What Role Should the Big Society Bank Play?

For those of you not familiar with the BS Bank, it is a wholesale bank to be funded in part by unclaimed assets, with some added funds injected by the high street banks. It will have a start-up balance sheet of £300 million, with more to come from unclaimed assets. I will be surprised if its size does not exceed £1 billion in five years or so. In the aftermath of Cameron’s speech, it has been suggested that the Big Society Bank’s fund could be like fish bait, used to attract others to Big Society projects. I hate the analogy, but also feel strongly this metaphor highlights precisely what the BS bank SHOULD NOT do.

Throwing bait on the water, or placing it at the end of a hook to catch fish is an intiating action. It gets things started and may potentially attract fish or not. By virtue of the BS Bank having the biggest bucket of bait on the wharf, it will no doubt attract schools of fish, or to leave the horrid fishing analogy; whatever projects it initiates will generate interest–people will try to follow its lead.

It should not be in the lead. The BS bank should become a faciltator, an enabler of projects which others have developed, taken to a certain stage, but lack the wherewithal to bring to fruition. The Big Society Bank can leverage off the efforts of those initiators, check to see whether or not there is sufficient interest, and then add its support. Then it will not be distorting the market, something the Government has repeatedly assured us it is trying to avoid, but rather accelerating it and helping it to take shape. The difference may feel a very fine line to some, but feels to me, and to us at ClearlySo, to be fundamental–the difference between backing winners and making them.

If we are so keen on applying the fishing metaphor, the BS Bank should provide a net with which to help the fisherman (with his or her own rod and bait) bring the fish into the boat once it has been hooked. If it feels generous (and it should, with £300 million) it could also lend the boat!