commitment to funding local groups, the National Lottery Community Fund is well-positioned to make sure that all beneficiary communities across England are equipped for success.

This funding also represents a further step in advancing this government’s core missions at the neighbourhood-level: accelerating growth through funding social infrastructure projects, breaking down barriers to opportunity through creating opportunities for people to get involved in their local community and creating safer streets through local initiatives that will enhance community cohesion. By placing resources and decision-making powers directly in the hands of local communities, it helps to weave the vital social fabric – the places, spaces and networks - that nurtures relationships, strengthens communities and fosters vibrant, resilient local economies.

On behalf of the government, we would like to thank everyone who contributed to the consultation.

Stephanie Peacock MP
Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Minister for Sport, Tourism, Civil Society and Youth)

Miatta Fahnbulleh MP
Parliamentary Under-Secretary of State Ministry of Housing, Communities and Local Government (Minister for Devolution, Faith and Communities)

Executive summary

The Community Wealth Fund offers an exciting opportunity for resident-led action in communities across England. It will empower local people with long-term funding pots to invest in what is best for their community.

At the end of 2023, a technical consultation was launched to gather views on the programme’s design. The consultation received 114 written responses, which included research, evidence and learning from current and past community programmes. These responses have helped shape the key design principles of the Community Wealth Fund and plans for its delivery. The government is grateful to all who took the time to share their views.

A community wealth fund is a pot of money given to local communities to spend over the long term – in this case ten years – on what they decide will improve where they live. The Community Wealth Fund programme will target communities that are facing socio-economic challenges and lack social infrastructure (the spaces and places, organisations and connections that support shared civic life), which leaves them doubly disadvantaged. Through patient funding, backed up by wrap-around support to develop local skills and capacity, the Community Wealth Fund will empower and create new opportunities for these communities. This investment will be a critical step in delivering the government’s Missions to communities in need, making sure impact is felt at the neighbourhood level. This includes launching initiatives that will break down barriers to opportunity and building the foundations for growth at the neighbourhood-level. It will also build communities’ confidence and skills to get involved with other communities initiatives the government is offering in their areas.

Alongside the £87.5 million the Community Wealth Fund will receive from the £440 million expected to flow into the Dormant Assets Scheme by 2028, as outlined in the Dormant Assets Scheme Strategy, we are pleased to announce that The National Lottery Community Fund (TNLCF), the delivery body for the Community Wealth Fund, is contributing an additional £87.5 million of Lottery funding to the programme. Funding and support for communities will be available over a ten-year period, giving them the long-term, stable investment needed to deliver locally identified priorities.

The voluntary nature of the Dormant Assets Scheme means that participating firms can transfer as little or as much funding as they see fit on an annual basis. Due to these variable flows of funding into the Scheme, the government is not able to predict how much dormant assets funding will be available after 2028 to make further investment into the Community Wealth Fund. This does not prohibit additional dormant assets funding being released to the Community Wealth Fund in future, on top of the £87.5 million, if it becomes available.

The government will be working with TNLCF to make sure the Community Wealth Fund programme is designed to achieve its core objectives:

• to improve social infrastructure in places with relatively high deprivation and low social capital;
• to empower local people to identify needs and make decisions on what is best for their community; and
• to contribute to reducing inequalities and poverty, and enhancing community cohesion.

Achieving the objectives of the Community Wealth Fund

To improve social infrastructure in places with relatively high deprivation and low social capital: each beneficiary community will receive between £1 million and £2.5 million over a ten-year period to address priorities and issues determined by local people (for example, visual improvements to the public realm, youth programmes, employment support, green space initiatives). This size of investment will enable communities to invest directly in the spaces and places, organisations and connections that support shared civic life, whilst also planning for how their area can be strengthened in the long-term, and realise the benefit from other community funding initiatives. Beneficiary communities will be given support to develop community-led plans for drawing down funding, making sure projects can deliver tangible benefits as well as long-term impact for local people.

To empower local people: local residents will be at the heart of Community Wealth Fund decision-making and delivery. Communities will be supported to develop the skills, capabilities and capacity to harness the present and future opportunities of the Community Wealth Fund for their neighbourhoods. TNLCF will use its extensive experience of funding community activities to make sure that all communities receiving funding from the Community Wealth Fund are set up for success, working in partnership with national and local organisations supporting community-led change, including the Community Wealth Fund Alliance.

To contribute to reducing inequalities and poverty, and enhancing community cohesion: the Community Wealth Fund will bring residents together to identify the priorities and needs of their neighbourhoods, and through local projects and activities. Through this, it will build connections between people and groups who might not otherwise meet, helping to foster a cohesive, strong local community and create safer streets. Additionally, the Community Wealth Fund will help break down barriers to opportunity by delivering targeted, local investment to communities experiencing the highest levels of deprivation and lowest social capital nationally, enabling an England-wide impact. The government will work with TNLCF as it develops a methodology for selecting these places. There will be flexibility in the population size of communities considered for the Community Wealth Fund, to ensure that places are not unnecessarily excluded. However, the Community Wealth Fund is designed to target neighbourhood-level communities, with the optimum size expected to be around 10,000 residents or fewer, but could range between 5,000 to 15,000. This will be informed by best practice, based on the local strategic fit and community need.

The Community Wealth Fund will complement the Pride in Place programme, which will deliver £5 billion of funding over the next decade into areas that are ‘doubly disadvantaged’ by both the highest deprivation levels and weakest social infrastructure.

