Comment w/c 20th March 2023

“What power have you got? Where did you get it from? In whose interests do you exercise it? To whom are you accountable? How do we get rid of you?”

Questions habitually asked by Tony Benn on meeting somebody in power

The House of Commons Select Committee system is firmly in the media spotlight this week, as Boris Johnson faces a televised evidence session of the Privileges Committee on Wednesday. Its group of seven cross-party MPs are investigating whether he misled Parliament over gatherings at Downing St during the Covid lockdowns, and their findings will then be debated by the full House of Commons on a free vote.

The Select Committee system matured into its current format in the late 1970s, and the work of each major Government department is scrutinised by a Committee providing Parliamentary oversight. In 2019, Simon Rose interviewed Mike Indian to provide the very helpful Share Radio podcast explaining how the system works and its strengths and weaknesses. He explains how the most powerful of these Select Committees is the Public Accounts Committee, whose role is to scrutinise the efficiency and effectiveness of Government spending, and which is able to draw on the considerable resources of the National Audit Office.

The most recent investigation undertaken by the National Audit Office is into Child Trust Funds, and their report was published on Tuesday 14^th March. As listeners will be aware, this huge scheme is of considerable interest to both Share Radio and The Share Foundation due to the scheme’s leading role as a forerunner for inter-generational rebalancing; The Share Foundation has a major recovery programme underway to help young adults find their accounts, and Share Radio has provided many reports on progress with the scheme over the past few years.

So, in this commentary we are including The Share Foundation’s welcoming statement for the National Audit Office report, and providing links to some of the key developments over the past five years, such as the Westminster Hall debate on Child Trust Funds in 2019.

The NAO’s comprehensive report into Child Trust Funds concludes that insufficient priority has been given to keeping track of this huge scheme, which has provided over six million young people with starter capital accounts in their individual names.

It confirms that the accounts of very significant numbers of young adults with Child Trust Funds remain unclaimed, a problem that The Share Foundation has been seeking to remedy for the past five years. The most recent HMRC statistics in the NAO report relate to April 2021, just over six months after the oldest CTF recipients turned 18 and were therefore able to withdraw their money. The NAO acknowledges the current estimate from TISA, the account providers’ trade association, of 45% of matured Child Trust Funds remaining unclaimed. With one third of all CTF owners now aged 18 or over, this means that the current number of unclaimed adult Child Trust Funds is over 900,000, with a total value of c. £1.8 billion.

The report points towards the many lessons that should be learnt from this first large-scale inter-generational rebalancing initiative, and The Share Foundation hopes that the Public Accounts Committee, and in due course the Treasury Select Committee, will look carefully at the National Audit Office’s objective analysis in order to ensure that future arrangements are more effective in their delivery.

Some of the points drawn out by The Share Foundation include:

• Governments need to ensure that long-term initiatives such as the Child Trust Fund receive a consistently strong level of oversight throughout their life in order to ensure effective delivery at maturity, irrespective of the different political complexions that may apply (note: this long-term perspective was a key element of the Share Radio commentary last week, called ‘Underlying Principles for Taxation’).
• If accounts are opened on behalf of non-responding families (this was the case for 28% of Child Trust Funds, particularly affecting low-income families), communication and training must be maintained throughout the childhood years in order to connect them and build awareness of the account and its benefits.
• Consideration should be given to any future schemes of inter-generational rebalancing being carried out on a targeted, rather than universal basis, so that use of public money is focused on young people from disadvantaged and low-income backgrounds (note: this recommendation for targeting inter-generational rebalancing, combined with incentivised learning, formed a key part of the Share Radio commentary on 3^rd August 2020). 
• Bearing in mind that so many unclaimed adult Child Trust Funds belong to young people from low-income families, it is abhorrent to read that there are plans which could see these funds released into the dormant account scheme in due course. We must maintain the effort to link these accounts with their owners so that they receive the benefit set aside for them.

The Share Foundation concludes by looking forward to contributing to further analysis of the National Audit Office findings, and it is currently exploring independent routes for surveying the scheme’s effectiveness for those young people who have found their accounts through their https://findCTF.sharefound.org  search facility, which has already united over 32,000 young people with their accounts. The NAO notes that the Government has no plans to carry out such research itself in the public sector.

It also notes that various comments are made in the National Audit Office report about account providers, including reference to the estimated £100 million annual fees being received for their administration. The Share Foundation hopes that this income, which largely results from the 1.5% maximum charge permitted on Stakeholder accounts (but which excluded the opportunity to set minimum fees, which might have resulted in a lower ad-valorem maximum), is not deterring account providers from actively working to reduce their unclaimed adult CTF rates.

These comments and the National Audit Office report illustrate the great value of the United Kingdom’s Parliamentary oversight process. It is a real strength of our democratic system that Government is subject to this detailed scrutiny. While we sometimes comment on weaknesses such as the absence of a written constitution to provide clear long-term guidance for issues such as climate change and inter-generation fairness, it is also important to recognise one of the real strengths of the British Parliamentary system: its Select Committees.

Gavin Oldham OBE

Share Radio