Now put our money where your mouth is Mr Cameron
It is undoubtedly a good idea to take the £400m which has been lying forgotten for 15 years or more in dormant bank accounts and put it to a socially useful purposes. That is what David Cameron will announce today. And the cash is to be half-matched by a £200m donation from the big four high street banks. The resulting Big Society Capital bank, as it will inelegantly be known, will then lend the money, via intermediaries, to social enterprises, mutual societies and associations, charities and voluntary groups.
A banker might object that £600m is not very much. The new bank will certainly be a minnow next to leviathans like RBS, Barclays and HSBC whose balance sheets are bigger than the annual national income. But total social investments in the UK were estimated last year at only £200m. In that context the new bank could make a significant difference to putting some flesh on the vague notion which is David Cameron’s Big Society which he defined, when he announced it in 2009, as an vision to “take power away from politicians and give it to people”. In one sense there was nothing new in that. Charities, volunteers and community activists already existed as part of what Edmund Burke famously called the “little platoons” which stand between the individual and the state. The question is whether Mr Cameron can meaningfully extend that in new ways.
Critics have suggested not. They see the Big Society as waffle to disguise the impact of billions of pounds worth of cuts in public services, a good deal of it from the budgets of publicly-supported charities and community groups. Local people taking over the running of their local library, swimming pool, village shop or post office will not fill a gap of that size.
How the Big Society Capital bank works will put Mr Cameron’s rhetoric to the test. If it supports enterprises which are a poor replacement for a proper public service he will stand condemned. The same will be true if it proves just a new system to encourage vulnerable charities to borrow money – or to provide the capital needed by civil servants and public officials to buy out parts of the health service, social services or schools and transfer the ownership of existing social enterprises from the state to their employees.
The Big Society cannot simply be a replacement for properly-funded public services it must be an adjunct to them. It must pump-prime new activities which empower ordinary people and groups at a more local level. It must be a way of endowing the poor with the capital which laissez-faire capitalism has denied them. It must mean new credit unions, resident’s associations and playgroups and the development of new businesses in areas of acute deprivation which have been abandoned by mainstream banks and investors. It must back ventures whose purpose is explicitly social, providing advice and services to the very poorest.
The Big Society should have been a philosophical underpinning for the reform of public services this Government has undertaken. Yet it could never have been a mere veil for cuts for much of what it implies requires, in some areas, more funding not less. But there has been an incoherence in the government’s approach. For all the rhetoric there has been no upsurge in charitable giving or volunteering since the Prime Minister first launched the initiative three years ago. Indeed spending cuts are in danger of decimating the ranks of the country’s volunteers, sector leaders have warned. And the recent Budget has made philanthropy harder not easier.
The Prime Minister’s much-vaunted “localism” was supposed to “trust people to take charge of their lives” by pushing power, in Mr Cameron’s words, “to the lowest possible level, including individuals, neighbourhoods, professionals and communities as well as local councils and other local institutions”. So far he has not delivered. How the Big Society Capital bank works will be a test of his true intent.