Big Society Bank
Encyclopedia
The Big Society Bank is a bank planned by the UK Government to help finance projects under the banner of the Big Society
. Launched by Prime Minister David Cameron
in July 2010 the BSB is expected to begin operations in Q3 2011. Minister for Cabinet Office Francis Maude
claims that the BSB will be instrumental in creating new financial products such as social impact bonds and said that "it will be easier for social enterprises to fund themselves so they have cash flow". Its initial capital is to be provided from money from dormant UK Bank Accounts, and a further £200M from UK banks. The government also plans to encourage some of the £95bn of charitable assets to be invested in the bank.
, Thomas Hughes-Hallett, chief executive of the Marie Curie Cancer Care
said: "it is potentially setting up a system to encourage vulnerable charities to borrow money." In January 2011 Banco Santander who have major retail banking
interests in the UK, withdrew from Project Merlin
negotiations with the Government and is expected not to make any direct payments to the BSB.
The FT
suggests that it is "a tiny acorn from which it is far from certain that a giant oak will grow. But there are some very exciting ideas ...which could help society and government tackle issues that have always struggled to obtain funding in the past"
Management Today says that "There’s nothing wrong with the idea, or the model, or even the pot. But this plan still seems to lack some hard-headed commercial nous" [i.e., business understanding or experience].
Big Society
The Big Society was the flagship policy idea of the 2010 UK Conservative Party general election manifesto. It now forms part of the legislative programme of the Conservative – Liberal Democrat Coalition Agreement. The aim is "to create a climate that empowers local people and communities, building...
. Launched by Prime Minister David Cameron
David Cameron
David William Donald Cameron is the current Prime Minister of the United Kingdom, First Lord of the Treasury, Minister for the Civil Service and Leader of the Conservative Party. Cameron represents Witney as its Member of Parliament ....
in July 2010 the BSB is expected to begin operations in Q3 2011. Minister for Cabinet Office Francis Maude
Francis Maude
Francis Anthony Aylmer Maude is a British politician. A member of the Conservative Party, he currently serves as the Minister for the Cabinet Office and Paymaster General, and as a Member of Parliament representing the constituency of Horsham...
claims that the BSB will be instrumental in creating new financial products such as social impact bonds and said that "it will be easier for social enterprises to fund themselves so they have cash flow". Its initial capital is to be provided from money from dormant UK Bank Accounts, and a further £200M from UK banks. The government also plans to encourage some of the £95bn of charitable assets to be invested in the bank.
Mission and Terms of Reference
The Bank’s mission will "be to catalyse the growth of a sustainable social investment market, making it easier for social ventures to access the finance and advice they need – at all stages of their development.". It will be independent from Government and will act as a wholesaler, not investing directly in projects but "will invest in products developed by intermediaries and encourage others to do likewise"Reactions
The principle of the Big Society Bank has met with criticism from diverse groups including banks and charities. Giving evidence to the Public Administration Select CommitteePublic Administration Select Committee
The Public Administration Select Committee is a Select Committee appointed by the British House of Commons to examine the reports of the Parliamentary and Health Service Ombudsman and to consider matters relating to the quality and standards of administration provided by civil service departments,...
, Thomas Hughes-Hallett, chief executive of the Marie Curie Cancer Care
Marie Curie Cancer Care
Marie Curie Cancer Care is a charitable organisation in the United Kingdom which provides nursing care, free of charge, to terminally ill people, giving them the chance to choose to be cared for at home...
said: "it is potentially setting up a system to encourage vulnerable charities to borrow money." In January 2011 Banco Santander who have major retail banking
Retail banking
Retail banking is banking in which banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and transactional accounts, mortgages, personal loans, debit cards, credit cards, and so forth.-Types of...
interests in the UK, withdrew from Project Merlin
Project Merlin
Project Merlin is an agreement between the British Government of David Cameron and four of the major high street banks in the United Kingdom. These banks are Barclays, Lloyds Banking Group, the Royal Bank of Scotland and HSBC...
negotiations with the Government and is expected not to make any direct payments to the BSB.
The FT
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
suggests that it is "a tiny acorn from which it is far from certain that a giant oak will grow. But there are some very exciting ideas ...which could help society and government tackle issues that have always struggled to obtain funding in the past"
Management Today says that "There’s nothing wrong with the idea, or the model, or even the pot. But this plan still seems to lack some hard-headed commercial nous" [i.e., business understanding or experience].