Key design principles of the Community Wealth Fund

The technical consultation asked five key questions about how the Community Wealth Fund should be designed. The answers to these questions are reflected in the key design principles that will underpin the programme. The table below summarises the government’s position on the key design principles:

Design principles	Government position
Breadth versus depth of funding Should the Community Wealth Fund focus on supporting a smaller number of communities with larger pots of funding or a greater number of communities with smaller pots of funding?	The Community Wealth Fund will target a greater number of communities with smaller pots of funding. Each community will receive between £1 million - £2.5 million; this will be in addition to the capacity and capability support provided to communities by TNLCF.
Existing social infrastructure Should there be a baseline social infrastructure requirement for communities to be eligible for the Community Wealth Fund?	There will be no baseline requirement for existing social infrastructure in order to be eligible for Community Wealth Fund funding. TNLCF will ensure capacity building and wraparound support to communities so that they can develop the capacity and capabilities, alongside social infrastructure, to manage and deliver the funding.
Allocative or competitive distribution Should funding be allocated from the Community Wealth Fund, or should there be a competitive bidding process to determine which communities receive funding?	The Community Wealth Fund will allocate funding to communities identified by TNLCF, ensuring funding reaches those communities that are most in need.
How beneficiaries are selected How should beneficiaries be selected to receive funding from the Community Wealth Fund?	The Community Wealth Fund will target communities according to need, focusing on the most deprived places with the lowest social capital and social infrastructure, whilst ensuring there is a spread across England. The selection process will be developed by TNLCF.
Nature of local decision-making To what extent should communities be able to determine the best way(s) of meeting local priorities?	Communities will be given the greatest level of decision-making autonomy and will be free to determine the best way(s) of meeting local priorities. They will be guided with examples of initiatives that have been shown to work well.

Further to the above, in relation to dormant assets funding, which will be used to establish the Community Wealth Fund, the government will consider how this funding aligns with the additionality principle. This is the principle that dormant assets funding should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by a government department. The additionality principle remains central to the Dormant Assets Scheme and is integral to the design of the Community Wealth Fund. Ensuring robust governance and accountability is also central to the design of the Community Wealth Fund: this is why it will be delivered directly to local communities through TNLCF. As an arm’s-length body accountable to DCMS and Parliament, with extensive experience of working with communities and partners, delivery through TNLCF will ensure rigorous governance without adding layers of bureaucracy. This means that dormant assets funding can go directly to where it is most needed and be used by communities to deliver locally-identified priorities, once they have an approved, evidence-based plan in place and the skills necessary to deliver it.

A robust, but proportionate, evaluation structure will also be embedded into the design and delivery of the Community Wealth Fund. This approach should also capture its impact across England. The government therefore expects TNLCF to commission, publish and respond to an independent evaluation of the Community Wealth Fund and its delivery every four years, with the first report expected in 2029.

The government will now work closely with TNLCF as it develops the detailed design and aspects of the delivery of the Community Wealth Fund, alongside wider partners.

Key terms

Additionality principle	The principle of additionality is a central tenet of the Dormant Assets Scheme and critical to its success. It states that dormant assets funding should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by a government department.
Cause	The term ‘cause’ is used to refer to the broad purposes for which, or the kinds of person to which, a distribution of dormant assets money for meeting English expenditure may be made.
Community wealth fund	Defined in legislation as “a fund which gives long-term financial support (whether directly or indirectly) for the provision of local amenities or other social infrastructure.”
Dormant asset	A dormant asset is an identifiable and attributable item, valued as a monetary amount or able to be valued as such, which a participant is unable to reunite with its owner despite reasonable efforts. Section 1(6) of the 2022 Act summarises the dormant assets that are in scope of the Scheme currently.
DCMS	The Department for Culture, Media and Sport
MHCLG	The Ministry of Housing, Communities and Local Government
Industry participant	The term ‘industry participant’ is used to refer to organisations holding dormant assets that participate in the Scheme, according to the definitions set out in the 2008 and 2022 Acts.
The National Lottery Community Fund (TNLCF)	The named distributor of the Dormant Assets Scheme and a DCMS arms-length body. TNLCF receives the surplus dormant assets funding from Reclaim Fund Ltd (see below) and distributes it to the independent spend organisations.
The Oversight Trust	The independent organisation that oversees the work of the spend organisations that have been allocated dormant assets funding in England to date.
Reclaim Fund Ltd (RFL)	The Dormant Assets Scheme administrator and an HM Treasury arms-length body. RFL receives dormant assets monies from participants, reserves a portion to meet any customer reclaims, and transfers the surplus to TNLCF to be distributed to social and environmental causes.
The Scheme	The UK’s Dormant Assets Scheme
Social capital	The extent and nature of peoples’ connections with others and the collective attitudes and behaviours between people which support a well-functioning, close-knit society.
Social infrastructure	The spaces and places, organisations and connections that foster personal relationships, civic engagement and social networks, and therefore support shared civic life.
Spend organisations	Refers to the four independent organisations that have received dormant assets funding in England to date, and are overseen by The Oversight Trust. These are: Big Society Capital, Access - the Foundation for Social Investment, Fair4All Finance, and Youth Futures Foundation.

1. Background

The Dormant Assets Scheme is a unique and well-established partnership between government and financial services firms, allowing unclaimed money to be used for the public good. It enables responsible businesses to channel funds voluntarily from dormant assets to good causes, while ensuring owners’ rights are protected.

To date, Reclaim Fund Ltd (RFL), the Scheme’s administrator, has received over £1.9 billion of dormant assets from financial services firms. RFL reserves a portion to meet any reclaims and releases the rest to The National Lottery Community Fund (TNLCF), the Scheme’s distributor. This means that the Scheme has so far unlocked £1 billion for social and environmental causes across the UK and its expansion, into the insurance and pensions, investment and wealth management, and securities sectors, enabling a potential £880 million more to be released over time.

In March 2023, in response to the public consultation on dormant assets funding in England, the government announced that Community Wealth Funds would be added as the fourth named cause, alongside the 3 existing causes: youth, financial inclusion, and social investment wholesalers. The inclusion of community wealth funds received significant support from respondents to the consultation. These four causes were subsequently enshrined in secondary legislation in November 2023.

As announced in the Dormant Assets Strategy, the Community Wealth Fund will receive £87.5 million from the £440 million expected to flow into the Dormant Assets Scheme by 2028, with The National Lottery Community Fund (TNLCF), the delivery body for the Community Wealth Fund, contributing an additional £87.5 million of Lottery money.

