Big Society Capital, formerly known as Big Society Bank, had its regional [WM] launch at All Saints Action Network today and I was fortunate enough to be there dead centre on table 5. The event was organised by Social Enterprise West Midlands and there’s also a little coverage on Midlands Today which can be seen here.
What’s it about?
Big Society Capital is the long-awaited social investment programme that will use dormant bank accounts and some other finance from Merlin banks. Altogether this amounts to £600m worth of social investment capital. It must be noted here that this is investment and therefore has expected returns on investment, it is not grants. After all BSC will need to pay for it’s estimated 40 or so staff! [see also below a second tier of administration]
How does it work?
Nick Hurd MP and Nick O’Donohoe [CEO] introduced the aims and objectives of Big Society Capital and outlined how it expected to work.
BSC is not going to invest in social enterprise directly, but will do this through intermediaries such as Community Development Finance initiatives [CDFI's] and other social investment intermediaries such as Clearly So, or Big Invest. One thing to note here is that both Nick’s said that there isn’t enough intermediaries and many are not big enough and therefore some elements of the work will be to increase the size and capacity of intermediaries. Market opportunity number one, it strikes me that crowd funding sites, business angel organisations etc… could be ‘quids in’ here [couldn't help it].
Don’t be holding your breath now, but it may be worth getting your business plan in order to become investment ready. Whilst BSC is now in existence and has around 6 staff [which will grow as indicated earlier], there are though a number of hurdles that need to be straddled first:
- There’s a state aid problem to get through first – to be honest I was a little lost here as investment that requires a return to me can’t be seen as aid, can it?
- Then theres a little thing called regulation i.e. FSA regulation that still needs to be progressed and
- then there’s cabinet approval
Nick O’Donohoe suggested a timescale of 4-6 months, so set your Outlook calendar to remind you in the new year and get your business plan sorted! [Don't forget my CIC can help with Business Planning]
One more market opportunity [that although crossed my mind] I can’t claim full credit for as it was also pointed out a little later by Nick Hurd MP. If you’re in the game of looking at ‘pay by result’s’ contracts which many of us are, perhaps there is some discussion to be had with the intermediaries to create consortia and ‘risk capital’ to take on some of these contracts?
I’m sure I’ll update some more on this as it progresses. Think I need to do a piece on crowfunding too!
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