If elected, Britain's Conservatives would set up an independent bank, funded by unclaimed bank assets, to invest hundreds of millions of pounds in social action, party leader David Cameron said on Wednesday.

The Conservatives, who have been in opposition for 13 years, are hoping to return to power after an election expected on May 6. They lead the ruling Labour Party in opinion polls, though the gap has shrunk from double to single digit percentages since January.

Cameron did not say exactly how much funding would be available through his proposed "Big Society Bank", which would provide lending to neighbourhood groups, charities, social enterprises and other non-governmental organisations.

The Cooperative Financial Services, which is involved in implementing the Labour government's own scheme to make use of unclaimed assets, said in December that banks estimated there were 400 million pounds ($603 million) in dormant accounts.

The government has plans of its own to launch a "Social Investment Wholesale Bank" to help non-governmental organisations access funding for social or environmental work. This would also be funded using money from dormant accounts.

In its budget published last week, the government said it would provide up to 75 million pounds as a minority stake in the proposed wholesale bank.

It was not immediately clear whether the Conservative proposal for a Big Society Bank was significantly different from the Labour government's plans.

"Broken society"

A key Conservative election campaign theme is the "broken society", which they describe as a series of social problems including family breakdown, lack of upward mobility, anti-social behaviour and addiction to drugs and alcohol.

They say these problems have worsened under Labour despite years of increased investment in state-run public services.

One of the ways they propose to address this is by relying less on state welfare programmes and institutions and creating incentives for grassroots initiatives from both the voluntary and private sectors to become service providers.

"We are going to bring in a new Big Society Bank so that social enterprises have access to the start-up finance they need to bid for government contracts," Cameron said at a party event held in a neighbourhood centre in Southwark, London.

Funds are considered dormant and unclaimed when they have been sitting idle in bank or building society accounts for 15 or more years.

Under the Labour government's plans, enshrined in the 2008 Dormant Accounts Act, some of the money held in such accounts can be reinvested into social or environmental projects.

The scheme is not compulsory but rather will rely on banks volunteering to participate. The Cooperative Financial Services is currently working to set up a reclaim fund that will be the first step in implementing the scheme.

Reuters