Community wealth funds are defined within legislation as funds which give ‘long-term financial support (whether directly or indirectly) for the provision of local amenities or other social infrastructure’.^{[footnote 1]} The establishment of the Community Wealth Fund provides an opportunity to empower local people to make decisions regarding their communities and lives. By harnessing the unique characteristics of dormant assets funding, the government can help provide communities with the long-term, patient investment they need to help tackle some of the longstanding and complex issues they are facing today.

2. Overview of the technical consultation

2.1 Scope of the technical consultation

This technical consultation was intended to inform the design of the Community Wealth Fund to ensure that it is fit for purpose, capable of delivering dormant assets funding effectively and making the greatest possible impact in communities across England.

Specifically, it gathered views on:

• whether the Community Wealth Fund should focus on supporting a smaller number of communities with larger pots of funding or a greater number of communities with smaller pots of funding;
• whether a baseline level of existing social infrastructure should be required for places to be eligible;
• whether funding is allocated from the Community Wealth Fund or whether places competitively bid for funding;
• how beneficiaries are selected; and
• the nature of local decision-making.

It also asked for input on a variety of further considerations that will influence the way the Community Wealth Fund is delivered. These were: the role of the public sector, including how to ensure additionality; how it should be governed; how it should be evaluated; and how it might affect people with protected characteristics (in line with the Public Sector Equality Duty).

The responses received have informed the government’s approach to the key principles that underpin the design of the Community Wealth Fund. The government will now work closely with TNLCF as it develops more detailed aspects of its design and implementation.

The technical consultation and this government response apply to England only.

2.2 Technical consultation process

The technical consultation launched on 21 September 2023 and closed on 19 October 2023. It featured both a written consultation and online questionnaire.

The Department for Culture, Media, and Sport (DCMS) procured Alma Economics to analyse all the responses to the consultation.

2.3 Approach to analysis

The technical consultation received 114 responses. The majority (100) of these were submitted through the online questionnaire, while 14 responses were submitted via email. Every response was reviewed in full. The government is grateful to all those who took the time to share their views and influence the design of the Community Wealth Fund.

The technical consultation received 37 responses from individuals, 70 responses on behalf of organisations, and five responses from firms that were current or prospective industry participants of the Scheme. Two respondents chose not to declare on whose behalf they were responding.

The consultation questionnaire asked a combination of quantitative (e.g. Yes/No) and qualitative (open text) questions. Alma Economics provided a summary of responses to each question to help inform the government’s approach to each design principle; this included summary statistics from the quantitative questions and a thematic analysis of the qualitative questions.

3. Design principles

3.1 Response to small towns focus

The government recognises the concerns expressed by a significant proportion of respondents regarding its intention for the Community Wealth Fund in the first instance to target small towns of fewer than 20,000 residents, rather than support communities at the neighbourhood-level as originally intended. While not specifically a consultation question, approximately 20% of respondents expressed concern about the proposal that the Community Wealth Fund will specifically target small towns. The most common concern raised by respondents was that by focusing specifically on small towns those communities most in need will not be reached. The need for the place selection methodology to be evidence-based was also emphasised by respondents, who pointed to existing evidence that shows that focusing investment at the neighbourhood-level leads to greater success.

With this in mind, the government wants to ensure that the Community Wealth Fund is targeting those communities with the greatest need and will not be targeting small towns specifically. We will work with TNLCF as it develops a methodology for selecting places. We anticipate that the optimum size for communities receiving funding will be in communities of 10,000 residents or fewer, but could range between 5,000 to 15,000. There will be flexibility in population size to ensure no places are unnecessarily excluded. The methodology will be informed by best practice examples and lessons learnt from previous community-led programmes and TNLCF’s own extensive experience. TNLCF will also work with local areas to ensure that the shape and size of the community receiving funding is based on local strategic fit and community need, and is in addition to other government community initiatives such as the Pride in Place programme.

3.2 Breadth versus depth of funding

Summary government position: The Community Wealth Fund will target a greater number of communities with smaller pots of funding. Each community will receive between £1 million - £2.5 million; this will be in addition to the capacity and capability support provided to communities by TNLCF.

3.2.1 Summary of consultation

The government wanted to consider whether the Community Wealth Fund should prioritise breadth or depth of funding – for example, whether it is preferable for one community to receive a £10 million pot to spend (Option A) or ten communities to receive £1 million (Option B).

The government’s preferred approach, outlined in the technical consultation, was for the Community Wealth Fund to target a greater number of communities, with smaller yet still significant pots of funding (Option B). This would allow for more communities across England to receive funding, and would also allow the Community Wealth Fund to test differing approaches to community-led intervention in places that have a wide range of needs and characteristics.

3.2.2 Summary of responses

The majority of responses from individuals and organisations were supportive of the government’s preferred approach to support a greater number of communities with smaller pots of funding. Those responding on behalf of industry participants preferred bigger pots of funding to a smaller number of communities (Option A).

Respondents in favour of prioritising breadth over depth often noted its wider reach as the reason they were supportive. These respondents felt it would allow more areas across the country to benefit from dormant assets funding and aid the development of a robust evidence base for future community interventions by being able to test these in different contexts. It was also noted that smaller pots of funding can still provide strong support to communities, enabling them to unlock other forms of long-term funding and investment, rather than larger funding pots that may flood an area and generate only short-term positive impacts.

The most common theme from respondents in favour of Option A was that larger funding pots were required to achieve long-term change. Responses referenced the significant time and financial resources needed to support capacity building and the establishment of local partnerships that are critical to the success of interventions such as the Community Wealth Fund. Proponents suggested dormant assets funding would therefore be better spent in a smaller number of communities with access to larger amounts of funding. Responses from industry participants emphasised the need to ensure beneficiaries were given sufficient funding to be able to deliver meaningful change in their communities.

