The Big Society Bank

In a speech this week David Cameron relaunched the government's plans for a "Big Society". This aims to empower communities, open up public services, and encourage people to take a more active part in society. The Big Society has been much commented on since its launch last year. Its impact upon the voluntary sector remains hard to quantify, particularly in light of the recent public funding cuts.

As part of the push for a Big Society the Cabinet Office has published a new paper "Growing the Social Investment Market: A Vision and Strategy". This recognises the current and potential contributions made by social entrepreneurs to our communities. Social entrepreneurs are a growing phenomenon. They offer innovative and creative solutions to society's problems to produce businesses which are both ethical and commercial. The government aims to give social entrepreneurs easier access to capital so that they have the initial finance needed to establish new projects and ventures and to re-vitalise public services. The document published this week also shows that the government recognises the importance of social investment. This is investment which places a value on both financial returns and social returns, such as ethical ISAs and social pension funds.

The paper also outlines the government's plans for the Big Society Bank. This is a new independent body with social aims and objectives. It will champion the social investment market and give social enterprises, charities, and community organisations access to greater resources. It will not make grants to these organisations but will instead act as co-invest or, underwriter or guarantor allowing the creation of new financial products for social investment, financing for new social enterprises, and the purchase of community assets. The Big Society Bank will begin operating in April 2011. A number of the largest UK banks have already injected £200m of capital into the Big Society Bank on commercial terms. It will also be funded through money released from the dormant accounts scheme.

The proposals announced this week and particularly the launch of the Big Society Bank could herald a new and dynamic time for social enterprises and for the entrepreneurs of the future.

If you are thinking about setting up or financing a social enterprise or would like further information, please contact Tamasin Perkins on +44 207 440 7420.