Big Society Bank

I have just come back from a fascinating ‘Social Investment Summit’ hosted in the City, and with a wide range of government and private sector speakers.  You will have seen the launch of the Big Society Bank which aims to provide loan capital to charities and social entreprises to allow them to expand their work, access local authority contracts and deliver better services.  The bank will be funded in part by the large high street banks and in part from so-called ‘dormant’ bank accounts – i.e. accounts that have been forgotten!  The first source is expected to provide £200m in loan capital and the second, anything from £60m up to £400m.  The bank is due to start its operations in the third quarter of this year.

The transition from grant funding to generating fees is not necessarily an easy one – but we should be encouraged at the effort that is being put into this area not just by government, but by a wide range of different organisations.  Historically one of the reasons why the voluntary sector has been held back is the lack of capital to build organisations.  Let’s hope that this goes some way to addressing this problem.  Certainly it links in with the thinking in our strategy that we should focus on outcome driven funding, or payment by results.  The skill is in ensuring that the results are good for the people we are trying to help, and not just for the provider.