New independent bank needed to complement Big Society Bank, say chief executives

Acevo and the Social Investment Business also call for reforms to community investment tax relief

A social investment retail bank should be set up to complement the wholesale services provided by the Big Society Bank, according to a new guide produced by Acevo and the Social Investment Business.

Understanding Social Investment, jointly published earlier this week by the umbrella body for chief executives and the social lender, says that funds from Futurebuilders England, Communitybuilders and the Social Enterprise Investment Fund –  government-backed grant and loan funds managed by the SIB – should be transferred to a new, independent retail bank.

The guide also recommends that the government reform community investment tax relief, which can be claimed on loans for social purposes. The guide calls the system "badly flawed".

It says CITR should be available for a longer period of time, for larger deals and on equity-type investments. The new Big Society Bank should also have the power to decide where it should best be targeted, it says.

It also proposes that a tax credit system, similar to the Landfill Tax Credit or carbon credits, should be applied to banks that lend money for social purposes.

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