Newspaper article The Evening Standard (London, England)

Robbing the Poor to Pay for Games; CITY COMMENT

Newspaper article The Evening Standard (London, England)

Robbing the Poor to Pay for Games; CITY COMMENT

Article excerpt


THE Social Investment Bank could have been Gordon Brown's most worthwhile legacy from his time as Chancellor. The blueprint, strongly influenced by Apax founder Sir Ronald Cohen, was published last year and laid out a plan for a properly capitalised, highly professional institution that could provide everything from support to more sophisticated forms of finance for the thousands of community organisations.

With the knowledge and financial muscle of the bank providing backup, the effectiveness of such organisations would be massively enhanced. There could be a step change in the quality and range of help that could be given to young people in deprived areas to get themselves started in business and on community projects. Without getting carried away, it was possible to see the Social Investment Bank becoming a major agent in the fight against poverty, urban deprivation and financial exclusion - all those things the Chancellor has pledged himself to fight.

The Social Investment Bank would cost money, but that had been cracked too.

For years, the banks had been under pressure to turn over their orphan assets - those accounts which they all have and which have lain dormant and untouched for 15 years or more - for a socially beneficial use.

They had finally agreed to do so, and in the past months have produced estimates of how much there is - about [pounds sterling]400 million was widely predicted.

Meanwhile, the Commission on Unclaimed Assets worked up proposals for the Social Investment Bank to show how the money could best be put to good use.

The Budget was earmarked as the time for it all to come together. It all seemed to be going so well.

But not any more because it looks increasingly as if the Treasury plans to filch the money. Brown certainly has form in this area - remember how the [pounds sterling]20 billion windfall from the telecom licences went into his pot and was spent with nothing lasting to show for it. Now, if a cascade of leaks in the past few days is to be believed, he would rather divert the bank's orphan assets to the Big Lottery Fund where they can be used to help finance the Olympics.

The fig-leaf argument to support this would be that the Olympics are also about supporting youth, just as the Social Investment Bank is.

It would be too sensitive - even for the Treasury - to be seen to cut the Social Investment Bank off without a penny, so the even-more cynical aspect of the coming paper will be to allocate it some [pounds sterling]150 million - in the full knowledge that, while this sounds a lot and will be difficult to lobby against, it will be less than half what the Bank needs to do the job properly.

Any City banker would tell you that at this low level it will be so undercapitalised it would not rate as a serious player, and would not be able to apply any of the skills and techniques that could so raise the local game. …

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