Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 100 - 101)



  Q100  Mr Love: Can I ask the Charity Bank—and it comes back to this issue about the balance of the way the way that the money is used, following on from the point that the Chairman has just made—often people who will want to access funding in some form will be considered by the organisation not to have the capacity to do that and therefore they may be rejected. To what extent will they team up with that end of the organisation that is providing grants to fill the capacity to ensure the smooth transfer from an organisation that is not capable to one that is capable, to one that can then give, and what would be the balance of funding between the two? If you do what George is suggesting, spend more money in deprived areas, will that not shift the balance from lending or giving money to help them to capacity building?

  Mr Hayday: Initially because of the need, if you like, to develop the market place there would probably be a disproportionate emphasis on capacity building and grant maker, but what we are beginning to see in the voluntary sector already are grant makers, lenders, venture capitalists working together to prepare mixed funding packages to meet the various levels of risk inherent in many of these operations, and I think uniquely in a way that this moment of time with the unclaimed assets enables us to put some real weight behind that type of mixed economy of funding.

  Q101  Mr Mudie: Triodos say that the market is already there for this capacity building—the market is already there, players like yourself are there. Is the Social Investment Bank just coming into a market that is already being served and unnecessarily.

  Mr Hayday: Chairman, realistically we are talking about something that probably is not going to see the light of day for another two or three years by the time that legislation and everything has been enacted. At that point I would see a market place that is going to be in very real need of wholesaling capacity and therefore I think we must plan now for a social investment bank that will actually be operational in two, three, maybe four years' time, at which point many of the organisations that started three, four, five years ago, will be in need of recapitalising as they go to the next stage of development. The danger is that we leave it for three or four years and then find that when we most need it it is too late.

  Mr Clark: Chairman, I think that relates partly to your question concerning amount and size and how big, in that the social investment bank would be looking at a different set of objectives in that sense, and the bank that we are managing, Charity Bank, is a deposit taker as well and there are other charitable missions with that. So it would not be moving into the same market space. What we would see is us working with a separate investment bank to create the sort of package that Malcolm is talking about.

  Chairman: Can I thank you for your written submission and your evidence to us this morning; it has been very helpful to us.

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