While some respondents argued that a maximum limit of funding from the Community Wealth Fund was difficult to set without further information on the size and location of beneficiary communities, a large proportion of responses indicated that communities should each be given somewhere between £1 million and £5 million. Respondents often cited previous funds, such as the Empowering Places and Big Local programmes, as examples of successful projects that achieved high impact change through similar levels of funding. Many respondents suggested therefore that the optimum amount of funding per community would be around £1.5 million over ten years. This amount was deemed sufficient to achieve meaningful, long-term change, while remaining easier to manage than larger pots of funding that some respondents felt communities may struggle to deploy effectively.

3.2.3 Government position

The government’s position is that funding pots of between £1 million - £2.5 million per community is the appropriate range to achieve the aims of the Community Wealth Fund. Based on community programmes with similar aims and a neighbourhood-level focus, we consider that this volume of funding will allow communities to explore a range of options for investment, and develop local projects that create a sustainable impact for their places. This funding will be in addition to the capacity and capability support provided to communities by TNLCF and complementary to other government community initiatives such as the Pride in Place programme.

The Dormant Assets Scheme is uniquely placed to be able to deliver long-term (10-years plus), patient investment to help drive beneficial and lasting change in those communities and neighbourhoods that are experiencing high levels of deprivation and low social capital. A significant benefit of the Community Wealth Fund approach is its potential to support the longer-term resilience of neighbourhoods by enabling them, through capacity building, to leverage investment from other sources, including public, private and philanthropic funding, as well as to generate new opportunities for community enterprise and asset development that can offer sustainable income streams. For example, an evaluation of 15 Big Local^{[footnote 2]} areas found that at least a third of these places have increased the £1.15 million initial investment by at least 50%.

The capacity building element of the Community Wealth Fund, designed by TNLCF, will support communities to grow the skills and capabilities required to bring in new and sustainable funding sources, creating a multiplier effect that will benefit the community beyond the ten-year lifetime of the award.

3.3 Existing social infrastructure

Summary government position: There will be no baseline requirement for existing social infrastructure in order to be eligible for Community Wealth Fund funding. TNLCF will ensure capacity building and wraparound support to communities so that they can develop the capacity and capabilities, alongside social infrastructure, to manage and deliver the funding.

3.3.1 Summary of consultation

‘Social infrastructure’ refers to the spaces and places, organisations and connections that foster personal relationships, civic engagement and social networks, and therefore support shared civic life.

Lessons from previous regeneration programmes show that the presence of local social infrastructure can enhance the benefits and longer-term success of interventions. The government therefore wanted to consider whether a low baseline level of social infrastructure or community assets should be present in order for a community to be eligible for funding from the Community Wealth Fund. The government’s preferred approach was not to set a requirement, as doing so could exclude the communities that the Community Wealth Fund is intended to target, and instead provide capacity-building as a central aspect of its delivery.

3.3.2 Summary of responses

The majority of responses from individuals and organisations were supportive of Option B (there should not be a social infrastructure baseline requirement), although there was a significant proportion of individual responses that were in favour of Option A (there should be a low baseline requirement). Industry respondents were split between Option A and Option B.

Respondents in favour of Option A reasoned that a basic level of social infrastructure would best ensure the success of community-led interventions. Some industry respondents also added that a baseline would provide reassurance that dormant assets funding would be well managed and spent appropriately.

Respondents who were supportive of the government’s preferred approach (Option B) highlighted the link between a lack of social infrastructure and greater levels of deprivation. They suggested that Option A would likely exclude those communities in greatest need, undermining the objectives of the Community Wealth Fund and perpetuating the disadvantages it is seeking to address. Supporters of Option B were also critical of the notion of a baseline, arguing that different areas have a diverse range of needs depending on the local context and therefore a ‘one size fits all’ approach to setting a social infrastructure baseline would be an unfair and arbitrary way to judge communities’ needs. Finally, some suggested that the initial funding granted to beneficiaries should be used to build local capacity and develop local partnerships, which aligns with the government’s approach to provide wraparound support to communities to ensure they can successfully deliver dormant assets funding.

A number of respondents noted that more information was needed regarding social infrastructure and that it was unclear what would qualify.

3.3.3 Government position

The government is committed to improving social infrastructure as one of the core objectives of the Community Wealth Fund. This will help deliver the government’s commitment to create thriving places through creating neighbourhoods that are healthy and safe, with access to a good range of amenities, services, green spaces and high-quality infrastructure. Evidence shows that the development of social infrastructure enhances social capital (i.e. trust, social networks and personal relationships) and has a range of positive economic, social and civic outcomes such as higher employment, improved wellbeing and quality of life, and greater social cohesion.^{[footnote 3]} There is also evidence to show that places with low social infrastructure (including civic assets, community engagement and connectivity) are falling further behind than other deprived areas.^{[footnote 4]}

Having considered the responses carefully, the government has concluded that the objectives of the Community Wealth Fund will be best met if there is no baseline requirement of existing social infrastructure in order to be eligible for funding. Places with some existing social infrastructure will not be excluded.

The government notes the concerns from some respondents that having no existing social infrastructure present in beneficiary communities may mean that the funding will struggle to have any significant impact. To make sure that all communities are set up for success, TNLCF will work with a range of partners to design and embed a programme of support for communities into the Community Wealth Fund model which will develop communities’ capacity and capability, alongside more intensive wraparound support where needed. A concerted focus on developing communities’ skills, experience, and knowledge will increase the likelihood of their being able to maintain improvements in the long-term. We also expect that the inception of the Community Wealth Fund in each community should begin by mapping the elements of social infrastructure that already exist in the places selected, even if this is very limited or does not conform to traditional ideas of what social infrastructure looks like. This is to ensure that the Community Wealth Fund is building from existent community strengths and assets and not duplicating work.

This capacity building phase is sometimes referred to as a ‘year zero’ approach, but we acknowledge the need for flexible timeframes and that some communities may need longer than others to be ready to draw down money for community initiatives.

We also note the preferences expressed, particularly from industry respondents, that as much dormant assets funding as possible should be directed towards beneficiaries and the causes they identify within their communities, rather than towards the development of local infrastructure or organisations. We have carefully considered the evidence from community practitioners about the success factors in achieving sustainable, community-led change and the importance of building local organisational capabilities and social infrastructure as part of this. By putting in place a programme of capacity building, and wraparound support where needed, TNLCF will be able to maximise the value of dormant assets investment in the Community Wealth Fund. This will ensure that all communities involved in the programme can develop strong plans and deliver on the priorities identified for their neighbourhoods.

