It is undoubtedly a good idea to take the £400m that has been lying forgotten for 15 years or more in dormant bank accounts and put it to a socially useful purpose. That is what David Cameron will announce today. And the cash is to be half-matched by a £200m donation from the big four high street banks. The resulting Big Society Capital bank, as it will clumsily be known, will then lend the money, via intermediaries, to social enterprises, mutual societies and associations, charities and voluntary groups.
A banker might object that £600m is not very much. The new bank will certainly be a minnow next to leviathans like RBS, Barclays and HSBC, whose balance sheets are bigger than the annual national income. But total social investments in the UK were estimated last year at only £200m. In that context the new bank could make a difference, in putting some flesh on the vague notion that is David Cameron's Big Society – a notion he defined, when he announced it in 2009, as a vision to "take power away from politicians and give it to people".
In one sense there was nothing new in that. Charities, volunteers and community activists already existed as part of what Edmund Burke famously called the "little platoons" which stand between the individual and the state. The question is whether Mr Cameron can meaningfully extend that in new ways. And critics have suggested not. They see the Big Society as waffle, intended to disguise the impact of billions of pounds worth of cuts in public services – a good deal of it from the budgets of publicly supported charities and community groups. Local people taking over the running of their local library, swimming pool, village shop or post office will not fill a gap of that size.
How the Big Society Capital bank works will put Mr Cameron's rhetoric to the test. If it supports enterprises which are a poor replacement for a proper public service, he will stand condemned. The same will be true if it proves just a new system to encourage vulnerable charities to borrow money – or to provide the capital needed by public officials to buy out parts of the health service, social services or schools and transfer the ownership of existing social enterprises from the state to their employees.
For the Big Society to mean something, it must not replace properly funded public services; it must offer something extra. It must pump-prime new activities which empower ordinary people and groups at a more local level. It must be a way of endowing the poor with the capital that laissez-faire capitalism has denied them. It must mean new credit unions, residents' associations and playgroups and the development of new businesses in those acutely deprived areas that have been abandoned by mainstream banks and investors. It must back ventures whose purpose is explicitly social.
At its optimum, the Big Society could have provided the philosophical underpinning for comprehensive reform of the public services. And – despite what many of its detractors say – it could never have been just a veil for cuts because in some areas it would have required more funding, not less. But that opportunity has been missed. The Government's approach has seemed incoherent. For all the rhetoric, there has been no upsurge in charitable giving or volunteering since the Prime Minister launched the initiative three years ago. The recent Budget has made philanthropy harder, not easier.
The Prime Minister's much-vaunted "localism" was supposed to "trust people to take charge of their lives" by pushing power, in Mr Cameron's words, "to the lowest possible level, including individuals, neighbourhoods, professionals and communities as well as local councils and other local institutions". So far, he has not delivered. How the Big Society Capital bank works will be a test of his true intent.