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PM launches Big Society fund

PM launches Big Society fund

Category: Money

Updated: 04/04/2012
First Published: 04/04/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

David Cameron launched the Big Society fund this morning, pledging £600 million for charities, community groups and other enterprises.

The 'Big Society' has been one of the key strands of the Government's policy since it was elected, although it has faced a steady stream of criticism.

However, the Government said that the unveiling of Big Society Capital is 'an important milestone in the drive to grow the economy and build a bigger, stronger society'.

Around £400 million of the funds have been raised from money that has sat in dormant bank accounts for 15 years or more, with £200 million to come from Barclays, Lloyds, HSBC and Royal Bank of Scotland .

Organisations that can prove they can repay an investment through income they attract will be eligible for the scheme, with Number 10 saying the initiative will 'grow the social investment market which blends financial return with positive social impact'.

Prime Minister David Cameron said that for years, the City has been associated with providing capital to help businesses to expand.

"Today, this is about supplying capital to help society expand," he added.

"Big Society Capital is going to encourage charities and social enterprises to prove their business models – and then replicate them.

"Once they've proved that success in one area they'll be able – just as a business can – to seek investment for expansion into the wider region and into the country."

While the scheme is primarily funded by money in dormant bank accounts, the British Banking Association (BBA) has reassured consumers that they can still claim their money if they find a lost or forgotten account.

"Banks have been central to the delivery of the Reclaim Fund which - through Big Society Capital - uses money from customers' dormant accounts for social and community causes," said Angela Knight, chief executive of the BBA.

"But no one with money lying untouched in the bank need worry - cash will be kept back for people who come forward and the BBA's mylostaccount scheme is there to help people search for their funds for free."

The Association of British Credit Unions Limited (ABCUL) said it was pleased that organisations looking to increase financial inclusion, such as credit unions, have been identified as possible beneficiaries of the new social bank.

"Credit unions are social enterprises which create both a social and financial return through providing affordable and appropriate financial services on an ethical, not-for-profit basis to those who are underserved or poorly served by the mainstream," Mark Lyonette, chief executive of ABCUL, said.

"Big Society Capital is therefore right to identify organisations such as credit unions as potential beneficiaries of increased social investment."

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