Treasury insists dormant cash fund still on track

The assurance comes following an admission made last week by a senior Whitehall official that the financial crisis had delayed plans to set up an agency to oversee a fund to collect the money.

A Treasury spokesman has since told CYP Now there had been delays with the scheme but it is still on track to start distributing cash early next year. He said: "Government intends the scheme to be operational as soon as possible."

Talks are currently ongoing with several institutions, including banks and building societies, in relation to setting up an agency. A government source said negotiations are at "a delicate stage".

Under legislation passed last November, once set up the agency will be able to collect money from unclaimed assets. The money, which the British Bankers' Association has said could be as much as £400m, will be distributed by the Big Lottery Fund.

A spokeswoman for the Building Societies Association said her organisation expects distribution of funds to begin in the first half of next year.

News of a delay in appointing an agent was revealed by Andrew McCully, director for supporting children and young people at the Department for Children, Schools and Families, last week.