Through ongoing relationship management with communities and monitoring, TNLCF will ensure that dormant assets funding is achieving value for money, particularly in places where social infrastructure is weak or non-existent. There will also be a significant opportunity for peer learning as part of the programme, including linking up communities at different stages of development to learn from one another.

3.4 Allocative or competitive distribution

Summary government position: The Community Wealth Fund will allocate funding to communities, ensuring funding reaches those communities that are most in need.

3.4.1 Summary of consultation

The technical consultation asked for views on whether the Community Wealth Fund should allocate funding to communities, or whether there should be a competitive bidding process to determine which communities receive funding.

3.4.2 Summary of responses

An overwhelming majority of respondents, from both individuals and organisations, were supportive of the government’s preferred approach that funding should be allocated to communities. Industry respondents were split between the two options. Of those respondents who provided additional suggestions, the most common response was for a mix of an allocative and competitive model.

Those in favour of Option A (an allocative approach) commonly highlighted that a competitive approach would likely disadvantage those communities most in need. Respondents emphasised that competitive bidding would lead to funding going to places that already have the experience, funds and local capacity needed to submit successful proposals, rather than those communities experiencing high levels of deprivation and low social capital that the Community Wealth Fund seeks to target. Some also emphasised that funding must be allocated by need, with allocations based on indices of deprivation.

Responses in favour of Option B (a competitive approach) believed that this would ensure that funding is used more effectively. Those industry respondents that favoured Option B highlighted the need to ensure funding would be put to best use, with projects that had clear plans and objectives, which they felt a competitive approach would better support.

Several respondents suggested alternative approaches. These mainly focused on a hybrid approach of both allocative and competitive distribution, using quantitative measures of need and/or deprivation while asking for a clear plan for how dormant assets funding would be used.

3.4.3 Government position

The government has concluded that the Community Wealth Fund will allocate funding to communities based on need, rather than holding a competitive process. Communities will receive a tailored programme of support to develop evidence-based plans and objectives for their area. These plans and objectives will be individually reviewed by TNLCF prior to communities being able to access funding. We believe this approach will best meet the objectives to support places of relatively high deprivation and low social capital. These are places that are likely to have been unsuccessful in bidding for other government or philanthropic funding streams, and have limited organisational capacity to attract funding.

This approach aligns with the government’s commitment to end wasteful competitive bidding and ensure that dormant assets funding reaches those that are most in need, helping to break down barriers to opportunity. A competitive approach would risk further disadvantagering the communities that the Community Wealth Fund is designed to support.

3.5 How beneficiaries are selected

Summary government position: The Community Wealth Fund will target communities according to need, focusing on the most deprived places with the lowest social capital and social infrastructure, whilst ensuring there is a spread across England. The selection process will be developed by TNLCF.

3.5.1 Summary of consultation

The government wanted to consider how communities will be chosen to benefit from the Community Wealth Fund and how future places should be selected.

3.5.2 Summary of responses

A majority of individual respondents were in favour of beneficiary communities to be selected in order of priority of need while ensuring a geographical spread across the country (Option B). While the majority of responses from organisations were similarly supportive of Option B, a significant proportion were also in favour of Option A, that beneficiaries should be selected only in order of priority. Industry respondents were split between the two, although the majority preferred Option B. Those suggesting alternative approaches often wanted to see an evidence-based selection criteria, or felt that the selection of beneficiaries should be based on a business case made by applicants.

Views in favour of Option B highlighted the importance of a broad geographic spread. Respondents also believed that this approach would be fairer and argued that only selecting places in order of priority would lead to a high number of beneficiaries clustered in one or two areas of the country.

Responses that were supportive of Option A emphasised the importance of prioritising by need in order to deliver the greatest impact. They wanted communities’ level of need to take precedence over attempts to achieve a geographical balance. They also suggested specific metrics that should be used, with half proposing the Index of Multiple Deprivation for its transparency and simplicity, while the other half suggested either replacing or complementing the Index of Multiple Deprivation with the Community Needs Index, a model that looks at the social and cultural factors that can contribute to poorer life outcomes.

A small proportion of respondents favoured Option C, a discretionary approach, which they argued would allow for the most flexibility and therefore a selection of places with different needs and characteristics.

3.5.3 Government position

The government has concluded that the Community Wealth Fund should target those communities who need support the most; however, we also want to ensure a spread of Community Wealth Funds across England and avoid clustering in any one region or area. The government is committed to breaking down barriers to opportunity by delivering targeted, local investment to communities experiencing the highest levels of deprivation and low social capital nationally, enabling an England-wide impact.

To ensure that Community Wealth Fund beneficiaries are chosen according to these principles, selection will be guided by indicators of deprivation, social capital, social infrastructure and engagement, including metrics such as the Index of Multiple Deprivation and Community Needs Index. To account for the acute differences in outcomes that exist at a neighbourhood level, the Community Wealth Fund will retain the type of neighbourhood-level focus that underpinned the success of historic programmes such as Big Local. This will help to fulfil the commitment of the Community Wealth Fund to empower local residents to make decisions about their community, with the selection process to be developed by TNLCF.

3.6 Nature of local decision-making

Summary government position: Communities will be given the greatest level of decision-making autonomy and are free to determine the best way(s) of meeting local priorities. They will be guided with examples of initiatives that have been shown to work well.

3.6.1 Summary of consultation

The government committed to ensuring that building the capacity and capability of communities is at the heart of the Community Wealth Fund. This would include ensuring a broad group of local residents are engaged to identify local needs and agree on the priorities they wish to address. The government therefore wanted to consider how best to enable local decision-making for recipients, while meeting the wider essential criteria of the Dormant Assets Scheme and ensuring that funding seeks to make a sustained, high impact and measurable change across England.

