The Social Investment Business has given a lukewarm response to Deputy Prime Minister Nick Clegg's speech at the Liberal Democrat party conference in Birmingham yesterday.

Responding to to the speech, where he said jobs and growth and doing more to get the banks lending are the government’s priorities, acting chief executive of The Social Investment Business Darren Garner said: “We all know how tough it is for small businesses right now, but it’s even harder still for civil society organisations to access mortgages, loans and contracts.

"Sector organisations need these to survive, build capacity and thrive else it could impact very badly on some of our poorest communities and undermine Nick Clegg’s goal of creating a more equitable society.

“He didn’t mention the sector specifically in his speech today, but it’s important that the government’s plans to secure jobs and increase growth include efforts to help charities, social enterprises and community organisations overcome the financial challenges they face.”

He said that deficit reduction alone was not the "magic recipe for growth". "Deficit reduction is not everything," he said. "You don't create growth simply by balancing the books. There are other ... are so-called supply-side measures, you bring taxes and regulation down for businesses, but there is also – and this is the thing that we've been talking about more in the Liberal Democrat conference – there are things government can do to stimulate both confidence and demand."

Clegg said he would have liked more progress on bank bonuses, which he had described as "gratuitously offensive", saying now those at the top of banks in state ownership had "legally watertight" contracts, signed before the coalition came into power.

He cited Project Merlin – a deal struck earlier this year under which the largest UK banks pledged to lend about £190bn to businesses, including £76bn to small firms, this year.

Clegg said progress was being made, but made it clear that, if banks did not deliver on Project Merlin, "all bets are off".

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