Banking on rhetoric

Those of us who turned up to the recent RBS SE100 awards were treated to a classic political anecdote from the new Minister for Civil Society, Nick Hurd. Roughly paraphrased, the anecdote went like this: a few weeks ago I met a man in Wales, he was running this project for the local community, it’s been running for a few years and it’s really good. I asked him what would’ve made things easier for him when he was getting started. And do you know what he said to me? He said: “I wish someone had backed us and given us some money.” That’s why we’re creating the Big Society Bank so that people who want to do good in the community and want some money, can have some money.

Exciting social investment bank rhetoric is not a specifically Tory phenomenon. Anyone who heard Labour’s previous incumbent as Third Sector Minister, Angela Smith, talking before the election will have heard similar anecdotes with was then the Social Investment Wholesale Bank cast in the role of hero. The Tories are indeed opening The Big Society Bank for business in April 2011. It’s not yet clear what the bank will do. It’s possible that it will partially replace Futurebuilders, the scheme that has been providing loans for organisations who want to deliver outsourced public services but which the new government is closing. ISAs have also been mentioned.

It’s definitely not too early to predict the Bank’s function in rhetorical terms. At this stage, I can solemnly predict that several key lobby figures will, from April 2011 onwards, make repeated and bountiful use of sentences along the lines of: “As CEO of <insert organisation here> I successfully lobbied for the creation of the Big Society Bank which ensures investment in the communities that need it most.”

And, even more solemnly, I can predict that at least two conference speeches this year will contain a phrase along the lines of: “We are creating the Big Society Bank to effectively channel resources to those who are creating real change in local communities.”

Unfortunately, for both Labour and the Tories (I’m sure the Liberals are also keen) the boring practical details have been a side issue. To an extent that’s because that’s their job. Politicians and sector leaders are primarily there to tell you why thing should happen or are happening, not to fathom out or even necessarily understand how they work.

But the Social Investment Wholesale Bank/Big Society Bank is an idea that’s been knocking around for a couple of years and has been a significant part of both major parties ‘offer’ to the Third Sector/Civil Society (delete as appropriate). It’s been trailed on and off platforms at every conceivable sector conference and seminar and equally lauded and slammed in the pages of sector journals. All without any clear plan for what it will actually do. (Just) some of the many outstanding questions include (in no particular order):

  • Is the Big Society Bank going to be purely a wholesale bank or will it be offering some banking functions directly?
  • Will it be providing cash to specifically defined social organisations or for socially good projects?
  • Is the cash going to come from ‘unclaimed assets’ or from the government?
  • Will the end result be more money available to social enterprises or (with the ditching of Futurebuilders) the same amount or less?
  • Are there really significant numbers of viable social enterprises out there who could sensibly take on loan finance but aren’t getting it from existing institutions? – I’m yet to see any meaningful evidence that this is the case, although I accept and support the call for more equity cash and similar funding.
  • Underpinning all of these questions, what specifically will be achieved by a Big Society Bank that can’t be achieved by supporting existing social finance organisations without setting a big, shiny new thing?

The fact is that the pushing forward of ‘the thing’ – for both major parties and sector leaders – continues with no coherent emergence or even reference to any practical proposals and explanations of how these proposal, to the limited extent that they exist, relate to need. This leads me – I hope wrongly – to conclude that their main priority behind it is the creation of a big, shiny, new thing rather than practical solutions to the challenge of financing social change.

The floor (or the bottom of the blog) is open for cleverer and better informed people to explain to me why I’m wrong.



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4 responses to “Banking on rhetoric

  1. Alisdair Cameron

    You’re not wrong. I’ll also wager that this shiny,shiny new body will have ludicrously onerous bureaucratic requirements to impose upon those applying for, let alone getting, loans, and that the loans will be on terms otherwise indistinguishable from current lenders.


  2. I’ve got a suggestion for how it could be used for social investment because that was the aim of creating a plan 4 years ago for national scale leverage of social enterprise through a social investment fund.

    Loan finance was something we couldn’t get ourselves 6 years ago.

    As politicians they’ve seized on the bandwagon of social enterprise without knowledge or experience and though they may attempt to pass off some of the IP of others as their own, they can’t copy such a plan without copyright violation.

    They simply haven’t thought it through.


  3. beanbagsandbullsh1t


    I might regret asking this but which bit of the current idea are you claiming is your intellectual property?

    Are you saying you’ve got a copyright on the idea of leveraging cash into the social sector and providing loans to social enterprise?


    You’re certainly raising the questions that have been unanswered by previous and existing social finance schemes – many of which do (or have done) good work but very few of which have ever backed the sort of low return but relatively high risk projects that the Big Society agenda will depend on.


  4. Pingback: Big Society Bank quite small « Beanbags and Bullsh!t

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