MP accuses Cabinet Office of 'dithering' over the Big Society Bank

Minister Oliver Letwin responds that the bank will start in the 'not-too-distant future'

Cabinet Office
Cabinet Office

Oliver Letwin, a minister in the Cabinet Office, has denied accusations that his department is dithering over setting up the Big Society Bank and promised it will come into existence "in the not-too-distant future".

During Cabinet Office questions in the Commons yesterday, Tom Blenkinsop, Labour MP for Middlesbrough South and East Cleveland, said the government had promised last year that the bank would be making loans by April. He said the government was dithering and this was unlikely to happen until the end of the year.

Harriett Baldwin, a Conservative backbencher, asked when the bank was likely to start making loans.

Letwin replied: "The Big Society Bank is quite a complicated proposition. We have to organise it and find the funding for it.

"Although we hope to be able to progress it at a reasonable rate, I don’t want to give the impression it will happen overnight.

"I anticipate it will be up and running in the not-too-distant future."

The Cabinet Office’s first structural reform plan, published in June, said the first funds from the Big Society Bank would be available in April this year. In its full business plan, published in November, it said only that the bank would be established by April.

Several obstacles must still be overcome before the bank can be established, including the creation of a reclaim fund, which would channel funds from dormant bank accounts into the bank.

If the bank is set up only with funds from dormant bank accounts, it would probably start life with somewhere between £60m and £100m in funds.

But several high-street banks are considering making a contribution of £1bn between them to the Big Society Bank as part of a larger deal with the government relating to lending and bonuses.

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