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Cameron launches Big Society fund with £600m

The Prime Minister has launched a new financial institution aimed at driving social investment with benefit to charities, social enterprises and community groups.

The Big Society Capital is part of the Government’s drive to develop sustainable solutions to social problems, and represents a partnership between banks, government and the social sector.

£600m of funds will be available to invest, £400m of which will come from unclaimed cash left in bank accounts for over 15 years. A further £200m will come from the UK’s four largest high street banks; Barclays, Lloyds, HSBC and RBS.

Mr Cameron said: “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. Just as finance from the City has been essential to help businesses grow and take on the world, so finance from the City is going to be essential to helping tackle our deepest social problems.

“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.

“This is a self-sustaining, independent market that’s going to help build the Big Society.”

Sir Ronald Cohen will chair the institution, as a pioneer of venture capital in the UK, who has been using his skills and expertise to champion social investment over the last 12 years.

Former global head of research at JP Morgan will act as the Big Society Capital chief executive.

Sir Ronald added: “What we’ve done for business entrepreneurs we must now do for social entrepreneurs.

“We must give them the resources to innovate in the way we resolve social issues.

“Big Society Capital aims to transform the flow of capital into the social sector and to boost significantly its ability to improve people’s lives.”

The fund will look for projects that blend financial return and positive social impact, through socially orientated investment organisations.

John Bird, founder and editor in chief of the Big Issue, said: The social enterprise world has been awaiting eagerly the launch of Big Society Capital as it heralds a new phase for social entrepreneurs in this country.

“Big Society Capital will provide £600m more social investment, encouraging everyone to start making money and do some social good.”

Tim Smit KBE, chief executive of Development at the Eden Project, said: “Big Society Capital will make it easier for social entrepreneurs to secure the finance that they need so that they can build and grow the next Eden Project, the next Fifteen or the next Cafe Direct and is a hugely needed encouragement to the sector and an acknowledgement that Social Enterprise in general and Social Entrepreneurs in particular can bring growth in areas where “business as usual” has struggled.

“It also throws down the gauntlet to all of us in the sector by saying “we hear you…now prove your argument”.

“This is an exciting challenge and the promoters of Big Society Capital should be applauded for their far sightedness and willingness to make an informed commitment to a mixed economy that will encourage and stimulate growth in areas previously starved of resources and a champion.”

In addition to the Big Society Capital, the Government is launching a programme called Inspiring Impact, to accelerate social impact measurement, co-ordinated by New Philanthropy Capital, to enable frontline charities and social enterprises to deliver better outcomes for society.

This was posted in Bdaily's Members' News section by Tom Keighley .