The government’s preferred approach, set out in the technical consultation, was for communities to be given the greatest level of autonomy to address local priorities through the interventions they deem most appropriate, provided that these meet the principal criteria of the Scheme, including additionality.

3.6.2 Summary of responses

In line with the government’s preferred approach, a clear majority of responses from individuals and organisations were in favour of Option A: where communities are provided with a menu of evidence-based interventions but free to determine the best way(s) of meeting local priorities. A significant proportion of individual responses were supportive of Option B (where communities must pick from the menu of interventions), while industry responses were split between the two options.

Those respondents in favour of Option A often argued that local communities are the most knowledgeable about the needs and priorities of their area and it was therefore important that the Community Wealth Fund is able to adapt to these different contexts and needs. It was also noted that, while a menu of evidence-based interventions should be provided to aid communities’ thinking, only allowing them to choose interventions from this menu would be too restrictive. Respondents who supported Option A, however, were in general agreement that advice and support would need to be provided to communities so that they could understand what had worked elsewhere and how this may be applied or adapted within their community.

Respondents supportive of Option B argued that choosing from a list of evidence-based interventions would lead to a greater chance of success given their proven track record, and cited other schemes where this had successfully been adopted. Supportive respondents also highlighted the benefits of taking a structured approach, while emphasising the need for communities to have the agency to select interventions that are not listed if those provided were not suitable for a community.

3.6.3 Government position

One of the core objectives of the Community Wealth Fund is to empower local people to identify needs and make decisions on what is best for their area. The government’s position is that communities should be given the greatest level of autonomy to address local priorities through the interventions they deem most appropriate (for example, visual improvements to the public realm, youth programmes, employment support, green space initiatives), provided that these meet the principal criteria of the Scheme – including additionality – and have the community’s support. This aligns with the government’s commitment to help communities take back control of their own lives and areas, in turn breaking down barriers to opportunity and helping to create safer streets.

TNLCF and its partners will develop tools and resources to support communities to develop their plans based on the evidence and experience of what works. Communities will not be limited to developing interventions from the evidence-based initiatives provided and may come up with other innovative ideas to achieve their objectives. Community Wealth Fund areas will identify local priorities through both engaging local residents and tapping into the knowledge of existing local partnerships and networks, including engagement with the Pride in Place programme’s Neighbourhood Boards, where relevant, and local authorities. It can take time to consult within the community, establish consensus and a shared vision, particularly in places where there were not previously any established forums or structures for community agency before the Community Wealth Fund. TNLCF will work with communities to ensure that their plans are in line with the additionality principle of dormant assets funding. We recognise that this is an important safeguard to secure the integrity and purpose of the Scheme, and ensure that the Community Wealth Fund cannot be used to subsidise or duplicate statutory or standard services in a community. It is also in communities’ best interests to maximise the impact of this additional funding.

Evidence shows that at the end of the Big Local programme, many communities had, or had planned to buy, build or manage assets - such as land and buildings - to help make a positive change to their local area.^{[footnote 5]} We anticipate that throughout the lifetime of the programme, Community Wealth Fund recipients will also contribute to building the evidence base for effective initiatives as they develop and deliver local projects. This will feed into the resources and peer-learning opportunities across the Community Wealth Fund network.

Empowerment and building the capacity and capability of communities is at the heart of the Community Wealth Fund, ensuring residents are supported throughout, while remaining free to make their own decisions. Communities will be given the greatest level of decision-making autonomy, while being supported to develop the capacity and capability needed to identify local priorities and deliver and manage interventions aimed at addressing these, including the future potential to own community assets.

4. Further considerations

The government has already announced that the Community Wealth Fund will receive £87.5 million of dormant assets funding, from the £440 million that is expected to flow into the Scheme by 2028. Funding for communities will be committed and available to them over circa ten years, giving them the long-term, patient investment needed to deliver locally identified priorities. The voluntary nature of the Dormant Assets Scheme means that participating firms can transfer as little or as much funding as they see fit on an annual basis. Due to these variable flows of funding into the Scheme, the government is not able to predict how much money will be available after 2028 to make any further investment into the Community Wealth Fund. Additional dormant assets funding can still be released to the Community Wealth Fund if it becomes available.

As set out in the technical consultation, TNLCF will deliver the Community Wealth Fund. TNLCF has extensive experience of delivering place-based interventions, strong local networks, and a proven track record in delivering large-scale funds. Their delivery will provide a streamlined governance structure, reduce bureaucracy, and allow dormant assets funding to go straight to those communities who need it most. The government is delighted that TNLCF has decided to commit £87.5 million of National Lottery funding to support the Community Wealth Fund and match the £87.5 million of dormant assets funding that the government has announced. The government appreciates TNLCF’s support and is excited to see the impact the £175 million programme will have on unlocking the potential of communities who need it most.

While the government has set out its position on the key design principles of the Community Wealth Fund, respondents raised a number of further considerations that are likely to influence its delivery. These broadly fell into 3 themes: the role of the public sector; governance and accountability; and evaluation. The government will work closely with TNLCF to ensure these concerns are reflected in their delivery of the Community Wealth Fund.

4.1 Role of the public sector

For local communities to successfully deliver their chosen interventions, and for those interventions to be impactful and sustainable over the long-term, there will need to be deep and productive partnerships with public sector organisations, including local government. Respondents noted the importance of partnership building and referenced previous examples, such as Big Local, that may be used as a guide for the Community Wealth Fund.

Respondents, including those from industry firms, raised concerns regarding the potential for local authorities to unduly influence communities’ decision-making, such as using the Community Wealth Fund as an opportunity to reduce their expenditure or attempting to use dormant assets funding to support statutory or standard services, compromising the additionality principle.

The government is committed to ensuring that dormant asset funding for the Community Wealth Fund is spent, with due consideration given to the additionality principle through:

• TNLCF delivering the Community Wealth Fund directly to local communities, not via local authorities as some respondents believed;
• empowering local residents to identify and deliver local priorities;
• ensuring communities are supported to develop a clear plan for using their funding, based on evidence-based guidance about what works; and
• ensuring that TNLCF has reviewed plans to verify how they meet the principles of dormant assets funding, including additionality.

