David Cameron launches Big Society scheme
Updated on 19 July 2010
David Cameron has kick-started the government's Big Society project, funded by cash languishing in dormant bank accounts. John Bird, who is founder of The Big Issue and advising the government, tells Channel 4 News cutting out waste is key.
Billed as "the biggest, most dramatic redistribution of power", Mr Cameron launched the Big Society project in Liverpool this morning – an area set to benefit most from the scheme, alongside the other three chosen communities of Eden Valley, Cumbria, Windsor and Maidenhead, and Sutton in London.
John Bird, founder of The Big Issue, met the prime minister last week and is consulting the government on the scheme. "The jury is out until we see some meat on the bones but the initial signs are encouraging," he told Channel 4 News.
"At the moment we have the voluntary sector, the national government and social businesses – and never the twain shall meet," he said.
"There is so much duplication, waste and holes to fill. The Big Society is about converging energies and recognising that a lot of common functions are duplicated."
The prime minister said he will appoint teams of civil servants led by expert organisers who will oversee the launch of a string of "people power" initiatives - that were key to the Conservative's general election campaign.
He unveiled community based initiatives including a local buy-out of a rural pub, efforts to lure volunteer workers to run museums and moves to give residents power over council spending.
Mr Cameron championed "communities with oomph". "We have to turn government completely on its head," he said. There are three steps to galvanising a Big Society, Mr Cameron said, decentralisation, transparentcy and providing finance.
Years of government control has morphed people into "passive recipients of state help", he said, spawning communities that are now "dull soulless clones" and public sector workers that are "disillusioned weary puppets of government targets".
Unlocking community power
The four flagship communities of the Big Society will be training grounds for sweeping change, "the first territory on which real and ultra local power is a reality", Mr Cameron said.
"They are all from very different places: rural, suburban, urban. They're led by different sorts of people: local MPs, councillors, big local leaders outside of politics like Phil Redmond.
"And they've got different ideas, from devolving budgets to street-level, to developing local transport services, taking over local assets such as a pub, piloting open-source planning, delivering broadband to local communities, generating their own energy and here, in Liverpool, building a volunteer programme so they can keep local museums open for longer.
"But they've all got one thing in common: a firm commitment from this government to help them realise their dreams," he said.
Mr Bird said that engaging the disenfranchised with mainstream society in a meaningful way should have been the priority of many governments before now. Unlocking money from disused bank accounts will empower local communities, he added.
"There's an enormous number of volunteers - there's genius at a local level that is not being tapped into," Mr Bird told Channel 4 News.
Emma Harrison, chairman of A4e - the main contractor for the government service Education for Offenders, said: "Let us all accept that people have been helping people forever - and that it gives us all a wonderful sense of purpose and is a thing that we can all do. It would build communities, friendships, self esteem, confidence and help people get back to work."
Mr Cameron appealled to local social groups to come forward with ideas. "If you've got an idea to make life better, if you want to improve your local area, don’t just think about it – tell us what you want to do and we will try and give you the tools to make this happen," Mr Cameron said.
"I passionately believe we have begun here will spread right across our country – covering it in innovation, local inspiration and civic action."
Big Society Bank
The government plans to establish an independent wholesale bank - the Big Society Bank - that will be funded by money lying in dormant bank accounts to establish charities, voluntary groups and social enterprises.
Hundreds of millions of pounds will be made available to communities in order to kick off the projects.
The Big Society Bank is based on legislation passed by the former Labour government to scoop up money from bank accounts that have not been touched for 15 years and whose account holders cannot be traced.
Unclaimed bank accounts
Dormant bank accounts containing more than £400m have been sitting in UK banks waiting to be handed over to the government for community projects since the Dormant Bank and Building Society Accounts Bill became law at the end of 2007, according to the British Bankers' Association (BBA). Not a penny has been collected yet. "The problem is the government has not found a way of distributing it yet - there's no where to put it," a spokesman for the BBA told Channel 4 News.
Banks vary in their definition of 'dormant', but generally speaking an account that has not been touched by the account holder for more than two years is considered unclaimed. In 2007, the Treasury made an agreement with the UK banking sector that any accounts that had been dormant for more than 15 years would be emptied and paid out to the government.
However, the banks insisted that customers could reclaim their money at any point - before or after the funds had been seized. Since then more than 350,000 people have applied to the BBA's site mylostaccount.org.uk to track down either their own accounts, or their relatives' dormant accounts - heirs can reclaim money.
Last month alone a total of 3,811 people processed applications searching for old bank accounts, building society and National Savings accounts, the BBA said. Bearing this in mind, the BBA spokesman said: "It is paramount that the government's Big Society Bank keeps some money back, as people have the unalienable right to claim at any time".
Mr Bird met with the prime minister at Number 10 Downing Street last week to discuss funding the Big Society. The Big Issue, whose Big Issue Invest charity has reinvested £3-4m in local community projects, is now consulting the government on how to finance the project.
"We are advocating freeing up the credit union system – calling for a national, commercial bank," Mr Bird told Channel 4 News.
The Big Issue, which was set up 19 years ago and recently launched in Korea and Japan, focuses on helping people stand on their own two feet through self-help rather than hand outs, he said.
"I’m very excited about the idea that we can influence the government and local democracy – we must have got something right," he added.
Nick Hurd MP, minister for civil society, said last month that bank would be as "independent and unbureaucratic as possible". It will be a wholesaler, not a retailer, so it will support intermediaries that are growing the market for social investment.
"If it invests in social enterprises in Salisbury (for example)," he said, "it will do so through intermediaries that have structured financial products, such as social impact or community bonds that connect private capital with the opportunity for good, and for social impact". The first funds are expected to total between £60m-£100m and will be distributed to community groups by April 2011.
"We believe in paying public service providers by results. It encourages value for money and innovation at the same time," Mr Cameron said.
"But the potential problem is that you can lock smaller organisations out, because they don't have access to start-up capital. So government has a crucial role to play in bridging the gap - and indeed, more widely, in connecting private capital to investment in social projects.
"We have already said we will create a Big Society Bank to help finance social enterprises, charities and voluntary groups through intermediaries.
"And I can announce today that it will be established using every penny of dormant bank and building society account money allocated to England.
"These unclaimed assets, alongside the private sector investment that we will leverage, will mean that the Big Society Bank will - over time - make available hundreds of millions of pounds of new finance to some of our most dynamic social organisations."
What does the Big Society mean to you? @channel4news Twitter followers have their say:
joshuwahwah:@channel4news less money, less accountability and more onus on charity.
mikejulietbravo: BigSociety = more self reliance, less government mandate. More good sense, less bad bureaucrats. @channel4news
CouncillorTudor: This #bigsociety is so unpopular its a wonder that Cameron hasn’t got a #libdem to announce it.
SoooooZee: @channel4news Big Society = more burden upon charities and less on public funds; responsibility-shifting; blame the public not politicians.
seanics: @C4politics Big Society=DIY Society. We work harder for less. Govt provides less for more. Cuts under the guise of promoting volunteerism.
SAFCBOB: @C4politics Promotion of, and support for, social capital at a very local level. But this won’t be easy and it won’t be cheap.
SineadwithaFada: RT @CulturalSnow: RT @ianZeds: Upper middle class with too much time on your hands? Then you can decide how money is spent in your community #bigsociety
Read more readers' thoughts from our live blog here.