News that, as part of Prime Minister David Cameron’s ‘Big Society’, the UK government is to set up a bank to finance voluntary groups and social enterprises out of the money held in dormant bank and building societies has been welcomed by observers in the sector. Cameron unveiled his plans for a ‘Big Society’ in a speech in Liverpool. Voluntary groups, he said, should be able to run post offices, libraries and transport services and shape housing projects; he spoke of the concept as a ‘big advance for people power’.
The Big Society Bank is likely to have assets of between £60 million and £100 million by its planned opening date next April, according to the government’s advisers on the project. But the British Banking Association has estimated that dormant accounts contain £400 million, and some third sector finance specialists estimate the sum could be ten times that.
John Low, Chief Executive of the Charities Aid Foundation, described what is being called the ‘Big Society Bank’ as a ‘significant policy shift’ that would ‘go some way to making the Government’s vision … a reality’. Similarly, Malcolm Hayday of Charity Bank observed that ‘the social sector needs to scale up, and if funds are directed towards intermediary organizations like Charity Bank who are established players working towards the long term sustainability of the sector, this is a positive step.’ Recent results seem to underline both the demand for social finance and Charity Bank’s role in providing it. Its results for the first six months of 2010 have revealed that loans agreed to charities and social enterprises totalled £20,932,750 – compared to £22,902,216 during the whole of 2009.
However, not all aspects of the Prime Minister’s vision have received such a warm response from the sector. Rachael Maskell, National Officer for Community and Not for Profit Sector, said: ‘David Cameron’s “Big Society” is an intellectually flawed creed that harks back to a vision of 1950s Britain that never existed.’ Massive cuts and the drive for greater competition would force down costs even further, meaning that ‘quality is compromised for cheapness’. She concluded: ‘The “Big Society” is smoke and mirrors for an avalanche of privatization under the Tories.’
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