'Every penny' of dormant accounts allocated to Big Society Bank

Further details concerning the structure and funding of the Big Society Bank, set to launch in April 2011, have been released. Every penny from dormant bank accounts is set to be allocated to the new Bank which will invest in social enterprises.

via Gemma Hampson socialenterpriselive.com

The prime minister today (19/07/2010) announced that 'every penny' of dormant bank accounts in England would be allocated to the Big Society Bank.

In David Cameron's official launch of the Big Society plan, which he called his 'passion', he promised investment in social enterprises, charities and voluntary groups to help them run public services.

He did not give a figure in his speech, made this morning in Liverpool, but said it would amount to 'hundreds of millions of pounds' along with private investment.

A spokesman for Number 10, however, said that the industry estimation of the amount available in England by the time the bank is up and running in April 2011 would be 'up to' £100m. He added that the estimate for the whole of the UK was £400m.

Andrew Selous, former shadow work and pensions minister and now parliamentary private secretary to DWP secretary Iain Duncan Smith, said earlier this year that the Big Society would have around £200m to invest and Labour promised £75m for its Social Investment Wholesale Bank. This was condemned by social entrepreneurs as nowhere near enough to fund the innovation needed to radicalise public services.

In his speech, Cameron said providing finance through the Big Society Bank was one of three 'techniques' to deliver the Big Society vision, the others being decentralisation of power to local authorities and communities, and transparency. The bank was integral to the coalition government's plans to pay by results to fund innovation, Cameron said.

'But the potential problem is that you can lock smaller organisations out, because they don't have access to start-up capital,' he said.

'So government has a crucial role to play in bridging the gap and, indeed, more widely, in connecting private capital to investment in social projects. We have already said we will create a Big Society Bank to help finance social enterprises, charities and voluntary groups through intermediaries and I can announce today that it will be established using every penny of dormant bank and building society account money allocated to England.'

'These unclaimed assets, alongside the private sector investment that we will leverage, will mean that the Big Society Bank will, over time, make available hundreds of millions of pounds of new finance to some of our most dynamic social organisations.'

His speech also promoted the Big Society's four 'vanguard communities'- Eden Valley in Cumbria, Windsor and Maidenhead, Sutton and Liverpool. These Big Society pilots aim to demonstrate the success of communities running their own local transport, introducing anaerobic digestion, building their own affordable housing and running pubs, among other community-level ideas.

Wrapping up this morning's event, Cameron added that there were still people, including some of his own ministers, using the 'banned' phrase 'third sector', 'when of course you're the first sector'.

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