Mitigations suggested by respondents to preserve the additionality principle included: implementing a robust evaluation and reporting process; ensuring communities are provided with enough support and guidance to understand how their priorities can be delivered in line with the additionality principle; and continuing to focus the Community Wealth Fund on developing the social infrastructure of communities. The government welcomes these suggestions and will work closely with TNLCF to consider these as part of the delivery of the Community Wealth Fund, including giving communities the support they need to harness the opportunities of partnership working with local authorities and the wider public sector where appropriate.

4.2 Governance and accountability

The government recognises the importance of embedding robust governance structures and accountability into the design and delivery of the Community Wealth Fund. Delivering through TNLCF provides assurance that there is a high threshold for the governance of the Community Wealth Fund. As an arm’s-length body, accountable to Parliament, TNLCF complies with best governance practices, including Managing Public Money, that are monitored and regularly reviewed by DCMS, as its sponsor department.

As the named distributor of all dormant assets funding in primary legislation, TNLCF’s direct delivery also avoids adding unnecessary layers of bureaucracy. This will ensure that as much dormant assets funding as possible is going directly to those communities who need it most, with local residents supported to develop an evidence-based plan and objectives, reviewed and approved by TNLCF, prior to being able to access funding.

TNLCF will provide communities with a programme of support which will develop their capacity and capability, alongside more intensive wraparound support where needed. This will be informed by the initial mapping of social infrastructure to ensure TNLCF’s support is tailored to the characteristics and needs of each community, allowing residents to be able to develop the tools and skills needed to deliver their evidence-based plan. The government recognises the need for the Community Wealth Fund to be capable of adapting to the unique needs and different types of beneficiary communities across the country while ensuring sufficient oversight at the programme level. We are working with TNLCF as it develops the right governance structures to provide this.

The government will also work with TNLCF to ensure the governance of the Community Wealth Fund is consistent with the other causes (youth, financial inclusion and social investment) and aligns with the intended programme of work set out in the Dormant Assets Strategy regarding ‘protecting the integrity of the Scheme and its funding’.

4.3 Evaluation

The government is committed to embedding a robust, but proportionate, evaluation structure into the delivery of the Community Wealth Fund. Some respondents argued that local involvement in designing the evaluation, as well as looking at a broad range of indices of success, would ensure that the differing needs and characteristics of beneficiary communities are accounted for and that all communities are treated fairly and equitably. The government will work with TNLCF to give communities the support they need to be able to comply with the monitoring and reporting processes that TNLCF will establish for the Community Wealth Fund.

The government also wants to ensure that the evaluation of the Community Wealth Fund is flexible enough to capture and assess the impact delivered in individual communities, reflecting their differing needs and characteristics, and the programme as a whole at a national level. We therefore expect TNLCF to commission, publish and respond to an independent evaluation of the Community Wealth Fund programme and their delivery of it every four years, with the first report expected in 2029.

4.4 Public Sector Equality Duty

A majority of respondents believed that the design of the Community Wealth Fund is likely to have positive impacts on individuals with a protected characteristic under the Equality Act 2010, while a significant proportion stated they would expect a mix of positive and negative effects. No respondents believed the design of the Community Wealth Fund would have only negative effects. While it was noted that the Community Wealth Fund could lead to the increased involvement of those with protected characteristics, concerns were raised that certain groups might still be excluded and that barriers – such as reduced mobility, childcare responsibilities and existing distrust of government from certain protected groups – would limit potential participation.

The government is committed to ensuring that individuals with protected characteristics are not negatively impacted by the delivery of the Community Wealth Fund and that this cause unlocks positive equality impacts wherever possible. The government will work closely with TNLCF to ensure that plans for how dormant assets funding is spent by beneficiaries reflect and have the support of the wider community, and that local decision-makers are representative of their communities.

4.5 Leveraging additional capital

One of the desirable criteria of dormant assets funding is its ability to leverage other sources of funding. The government recognises the significant potential of private and philanthropic contributions, and will be looking to see whether and how this additional capital could play a role in the Community Wealth Fund in the future. We would anticipate this potential being explored once communities are in the position to begin drawing down their allocated funding, at which point there may be an opportunity to support philanthropic and private investment to contribute to scaling the Community Wealth Fund in their place of interest.

Annex

Quantitative analysis breakdown

Q10: Should a Community Wealth Fund focus on supporting a smaller number of communities with larger pots of funding or a greater number of communities with smaller pots of funding?

Respondent type	Option A - bigger pots of funding to a smaller number of communities	Option B - a greater number of communities receive smaller pots of funding	Other (please specify)	Don’t know
Individual	8 (22%)	25 (69%)	3 (8%)	0 (0%)
Single organisation	11 (20%)	35 (63%)	8 (14%)	2 (4%)
Joint responses on behalf of multiple organisations	3 (33%)	6 (67%)	0 (0%)	0 (0%)
Industry	5 (100%)	0 (0%)	0 (0%)	0 (0%)
All respondents	27 (25%)	66 (62%)	11 (10%)	2 (2%)

Q12: What do you regard as the optimum amount of funding that a community should be given in total through a Community Wealth Fund (over roughly a 10-year period)?

Respondent type	Less than £500,000	£500,000 - £1,000,000	£1,000,000 - £2,500,000	£2,500,000 - £5,000,000	£5,000,000 - £10,000,000	More than £10,000,000	Don’t know
Individual	0 (0%)	3 (9%)	10 (30%)	9 (27%)	3 (9%)	4 (12%)	4 (12%)
Organisation	0 (0%)	1 (2%)	24 (45%)	9 (17%)	7 (13%)	5 (9%)	7 (13%)
Joint responses	2 (25%)	2 (25%)	2 (25%)	0 (0%)	0 (0%)	1 (13%)	1 (13%)
Industry	0 (0%)	0 (0%)	0 (0%)	0 (0%)	2 (40%)	0 (0%)	3 (60%)
All respondents	2 (2%)	6 (6%)	36 (36%)	18 (18%)	12 (12%)	10 (10%)	15 (15%)

Q13: What do you regard as the minimum viable amount of funding that a community should be given in total through a Community Wealth Fund (over roughly a 10-year period)?

