Efforts to address financial hardship in Scotland are entering a new phase, as The National Lottery Community Fund begins shaping a fresh round of investment drawn from the Dormant Assets Scheme.
The programme, announced on 20 March, signals a shift in emphasis towards financial inclusion, with a particular focus on those unable to access basic financial services or manage everyday economic shocks. Rather than launching funding immediately, the Fund is first seeking evidence from organisations working on the front line of financial crisis and exclusion.
A Consultation Before Cash
At the heart of the initiative is a consultation process. Charities, community groups and advisory organisations are being asked to describe what works, what fails, and where gaps persist in supporting those facing acute financial strain.
The definition of “financial crisis” used here is deliberately practical. It includes households unable to absorb sudden costs, such as essential repairs, or those who find themselves abruptly unable to meet basic living expenses following a change in circumstances, such as job loss.
Alongside this sits the broader issue of financial exclusion. This encompasses individuals without access to bank accounts, credit, savings, insurance or reliable financial advice. In more severe cases, it extends to those forced into high cost borrowing simply to manage day to day life.
The Credit Gap
One of the more telling elements of the consultation concerns access to affordable credit. The Fund is seeking detailed accounts of how people navigate borrowing when mainstream options are unavailable.
For many, this leads to reliance on high interest products such as payday loans or doorstep lending. These forms of credit, while often filling an immediate need, can entrench longer term financial instability.
The consultation aims to identify how alternative, fairer credit models might be expanded or made more accessible, alongside better support for those already dealing with unmanageable debt.
Dormant Assets, Active Policy
The funding itself comes from the Dormant Assets Scheme, which redistributes money from financial accounts left untouched for more than 15 years. Since 2012, the scheme has channelled significant sums into social programmes across Scotland, including up to £75 million directed towards children and young people.
Under revised priorities set by the Scottish Government, future allocations will extend further into financial inclusion, mental health and poverty reduction.
Crucially, Dormant Assets funding is intended to supplement, rather than replace, existing public spending. That distinction is often emphasised in policy terms, though in practice it raises a familiar question about whether such funds are filling gaps that might otherwise demand more permanent solutions.
A Measured Opportunity
There is a degree of caution built into the process. By seeking input before distributing funds, the programme acknowledges that financial exclusion is neither uniform nor easily addressed through a single model.
Yet consultation exercises of this kind also carry a certain risk of repetition. Many of the issues identified here, from lack of access to banking to dependence on high cost credit, have been well documented for years.
The test, therefore, will not lie in the gathering of evidence, but in whether the eventual funding programmes translate that evidence into practical, scalable interventions.
For now, organisations have until 13 May to contribute their experience. What follows will determine whether this latest round of funding represents a meaningful intervention, or simply another careful restatement of a problem long understood.
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