CREATION OF A SOCIAL INVESTMENT BANK PROPOSED
The Commission on Unused Assets, set up in 2005, has proposed that a Social Investment Bank should be set up to encourage the third sector to grow and thrive by enabling a broader range of finance and greater access to appropriate private sector funds. Unused assets are monies in financial institutions that have been untouched by their owners for a considerable period of time. Countries including the US, Ireland, Australia, New Zealand and Spain have legal frameworks in place for putting these assets to productive use.
The bank would channel finance through a range of specialist intermediaries and multiply the impact of unclaimed assets through gearing and by attracting additional capital to the sector. It would initially need to be capitalised with 250m pounds and have an annual income of 20m pounds a year for at least four years. It would act as a powerful wholesaler of capital and as a financial adviser to intermediaries that are in turn providing finance to third sector organisations. It would spearhead the financial development of the whole sector.
Under the proposals the bank would offer grants of up to 25,000 pounds to provide the expert help needed to assess the feasibility of asset transfer from the public sector to the third sector. There would be additional funding of up to 350,000 pounds to develop partnerships and improve governance and management capacity.
The National Council for Voluntary Organisations criticised the proposal because there is no provisions for the funds to be used to support the gaps in sustainable funding for voluntary and community organisations.