The Big Lottery Fund has launched a £5m social investment fund, using money from dormant bank accounts, which will invest in social finance intermediaries while the Big Society Bank is being set up.
The bank, which is expected to start with about £300m, will act as a long-term wholesale lender to the sector, but is waiting for approval from the European Commission under rules that prevent countries providing unfair financial advantages to businesses. It is likely to start operating at the end of the year.
The new pot of cash will be used to support about five different proposals. Decisions about funding will be made by an interim investment committee chaired by John Kingston, founder director of the social lender Venturesome. It will shut down once the bank gets under way.
"We want this fund to begin the process of building the diversity and resilience of the social investment market by investing in well-managed, ambitious and financially sound social investment intermediaries," said Kingston.
Other members of the committee are Sir Ronald Cohen and Nick O'Donohoe, independent advisers to government on the Big Society Bank, Nat Sloane and Anna Southall, England chair and vice-chair respectively at the Big Lottery Fund, and Dawn Austwick, chief executive of the Esmée Fairbairn Foundation.