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Big Society Bank Launched With £600m To Spend

Huffington Post UK   Dina Rickman First Posted: 29/07/2011 10:43 Updated: 28/09/2011 10:12

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David Cameron’s Big Society Bank was launched on Friday with £600m to invest in charities and social enterprises.

Now named Big Society Capital the bank has the backing of the biggest figures in business. Former venture capitalist Sir Ronald Cohen will work as the interim chair of the group which operates the bank.

Former JP Morgan global head of research Nick O’Donohoe will be the bank’s CEO, and former head of the CBI Sir Richard Lambert will sit on its board, to oversee the venture.

Cabinet office minister Francis Maude heralded the bank saying it could “change the world”: “We’ve all heard about a small charity or social enterprise sweeping away entrenched local social problems. But we have not seen a significant commitment to help social innovations grow and be implemented on the national stage until now.”

The bank will invest in charities and voluntary groups and is to receive £400m from Dormant bank accounts in the UK.

HSBC, Royal Bank of Scotland, Lloyds and Barclays will also invest £200m in the bank under the terms of the Merlin agreement – the deal banks and government came to in the wake of the economic crisis.

The heads of the banks released a joint statement saying: “We are delighted to support the Government’s efforts to transform the UK social finance market and are investing £200m collectively to launch Big Society Capital catalyst for creating a sustainable social finance model in the UK. This investment evidences our commitment to working with the team at Big Society Capital to make their vision of sustainable social finance a reality.”

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NickBrittlebank
10 Fans
 
10:41 PM on 07/29/2011
Glorified PR exercise.
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HUFFPOST SUPER USER
floodberg
Attorney (ret.)
858 Fans
07:37 PM on 07/29/2011
£400 Mn in abandoned accounts escheated to Britain, but rightfully belong to the Taxpayer.

When this bank was originally proposed, Cameron said these accounts would be £50-100 Mn.   See http://www.ft.com/intl/cms/s/0/3c36736c-37ad-11e0-b91a-00144feabdc0.html 

Why isn't this money being used to save essential services from cuts, improve schools, or give the common man something back? 

The true purpose of this Bank is so commercial bankers and their politician friends can use the free money without oversight for their own benefit.   I see no clear definition of a 'social charity' that distinguishes it from a for-profit business.  Really important details haven't been discussed at all:  How are 'charities' going to 'repay' the loans?  How much are the officers and Board Members going to be paid, and what about those bonuses?  Of course, salaries, benefits and bonuses will have to be on parity with commercial enterprises: and all paid for with mostly-taxpayer money.

FinancialTimes online questioned the feasibility of the Bank:

Critics say the problem in developing social ventures is not just money. It is helping them develop business plans and understand the public sector market. Existing social investors say it is hard to find businesses worthy of investment. And if all the bank does is operate at broadly commercial rates, ignoring the problems inherent in building up the sector, those difficulties will only be exacerbated. The government’s “vision” document acknowledges this, saying the bank will help those who help ventures develop and it will not just be a wholesale money lender.  http://www.ft.com/intl/cms/s/0/89aaf79e-3848-11e0-8257-00144feabdc0.html 

Note the 'vision' document is a statement of what the bankers say they'll do, not what they are legally bound to do.

This is a Trojan Horse.  The poor, greedy, unloved UK commercial bankers and their politician friends win again.
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eric14
1215 Fans
 
01:20 PM on 07/29/2011
How do charities apply?
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Idaho dachnik
meliorist goat lady
162 Fans
04:39 AM on 07/30/2011
Yes I hope they take on projects that help youth get urban agricultural skills. I have heard of transition friendly laws in the UK so let the partnering begin.
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eric14
1215 Fans
 
11:07 AM on 07/30/2011
At community meeting, I am going to be advocating a gardening food-producing project. This in a small town in Scotland. In recent years there has been a growth in agricultural work as use of plastic tunnels has lengthened growing season, but all jobs are taken up East Europeans who are willing to do these jobs, are physically fit and reliable.

Many of locally long-term unemployed live in houses with gardens which produce nothing. Raising this issue is very tricky. Already on Huffpost just discussing it in general terms I have been insulted by other Brits with usual cliches of being down on the unemployed and poor. Even when I describe what goes on in my neighbourhood, people get annoyed. They want their idea of the poor as innocent victims to dominate any discussion of these matters. They just do not understand the tie-in between long-term unemployment, depression, sloth, self-and other abuse and criminality.

The way to help folk in that trap is to provide them with work in stages, starting with part-time work in their own locality. They are not ready for full-time jobs, not mentally or physically. So growing food it will be!
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Orthrus
70 Fans
11:17 AM on 07/29/2011
"The bank will invest in charities and voluntary groups"

What on earth does this mean? Is the bank expecting a return on its "investment" or is it just a means of increasing political spending?
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tristrixi
Hon! Ministry of Love agents are at the door!
462 Fans
11:12 AM on 07/29/2011
Why use a private bank to do the job of the government? This is the purest example of the subjection of a nation to the profit potential which the derivative hounds here seem to have sniffed out. Profiting from charitable and other support services once offered free of an overseeing eye with an eye on the value offered to shareholders. Sick. Vulgar. And a perversion of the basic functions for a society by its government.
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European1919
I am the PigmⒶn
548 Fans
11:10 AM on 07/29/2011
Nice idea Mr. Cameron, but the three heads of the bank, former venture capitalist Sir Ronald Cohen, former JP Morgan global head of research Nick O’Donohoe and former head of the CBI Sir Richard Lambert do not bode well. Again an unholy alliance of bankers (remember, those are the ones causing banking crises and blackmailing governments into bailing them out with the public's taxes - while paying huge bonusses to the more senior criminals in their employ) and captains of industry.
One would do well to both keep an eye on this new scheme and to keep one's own money as far away from it as possible.
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Marc Driftmeyer
Mechanical Engineer and Computer Scientist
527 Fans
11:08 AM on 07/29/2011
Dormant? Is that a nice spin on abandoned bank accounts that might have checked pasts? Dormant bank accounts in the US tend to go to the State they reside.
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