19/07/10
By Andrew Holt
The Prime Minister has set out how the Big Society will be ”the biggest, most dramatic redistribution of power” from the state to individuals, and "every penny" of dormant bank accounts in England will be allocated to the Big Society Bank.
In David Cameron’s official launch of the Big Society in Liverpool today, he promised investment in social enterprises, charities and voluntary groups to help them run public services.
Reinforcing what he has said before, 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.
"The potential problem is that you can lock smaller organisations out, because they don’t have access to start-up capital," he noted.
Commenting on Cameron’s speech, John Low chief executive of the Charities Aid Foundation, said: “News that every penny held in dormant bank and building society accounts will be used to fund charities, social enterprises and voluntary groups is very welcome. This significant policy shift will go some way to making the Government’s vision of a Big Society a reality."
Sir Stuart Etherington, chief executive of NCVO, said: ‘It is good that the Prime Minister is recognising the importance of the voluntary and community sector, and encouraging people to get involved in their local communities. I am particularly pleased that all of the unclaimed assets will be used for the benefit of the sector.
"However I am very concerned about the tidal wave of cuts about to hit the sector. These cuts will have a detrimental effect on the services received by some of the most vulnerable people in our society. The government must ensure that any cuts do not disproportionately hit the most vulnerable and scupper the chances of achieving the Big Society.’
In his speech Cameron added: "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."
Charity Bank chief executive Malcolm Hayday, said: “We have called for the ‘Big Society Bank’ to be a wholesale provider of finance to existing independent intermediates so we are pleased that this seems to be the case.
"The involvement of current social investment organisations will provide the most effective way to leverage the impact of the money available and therefore multiplying the effect of the funds available.”
Cameron also set out "four vanguard communities [which] will be the great training grounds of this change." These are: Eden Valley in Cumbria, Windsor and Maidenhead, Sutton and Liverpool.
These Big Society vanguard communities will be involved in, Cameron said: "From devolving budgets to street-level, to developing local transport services, taking over local assets such as a pub, piloting open-source planning, delivering broadband to local communities, generating their own energy."
Peter Holbrook, CEO of the Social Enterprise Coalition, added: “The Big Society Bank has the potential to help build an economy that is transparent, accountable and embedded with values that reflect the needs of people and planet. A thriving social enterprise sector would get us closer to that kind of economy, and an independent wholesale institution could play a key role in developing the social investment market that underpins it.
“However, in order to be effective, the Bank should be structured and run in such a way that it works with existing intermediaries and does not cause market distortion or displacement, and must be managed independently of government with the ability to operate commercially and distribute funds swiftly and efficiently.
"The Government has said that it will use ‘every penny’ of dormant bank accounts to finance the Bank. We want to ensure that this results in the greatest social and environmental benefits possible. “
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