New social retail bank 'could unlock £1.5bn in social investment'

Finance | Vibeka Mair | 27 Jul 2010

A new report from Acevo and Social Investment Business advises the government to create a Social Investment Retail Bank to be financed with government funds managed by Social Investment Business.

The report, entitled Understanding Social Investment, recommends that ownership of the funds of Futurebuilders England, Communitybuilders and the Social Enterprise Investment Funds, should be transferred to a charitable trust which would invest in a retail bank that would offer loans, equity-like capital, development grants and business support to civil society.

The approach could raise up to £1.5bn over a five-year period, says the report.

Elsewhere, the report calls the current form of tax relief on social investment "badly flawed".

It says community investment tax relief (CITR), which gives tax relief to investors who back organisations in deprived areas, should be extended to ten years.

It also suggests increasing the size of capital it is possible to raise to qualify for relief to at least £100m and applying relief to equity-like investment.

The report also calls for a new option to allow charitable trusts and foundations to offset payment of taxes such as National Insurance and VAT against CITR credits to "unlock the potential of billions of investments from organisations most likely to support further growth of social investment".

Directory: Association of Chief Executives of Voluntary Organisations (ACEVO) | The Social Investment Business

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