The Big Society Bank will open next spring with at least £60m to dish out, minister for civil society Nick Hurd said yesterday.
“Don’t expect less than £60m when it starts,” Hurd said in a panel session at the Good Deals conference. “It will be given some direction to invest in youth projects but in general it will respond to the marketplace.”
Last week Hurd confirmed that the government expected the total amount available to the Bank from dormant bank accounts in England would be in the region of £300m to £400m.
But yesterday he issued a plea to social business leaders and entrepreneurs to make sure the Bank will have something to invest in when it opens for business.
“Please let’s work together so when the Bank finally comes online it will hit the ground running with ideas,” he said.
On social investment in general, Hurd said the huge prize would be to prove it was an asset class, even if it was at the margins of funds under management.
Sir Ronald Cohen, chairman of the social investment taskforce and the Commission on Unclaimed Assets, told Hurd that the Bank should not be constrained by a wholesaler definition: “We have to be careful in defining it as a wholesale bank and give it the ability to fill gaps in the market. Also we need to back social entrepreneurs who have an idea that may seem unconventional.”
Cohen also said that government needed to create incentives for social investment and said there could be a tenfold increase in social investment by foundations if the Charity Commission issued progressive guidelines.
Nick O’Donohoe, global head of research at JP Morgan, added that social investment was an emerging asset class, valuable from a reputational point of view and long-term return.
“The realisation of social investment continuum will be one of the biggest trends over the next ten years,” he said.
He said, however, that the social investment market was being slowed down by a lack of indices and metrics but to create these would take time, and patience was needed.
“Of 1,100 organisation surveyed by JP Morgan on social metrics, only 2 per cent did it themselves, he said.