Respondent type	Less than £500,000	£500,000 - £1,000,000	£1,000,000 - £2,500,000	£2,500,000 - £5,000,000	£5,000,000 - £10,000,000	More than £10,000,000	Don’t know
Individual	2 (6%)	7 (21%)	15 (45%)	2 (6%)	0 (0%)	3 (9%)	4 (12%)
Organisation	5 (9%)	13 (24%)	22 (41%)	7 (13%)	2 (4%)	2 (4%)	3 (6%)
Joint responses	3 (38%)	2 (25%)	2 (25%)	0 (0%)	0 (0%)	0 (0%)	1 (13%)
Industry	0 (0%)	0 (0%)	1 (20%)	0 (0%)	1 (20%)	0 (0%)	3 (60%)
All respondents	10 (10%)	22 (22%)	40 (40%)	9 (9%)	3 (3%)	5 (5%)	11 (11%)

Q14: What do you regard as the maximum amount of funding that a community should be given in total through a Community Wealth Fund (over roughly a 10-year period)?

Respondent type	Less than £500,000	£500,000 - £1,000,000	£1,000,000 - £2,500,000	£2,500,000 - £5,000,000	£5,000,000 - £10,000,000	More than £10,000,000	Don’t know
Individual	0 (0%)	0 (0%)	6 (19%)	6 (19%)	7 (22%)	8 (25%)	5 (16%)
Organisation	1 (2%)	1 (2%)	9 (17%)	17 (33%)	13 (25%)	7 (13%)	4 (8%)
Joint responses	2 (25%)	1 (13%)	2 (25%)	1 (13%)	0 (0%)	1 (13%)	1 (13%)
Industry	0 (0%)	0 (0%)	0 (0%)	0 (0%)	1 (20%)	1 (20%)	3 (60%)
All respondents	3 (3%)	2 (2%)	17 (18%)	24 (25%)	21 (22%)	17 (18%)	13 (13%)

Q16: Should there be a baseline social infrastructure requirement for small towns to be eligible for a Community Wealth Fund?

Respondent type	Option A - there should be a social infrastructure baseline requirement	Option B - there should not be a social infrastructure baseline requirement	Other (please specify)	Don’t know
Individual	10 (32%)	19 (61%)	1 (3%)	1 (3%)
Organisation	10 (19%)	35 (65%)	8 (15%)	1 (2%)
Joint responses	2 (22%)	7 (78%)	0 (0%)	0 (0%)
Industry	3 (60%)	2 (40%)	0 (0%)	0 (0%)
All respondents	25 (25%)	63 (64%)	9 (9%)	2 (2%)

Q19: Should small towns be allocated funding from a Community Wealth Fund, or should there be a competitive bidding process to determine which small towns receive funding?

Respondent type	Option A - allocative	Option B - competitive	Other (please specify)	Don’t know
Individual	25 (81%)	2 (6%)	3 (10%)	1 (3%)
Organisation	43 (78%)	1 (2%)	9 (16%)	2 (4%)
Joint responses	6 (67%)	1 (11%)	2 (22%)	0 (0%)
Industry	1 (20%)	4 (80%)	0 (0%)	0 (0%)
All respondents	75 (75%)	8 (8%)	14 (14%)	3 (3%)

Q21: How should beneficiaries be selected to receive funding from a Community Wealth Fund?

Respondent type	Option A - beneficiaries should be selected in order of priority	Option B - beneficiaries should be selected in order of priority, while ensuring a geographical spread across the country	Option C - a discretionary approach should be taken to select beneficiaries	Other (please specify)
Individual	5 (17%)	19 (63%)	3 (10%)	3 (10%)
Organisation	16 (31%)	26 (50%)	7 (13%)	3 (6%)
Joint responses	3 (33%)	5 (56%)	0 (0%)	1 (11%)
Industry	1 (20%)	3 (60%)	0 (0%)	1 (20%)
All respondents	25 (26%)	53 (55%)	10 (10%)	8 (8%)

Q23: What option do you agree with regarding the nature of local decision-making?

Respondent type	Option A - communities are free to determine the best way(s) of meeting local priorities	Option B - communities must choose from a menu of evidence-based interventions in order to meet local priorities	Other (please specify)	Don’t know
Individual	20 (62%)	9 (28%)	3 (9%)	0 (0%)
Organisation	36 (71%)	8 (16%)	6 (12%)	1 (2%)
Joint responses	7 (78%)	1 (11%)	1 (11%)	0 (0%)
Industry	2 (40%)	3 (60%)	0 (0%)	0 (0%)
All respondents	65 (67%)	21 (22%)	10 (10%)	1 (1%)

Q29: What potential impacts do you think the design of a Community Wealth Fund may have on individuals with a protected characteristic under the Equality Act 2010?

Respondent type	Positive	Mix of positive and negative	No impacts	Don’t know
Individual	13 (54%)	6 (25%)	1 (4%)	4 (17%)
Organisation	18 (40%)	18 (40%)	3 (7%)	6 (13%)
Joint responses	4 (67%)	2 (33%)	0 (0%)	0 (0%)
Industry	1 (33%)	1 (33%)	0 (0%)	1 (33%)
All respondents	36 (46%)	27 (35%)	4 (5%)	11 (14%)

1. Dormant Assets Act 2022 ↩

2. The Big Local programme was a £217 million endowment from TNLCF managed by Local Trust. It supports local residents in 150 neighbourhoods across England to make decisions on how to use £1.15 million of funding across 10-15 years to create a lasting change in their neighbourhoods. ↩

3. Frontier Economics, “The Impacts of Social Infrastructure Investment” (2021) ↩

4. OCSI & Local Trust, “Left behind? Understanding communities on the edge” (2019) ↩

5. Local Trust, 2024 ↩