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Futurebuilders surprised at 'sour grapes' by Triodos and Charity Bank

Finance | Tania Mason | 10 Mar 2009

Futurebuilders is “surprised and disappointed” that Charity Bank and Triodos Bank saw fit to publicly criticise the Department of Health for awarding it the contract to run its new £100m Social Enterprise Investment Fund.

Earlier this week the two social lenders issued a statement saying that the decision to award the fund to Futurebuilders could “undermine social financiers” – such as themselves – because “short-term funding solutions from government risk displacing existing sustainable private sector capital”.

They said: "It provides yet more money to a government funder which is relatively new to the social finance market, unaccountable to a financial regulator or to wider stakeholders, and which fails to pay a return to investors - factors which raise important questions about how sustainable it really is.”

Taken aback by banks’ outburst

Futurebuilders market development director Gill Nunn (pictured) said her team was genuinely taken aback by the attack.

“We have been partners with both Charity Bank and Triodos in deals with investees in the past, so it really was news to us when we saw their response as we thought we had good relationships with them.

“I’m not sure whether either of them were part of consortia that entered bids themselves, but we knew we were up against excellent competition, which is why we were so thrilled to win.

“After six months worth of work our submission ran to 600 pages, along with another 200 pages of appendices. The due diligence we all went through was enormous, so we felt the process was so thorough that the Department must have made the best decision.”

Responding to the criticism about lack of accountability, Nunn said Futurebuilders was always very clear about publishing where the money goes to, and felt it was exceptionally accountable to lots of different stakeholders – “the Office of the Third Sector, the Department of Health, the general public, the charity sector”.

Sustainability ‘the essence of what we’re about’

And she said sustainability was “the essence of what we are all about – helping organisations to be far more sustainable longer-term, reducing their reliance on grant income. If people don’t perceive that then we obviously need to talk about it more.”

Nunn said Futurebuilders didn’t want to get into any “mudslinging” with the two banks as it didn’t wish to jeopardise future potential collaborations with them. “If it is just sour grapes I hope it doesn’t last long,” she said.

A Triodos spokesman said it was not involved in bidding for the fund; Charity Bank admitted it was.

Range of financial products

Futurebuilders England and Partnerships UK will begin work with the Department of Health’s Social Enterprise Unit and an independent investment panel from June 2009. The three-year fund will comprise grants, loans, and new equity investment products as well as tailored business assistance.

The contract takes Futurebuilders’ total fund value to £330m.

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Directory: Futurebuilders England