PM's Big Society bank a reality
David Cameron's vision for a Big Society bank has become a reality, with the first investment set to help disadvantaged young people into work or education.
The bank, now relaunched as Big Society Capital, is set to receive £600 million in equity capital in the coming months - £400 million from dormant bank accounts and £200 million from the big four UK high street banks.
It is aimed at giving socially orientated financial organisations greater access to affordable capital so they can in turn help charities, social enterprises and voluntary groups.
The Big Lottery Fund is to make the first investment, worth £1 million in principle, to the Private Equity Foundation, which provides children and young people with basic skills, emotional support and help to gain employment.
The four banks - HSBC, Royal Bank of Scotland, Lloyds and Barclays - have now formally committed to invest £200 million in Big Society Capital as part of the Project Merlin agreement.
The rest will be funded from unclaimed assets left dormant in bank and building society accounts for more than 15 years.
But the Government first needs the European Union to approve plans to allow the new body to use the dormant accounts under state aid rules.
Cabinet Office Minister Francis Maude said it is a "grindingly slow, tiresome process" but he believes there will be "no show-stopper problems".
He added: "In the unlikely event that they said no, we would need to look again at how we get the dormant bank account money, the unpaid assets - around £400 million in total - how we continue to get it into the social investment market."
Sir Ronald Cohen, non-executive chairman of Big Society Capital, said he is "convinced" he will get the go-ahead from the EU.