Social investment wholesale bank will be established

But announcement is described as a 'bittersweet pill' by Acevo leader Stephen Bubb

A social investment wholesale bank to provide more capital for third sector lenders will be developed using a ‘fund of funds' structure, the Government announced in today's Budget.

The Government has promised it will invest up to £75m in a fund that will invest money in other social investment funds, and will attempt to leverage more cash from private individuals.

"The Government will work actively with potential co-investors and will look to appoint a fund manager after an open competition, selecting on the basis of their ability to leverage in private capital for social investment," the Budget report said.

Stephen Bubb, chief executive of Acevo and chair of social lender Social Investment Business, who has campaigned for the formation of such a bank, said the announcement was a "bittersweet pill".

"It's good they've announced they'll put £75m into this," he said, "but all the money from dormant bank accounts should have gone into it."

He said he thought the structure of the bank, and the amount of money that might go into it, might change if a Conservative administration took power.

Social Investment Business will look at whether to bid to administer the fund when it knows more details, he added.

Geoff Burnand, co-founder of Investing for Good, which matches social investors and companies, said the fund of fund structure could be a good method for channelling funds into the sector.

"It will be interesting to see how they leverage in capital," he said. "This will be a good opportunity to get cash to existing providers."

 

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