£3.1 million from dormant bank accounts will be invested in new projects to support local communities, Nick Hurd, Minister for Civil Society, said today.
The Big Society Investment Fund, which has been set up to support innovative projects ahead of the launch of Big Society Capital, has agreed in principle to invest £3.1 million in four projects including: money to help the long-term unemployed set up their own businesses; support for vulnerable young people to get into employment; a community energy project; and the creation of the first ever social stock exchange.
Minister for Civil Society Nick Hurd said:
This is about putting money that has been lying around dormant in bank accounts for years to good use in projects that will benefit our local communities and social entrepreneurs.
These investments will bring real changes to people’s lives. They will help young people into jobs and give the long-term unemployed the opportunity to set up their own businesses.
The Big Society Investment Fund, under the auspices of the Big Lottery Fund, is doing a fantastic job forging the way. Already, their investment decisions show the range of exciting projects that just need financial backing to get going.”
The four organisations benefiting from the money are:
- FranchisingWorks will receive a £1 million investment, which will help long-term unemployed people to set up their own franchise business;
- Triodos Bank will set up a new payment by results initiative using its £500,000 investment to improve educational, training and work outcomes for vulnerable young people in Merseyside;
- Community Generation Fund run by Finance South East will receive £750,000 to set up an initiative to create community owned social enterprises within deprived communities which offer affordable, green energy and reinvest profits in the neighbourhood and;
- The Social Stock Exchange will use its £850,000 investment to set up the world’s first stock exchange for social enterprises, to be located in London and improve access to capital for social entrepreneurs.
John Kingston, Chair of the Investment Committee who agreed the fund, said:
The Investment Committee has just agreed another four in-principle investments. We’ve been impressed by the strength of the deal-flow under the Big Society Investment Fund. And I’m confident we’ll be approving more investments in early 2012, to help build and grow the social investment market here in the UK.
Nick O’Donohoe, Chief Executive of Big Society Capital, said:
I am very excited by the breadth of ideas and the geographic spread of the investments of the Big Society Investment Fund which bodes well for future financing proposals we hope to see when Big Society Capital opens for business next year.
The Big Society Investment Fund was set up by the Big Lottery Fund under the Dormant Accounts Act to make early investments prior to the establishment of Big Society Capital (previously known as the Big Society Bank). Today’s announcement follows the first in-principle investment, announced in July, of up to £1m in a social investment fund run by the Private Equity Foundation to help disadvantaged young people into employment, education or training. The Big Society Investment Fund will consider more proposals at its Investment Committee in February, where it hopes to make further investments. It is envisaged that this will be the final meeting of the Investment Committee as Big Society Capital is on target to be fully operational by the end of the first quarter of 2012.
Notes to Editors
- It’s hoped that Big Society Capital will be fully operational by the end of the first quarter of 2012. Sir Ronald Cohen, renowned pioneer of venture capital, is the Chair of Big Society Capital Limited, the operating company of the group and Nick O’Donohoe, formerly Global Head of Research at JP Morgan, is its first CEO. In November 2011, Sir Richard Lambert was appointed Chair of The Big Society Trust which will have oversight of Big Society Capital. The Outline Proposal for a “Big Society Bank” submitted by Sir Ronald Cohen and Nick O’Donohoe in May 2011 can be found at: http://www.cabinetoffice.gov.uk/resource-library/big-society-bank-outline-proposal For further information see: http://www.cabinetoffice.gov.uk/content/big-society-bank
- The Big Lottery Fund (BIG), the largest distributor of National Lottery good cause funding, is responsible for giving out 46% of the money raised for good causes by the National Lottery. It also uses its expertise in grant-giving to distribute funding other than Lottery funding. BIG has been directed by government to distribute £5million of dormant accounts funding through the Big Society Social Investment Fund.
- The Finance South East Group comprises the fund managers FSE Loan Management, FE Loan Management, operating as Finance East, and South East Fund Managers, which invest in small and medium sized businesses, as well as FSE Investor Networks, a group of business angel networks and clubs operating throughout the UK. In addition the group provides Investment Readiness and Mentoring services to support high growth companies. For further information please see: http://www.financesoutheast.com/ourfunds/index.aspx?id=1778
- FranchisingWorks (FW) is a social enterprise that has been set up by the Shaftesbury Partnership, a recognised social venture intermediary. FW acts as the intermediary between potential franchisees and the franchisors enabling unemployed people to overcome the financial barriers to starting a new business and creating jobs through franchising. The FW Licence Fund helps potential franchisees overcome the financial barriers to acquiring a franchise business, especially in areas of low economic activity and among individuals who lack the personal financial resources to start-up new businesses. FW has developed the Licence Fund as a social investment mechanism that purchases licenses from reputable franchisors on behalf of candidates in exchange for a share of revenue.
- The Social Stock Exchange (SSE) will develop a securities exchange, a social stock exchange, and a secondary business, the Early Stage Investment Exchange (ESIE), to build a pool of equity investment ready social enterprises for Initial Public Offering (IPO). SSE believes that such an exchange is fundamental in creating a thriving social investment marketplace. A stock exchange is a critical market infrastructure through which capital flows, and a formal regulated investment exchange for the social sector will be a key mechanism for providing investment to social enterprises wishing to scale.
- Triodos Bank is one of the world’s leading sustainable banks, established in 1980 in the Netherlands, with a UK office (Bristol) following in 1995. Its mission is to make money work for positive social, environmental and cultural change. The Triodos New Horizons LP (TNH) is the first structure that they have been involved in, which seeks to raise private capital to achieve outcomes which will generate payment by results from the UK Government. TNH will use an innovative programme, based around mentoring, psychometric measurement and mental resilience, to improve educational, training and work outcomes for vulnerable young people in Merseyside. The TNH ‘end to end’ programme will focus on preparing and supporting young people for key points of transition from education Key Stages 3&4 (14-16 year olds) and from NEET (Not in Employment, Education or Training) to EET (in Employment, Education or Training).
- For further information on the first investment agreed by the Big Society Investment Fund please see: http://www.cabinetoffice.gov.uk/news/big-society-bank-launched.