Tuesday, 3 August 2010

The Banks

Aren't they wonderful! So good that they have returned to profitability (though not through any support for small business or the third sector). As Newsnight presciently put it "The Banks are rolling in money again, so why are they not lending to us? ".

The banks PR remains a marvel. Did you read about one of them describing how RBS's Goodwin had been victimised in the same way as the Nazis had behaved to the Jews on Kristallnacht! Last time I noticed he was nursing his millions in Scotland rather than incarcerated in a concentration camp. A disgusting example of how arrogant bankers can be. I bet that guy gets a bonus too!

And they are still failing to loan to charities and social enterprises. If the sector is to grow we will need access to capital. If we stand any hope of competing successfully in the DWP Work Programme we will need capital. And talking to members who have been approaching the banks for loans to underpin their work programme contracts most are reporting nil response.

Will the Big Society Bank fill the gap. Answer is No. An interesting piece on "You and Yours" with the guy from the Co-op, who are running the dormant asset fund saying eventually they may have £400m but much further down the line. Initially he says it will be only £60-£100m. Now that is helpful obviously, and the banks ought to be getting their act together in handing over the money, but it will meet only small scale loan applications.

So more action is required by Government. Government needs to exercise its shareholder stake in Lloyds and RBS to force them to loan to SMEs and the third sector. We need a UK Community Reinvestment Act. The banks need to look at support for community banks and other existing institutions in the sector like the community development finance bodies, as well as more Government support for SIB and others to make loans to supposedly "unbankable" proposals from the third sector.

And talking of Newsnight, did you see their spot on "Big Society" in Hastings? Nick Hurd being interviewed over tea on a roundabout! He did admirably well to keep a straight face.

I too had an interview yesterday, though fortunately not on a roundabout, though I did need to do a walkabout in my office as well as the more formal interview. For Sky. On Big Society. One thing has to be said for the concept, I doubt if our sector has ever had such a spell in the media, or had quite so many policy wonks pouring over us!

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