Big Society Bank

Nick Hurd Excerpts

Monday 21st March 2011 Written Statements

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

On 14 February, the Minister for the Cabinet Office and I published a strategy to grow the social investment market, giving charities and social enterprises access to new capital to help them to increase their impact. The strategy explained the central role of the big society bank as a cornerstone of the market, acting as both a champion and wholesale provider of capital.

In February we also announced that we would work with leading social investment experts to develop a proposal for the establishment of the big society bank as an independent private sector organisation. Since then, we have been engaging with the social investment sector, and we are pleased with the ideas coming forward. Today I would like to update the House on the next steps.

As we announced in February, Sir Ronald Cohen, former chair of the social investment taskforce, and Nick O’Donohoe, former global head of research at JP Morgan, are taking the lead on developing a proposal for a big society bank. They are engaging with the sector, and we expect that they will present their proposal to Government within the next few weeks. At that point, we expect to make an in-principle decision about whether the organisation they are proposing to establish could be the recipient of unclaimed assets from dormant accounts, subject to further development work and state aid approval. If the decision is made to go ahead, detailed set up work for the big society bank would then be able to commence, including recruitment of its chair and board.

By making this statement today we want to ensure that everyone has the opportunity to feed in comments on the development of the proposal, or on our approach more generally. Separately, we are currently working to secure the state aid approvals from the European Commission that would be needed in order to capitalise an independent big society bank with money from dormant accounts and to provide it with the flexibility it needs to grow the market. We are also working with the big lottery fund on interim arrangements that will enable investments to be made as soon as dormant accounts money becomes available in the summer, using existing state aid exemptions. We will make further announcements in due course.