Rumours in Westminster and the City suggest
a deal in the making: the banks make a significant payment to the Big Society
Bank. In return, ministers shelve ideas about new taxes and restricting
bonuses. I have some advice for the negotiators.
Firstly, this is likely to be a very good deal
for the bankers. Five billion pounds sounds generous but would amount to only
70p for every pound paid in bonuses last year.
Ministers might also recognise the figure.
It is, the Charity Commission says, the gap in third sector funding resulting from local authority expenditure
cuts. Settle for nothing less.
The unclaimed assets, which are already
destined for the Big Society Bank, must not be included in the calculations. These never
“belonged” to the banks any more than the cash in a post office
savings account “belongs” to the post office.
Setting aside the primary questions about
the morality and fairness of such a deal, I am encouraged by government’s
apparent and implicit recognition that something must be done. Let it be
Local and national spending cuts are
threatening to devastate third sector services for the most vulnerable.
Preventative early action work is particularly suffering as the urgent is
prioritised above the important – a desperately misguided “economy”
which will swiftly and inevitably increase the need for essential and expensive
Capitalising the bank with much more than can be drawn
immediately from unclaimed assets and then enabling it to spend on sustaining
preventative work with those most at risk will avoid incurring much higher and,
by then, unavoidable costs – social, financial and ultimately political –
within the lifetime of this government.
And be clear, the new Big Society Bank must
spend as well as lend. I’m an enthusiast for social enterprise and a
of social investment. The unclaimed assets must, as already planned, be
ring-fenced and lent for this purpose. But many essential services for
vulnerable will never be self-sustaining. It is these services that are
likely to survive a harsh winter, and it is the public funding of this
that marks out our economy as that of a civilised and compassionate
A good deal hangs on your best judgement. Be bold.
David Robinson is the co-founder of Community Links, a charity that helps disadvantaged local people