A think tank has suggested charities should be given access to the estimated £400m currently sitting in dormant insurance policies and pension funds to further their causes.

The Centre for Social Justice’s Social Solutions: Enabling grass-roots charities to tackle poverty report highlights ‘cold spots’ in the UK where there are few charities relative to the population, and presents a plan for boosting the social sector in the poorest areas.

A Social Innovation Fund using dormant insurance and pension assets would be used to pay for third sector innovations and fund poverty-fighting charities. CSJ compared the model to a fund aimed at expanding third sector activity in the US, and the Irish government unlocking €20m from insurance funds for projects.

The report was chaired by Danny Kruger, who said that although charities deliver “remarkable work” they have not been properly utilised in the poorest parts of the country.

“There is an army of people out there already making a stunning difference to their neighbourhoods – but we need to unleash the social sector so it can fulfil its potential,” Kruger said.

Research found 10 per cent of people in England and Wales live in areas with just 1.6 per cent of the total number of charities.

The spread of charities was also out of alignment with the level of need. For example, the Cotswalds had a low rank in terms of deprivation but had 6.9 charities per thousand people, while the sixth most deprived area Blackpool had just 0.8 registered charities per thousand.

The report suggests mapping the charity sector to enable better targeting of the poorest areas, and increasing funding via the Big Lottery Fund to help successful charities monitor small community groups.

Another initiative would see encouragement of payroll giving schemes which allow employees to donate on a tax-free basis, through rewarding employers who promote the practice.

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