Cameron to launch a 'Big Society Bank' to invest in new community groups

By Tim Montgomerie

A number of today's newspapers, including The Sunday Express and Independent on Sunday report that David Cameron will use a visit to England's North West tomorrow to launch a 'Big Society Bank'. This Bank will have an initial balance sheet of £350m to £400m, all taken from UK bank accounts that have been 'dormant' for 15 or more years. People across Britain will be encouraged to invest in the Bank by, for example, purchasing 'Big Society ISAs' and so expand the balance sheet. The Bank will start making investments from April next year.

In an ideal world the Bank will reward charities that first secure funding from within their communities. Top-down grant-based funding mechanisms tend to detach not-for-profit groups from their communities while matched funding and voucher schemes force groups to look horizontally.

The emphasis is expected to be on small, community-based and start-up poverty-fighting organisations. If true, that is welcome. Too much of the existing voluntary sector has become quasi-state in its outlook because of its dependence on direct government funding. It has come to resemble the state in its bureaucratic way of operating and in its downgrading of moral issues. Most children's charities, for example, became indifferent to marriage and the two parent family - like government funders. Groupthink has also taken control of too many charities. Nearly all environmental charities oppose nuclear power. Nearly all aid charities oppose free trade. At the last election a survey of charities revealed that the voluntary sector was dominated by Liberal Democrat and, particularly, Labour sympathisers.

The Big Society Bank will aim to reaffirm the Coalition's third sector credentials after Labour complained that charities would be £150m worse off because of the 2.5% increase in VAT.

The News of the World reports that the Big Society Bank is being launched at a time when the Coalition is cutting back plans for a Green Investment Bank.