Well, it was into the Lions' Den yesterday. A meeting with Angela Knight of the British Bankers Association. Proved a fruitful meeting as we talked though where things are at on the Big Society Bank. From everything she told me it looks like this important new initiative is going to be too small scale. A worry.
I'm worried that the Government, which has been placing a lot of emphasis on the Bank, does not realise it's potentially going to appear a damp squib. So unless the PM can deliver the commercial banks to put proper loan funds into the Bank it is going to just fuel cynicism in our sector.
The need for access to capital is crucial for growth. It's crucial for third sector bodies who want to grow and compete big time. Of course we need important new ways of funding like impact bonds but we also need straightforward loans. As I am tired of repeating when the Government mistakenly closed Futurebuilders applications were running at between £60-90m A MONTH. These are for loans the banks won't touch. And yet the FBE default rate is at around only 2%! The new bank will have only around £60m to start off. Is that BIG? Hardly. And I doubt the Government want jibes about the small society bank.
I could not be a stronger supporter of the new Bank but unless it gets access to a £2 billion pot it cannot make the difference we want.
My discussions with Angela rather confirmed my concern about size. But the good news is that we are planning a round table to discuss this all further.
I also had a couple of replies from the letters I had written to the big four bank CEOs. The CEO of Lloyds couldn't be bothered to reply himself so I got the usual brush off letter from the "Executive Assistant". Hardly impressive. However the CEO of RBS, Stephen Hester, did respond and took the trouble to deal with the issues I had raised. I'm following through with our good friend Hugh Biddell later today.
The banks could be really crucial lenders to the sector. The experience of the States is that social lending and loans to the third sector can be profitable for both parties. So we do need to work with the banks to see how we can make the case. Persuade them to lend to the sector. To finance our growth in the light of service delivery opportunities for the sector.
This is the big frontier for charities and social enterprises. It would be good if the banks realised there is an opportunity to work with us, not in the usual patronising CSR way but as commercial propositions. We need to move beyond being patronised.
I was delighted to see that Sir Stuart has joined with me in calling on the bankers who receive big bonuses to think about how to donate some of that to charity. We need to ramp up giving in this country. When the two sector Knights call on the banks to take arms on behalf of the poor let's hope they respond generously, as many (but not enough) have in the past.
Debra Alcock-Tyler has written a splendid article in Third Sector on how Government is reinventing the wheel with their community organisers plans. There isn't anyone in our sector who thinks these plans are sensible. Instead of building on what is there already. Building on the wisdom and experience of the community sector and its splendid umbrella bodies like the Community Alliance they go for a year zero approach. It's the problem with all new Governments. Labour was the same in '97. It's got to be new and shiny. All the century of experience of community development is consigned to the "old hat" tray. Read her article.
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