Minister for the Cabinet Office Francis Maude has today (9 May 2011) endorsed outline proposals for the development of a Big Society Bank presented by the Independent Advisers, Sir Ronald Cohen and Nick O’Donohoe.
The minister has also directed the Big Lottery Fund to establish an interim Investment Committee which will use dormant account money it has received to start making investments from this summer.
The Big Society Bank will become fully operational following State Aid approval and Financial Services Authority authorisation. It will act as a wholesale investor for social investment and champion the sector to the public, stakeholders and investors. It will invest capital in intermediaries so that they are able to invest in frontline organisations. It will not make grants. It will also invest in developing a powerful infrastructure for the social investment sector.
In the meantime, the Investment Committee shown below will provide support to social investment organisations enabling them to increase their capability. The Investment Committee will comprise 6 experts in social and financial investment including:
- John Kingston, Director of CAF Venturesome and chair of the Investment Committee
- Chair of Big Lottery Fund’s England Committee or his/her nominee [to be appointed shortly]
- Anna Southall, Big Lottery Fund
- Sir Ronald Cohen, Independent Adviser on the Big Society Bank
- Nick O’Donohoe, Independent Adviser on the Big Society Bank
- Dawn Austwick, Chief Executive of Esmee Fairbairn Foundation
Francis Maude, Minister for the Cabinet Office, said:
Sir Ronald Cohen and Nick O’Donohoe have developed a robust proposal for the Big Society Bank drawing on experience in the social sector. It will be the first institution of its kind anywhere in the world dedicated to growing the market for investments that blend financial and social returns. The interim Investment Committee will ensure that we can start getting additional finance into the social sector as soon as possible.
Nick Hurd, Minister for Civil Society, said:
We want to make it easier for social entrepreneurs to access capital, and we want savers to have more opportunities to invest for good. Today’s announcements are a significant step forward in delivering on our commitments.
Sir Ronald Cohen, Independent Adviser on the Big Society Bank, said:
Over the last 10 years very significant progress has been made in the development of social investment in the UK. Today’s announcement by the government gives the go ahead to the creation of the Big Society Bank. This is a momentous step forward. The Big Society Bank is the first organisation of its kind in the world. We believe it will revolutionise the way that the social entrepreneurs and the social sector are funded in the UK.
Nick O’Donohoe, Independent Adviser on the Big Society Bank, said:
There is some way to go yet in building the Big Society Bank, but today’s announcement is an important milestone as it reflects agreement on the structure and mission of the institution. The next steps will be to work on further defining the organisational structure and investment strategy and to seek the necessary regulatory approvals so that we can get the institution up and running as quickly as possible.
In February this year ministers set out their strategy for growing a thriving market in social investment with the Big Society Bank central to delivering this. Over time the Big Society Bank will be capitalised with an estimated £400 million from unclaimed assets in dormant bank accounts, and £200 million from the UK’s largest banks.
Notes to editors
The Minister for the Cabinet Office has written to Sir Ronald Cohen and Nick O’Donohoe to accept their Outline Proposal.
Read the Big Society Bank outline proposal.
The government’s Social investment strategy is available on GOV.UK.
Reclaim Fund Limited has been established by Co-operative Financial Services to manage the reclaim fund into which money from dormant bank accounts is being deposited.