Big Society Bank will expect "modest" financial returns on investments
Vibeka Mair, Civil Society
The Big Society Bank will expect to receive high social returns alongside modest financial returns from its investments, according to Cabinet Office minister Oliver Letwin, speaking in the House of Commons yesterday.
Letwin, who was answering MPs’ concerns about the Big Society Bank lending on commercial terms, said it would not expect commercial returns like a “hedge fund” but would demand high social return, and reasonable financial returns from its investments.
Letwin also said that the Big Society Bank was still in discussions with four high street banks, who promised two months ago to invest £200m into the Bank “on commercial terms”:
“They are still in discussion around the exact terms of the investments, which will have to be compatible with the social objectives of the Big Society Bank,” he advised.
Along with the expected £200m from the banks, the Reclaim Fund expects to release up to £100m from dormant accounts to the Big Lottery Fund this year to fund the Big Society Bank.
The government is still working on securing state aid approval from the European Commission to enable it to set up the Big Society Bank.
Nick Hurd, minister for civil society, has said that the government is working with the Big Lottery Fund on interim arrangements that will enable investments to be made as soon as dormant accounts start to flow through, using existing state aid exemptions.