An inspired idea for our unused riches
Regeneration & Renewal
I’m mightily impressed with the consultation paper issued by the independent Commission on Unclaimed Assets, which proposes setting up a national ‘Social Investment Bank’. It outlines a simple but bold strategy to provide the third sector with the funding system it needs to fulfil its true potential in tackling poverty.
The commission was launched last December by the Scarman Trust, backed by seven other charitable foundations, after the Treasury reached agreement with the UK banking sector that assets in personal accounts that remain dormant for 15 years, can be used for other purposes. It’s gradually emerging that the sum involved is at least £3 billion and could be £6 billion.
The commission, chaired by Sir Robert Cohen, has reviewed the scale of deprivation in the UK and found that poverty has become more concentrated into particular areas which are cut off from investment. Voluntary and community organisations have a significant presence in these areas and offer the best linkage with our poorest citizens but their effectiveness is reduced by inadequate funding. So the commission has concluded that the best way to use the unclaimed assets would be to create an independent financial institution, a social investment bank, that would act as a wholesaler and distributor of investment and financial advice to the third sector.
The bank would aim to blend sector knowledge with financial expertise.
The report talks about a ‘hub and spokes’ bank model. Its hub would provide specialist expertise to raise finance. Its local branches would provide close links with local communities and the organisations that serve them.
But the idea of a community sector just waiting for capital investment to burst into life is simplistic. In many areas, local councils – both officers and elected members – have for years actively discouraged and obstructed community initiatives. The confidence and competence of community leadership is patchy and in some of our most discouraged neighbourhoods could be completely extinguished.
The challenge for a social investment bank must be to get investment into the areas that most need enterprise and wealth creation but that wouldn’t even apply. The commission is quite right – only the third sector could potentially stimulate a ‘deal flow’ in our most deprived communities.
It’s a visionary idea.