Fire up debate about social investment wholesale bank, sector urged

Social entrepreneurs should spend the next ten weeks getting their contacts interested in the proposed social investment wholesale bank, says one of the champions of the idea.

The government consultation on the functions and design of the bank, which is open until 7 October, has yet to cause debate in mainstream financial press. This is despite the fact the creation of the bank by the UK government would be a world first.

'Instead of blaming government for not talking to the right people we should be connecting them to the right people and ensure the relevant voices are heard,' said development director of Social Finance Toby Eccles.

'Many of those involved in the social investment market are those talking to socially motivated investors and we should all be looking to connect them into this consultation process.

'It's understandable that those investors haven't had this as a priority until now but understanding what the bank can do for them is crucial.'

Social Finance is widely expected to compete for the contract to run the investment bank. The company links third sector organisations with financial products and potential investors and was set up with the support of the chairman of the Social Investment Taskforce and the Commission on Unclaimed Assets, Sir Ronald Cohen.

But Eccles would not comment on this, saying only, 'Let's see what comes out of the consultation'.

He did offer his opinion on one of the key questions in the consultation - who should own the bank?

'My personal view is that this should be owned by a shareholders' college of representatives from a range of third sector organisations, social investors, financial institutions and government - potentially something like 30 members.

'A board of a future social investment bank would be answerable to the college of shareholders so if it starts going off piste the shareholders' college can bring it back in line. This avoids the bank being owned by any narrow interest group.'

He also suggested the bank should come under the auspices of a parliamentary select committee rather than a government department.

'This would save it from being a political football caught up in ministerial short-termism,' he said.

The consultation has been criticised for not including details of how much money would be available from the dormant accounts of financial institutions to be invested by the bank in good causes.

Eccles said: 'It would be great if it mentioned how much money is available...but I think the priorities for any government conversation with banks at the moment is about restarting lending and not dormant funds.'

Community Development Finance Association CEO Bernie Morgan said there was a danger of getting mired in 'challenging discussions' around the bank when the point to focus upon was the 'golden opportunity' it offered.

'There are clearly some complex issues to grapple, some challenging discussions to be had and some differences to resolve, she said. 'We could get mired down and even derail everything if we are not all signed up to a broader vision. So we need to focus on the endgame of a fairer, more just society.'