social enterprise

This article is provided courtesy of the news feed at http://www.newstartmag.co.uk/news

A social investment wholesale bank took a step closer to becoming reality today when chancellor Alistair Darling committed ‘up to £75m’ start-up funding in his pre-budget report.

The government said that the bulk of its proposed funding will come from the dormant accounts scheme.

The pre-budget report said that the government will ‘take forward further work towards the creation of a new institution’.

It said the bank will increase investment for social businesses, support community development finance institutions and credit unions and contribute to innovation in public service delivery.

‘The bank would be mission-driven, operate at a wholesale level and be independent from government’, it said.

Stuart Etherington, chief executive of the National Council for Voluntary Organisations, welcomed the move but said that extra funds will be needed to support the bank.

‘The commitment to up to £75m from dormant bank accounts is important,’ he said.
‘But we have always argued that this alone will not be sufficient and that government should look to additional ways of capitalising the social investment bank.’

Full details of the model for the bank, which will be independent from government, are to be announced in next April’s budget.

Mr Darling also announced plans to 'explore options' on greater transparency on how banks provide services to disadvantaged communities, which chief executive of Urban Forum Toby Blume called a 'crucial first step'.

The Community Development Finance Association welcomed the launch of a new Growth Capital Fund to support small businesses, but said that it must make capital available to CDFIs to get credit flowing to deprived communities.