A role for the City in developing funding solutions - by Simi Shah

This blog post originally appeared in Financial World

Creating a Big Society is about creating choices, reducing state intervention and empowering people to lift up their communities. This is not a programme or scheme, it is a mindset. It is a belief that the complex social problems facing England’s communities, families and citizens are not solved by bureaucrats in London but by local people closest to the issues.

Big Society is a flashy new name attached to an old idea – but it has been brought from the margins to the mainstream by the Tory electoral campaign and willingness of the coalition government to fund its creation.

That all sounds quite lovely but it will be no easy task. Shifting the power – which, frankly, means money – to local actors is a serious undertaking. The financing of this work will go to individuals and civil society organisations such as charities, community groups and social enterprises that will be called upon to solve problems locally. However, many of these are small and financially fragile and may struggle as the demands for their vital services increase.

Despite the local mantra, there is a role for the City of London here. Fresh analysis of recurrent problems and entrepreneurial thinking are needed. Additionally, the current capital market for civil society organisations is still immature and relies heavily on grant funding and government funds. The need for input and investment into initiatives to create formal financial mechanisms such as the Social Stock Exchange, the Big Society Bank and Social Impact Bonds represents an opportunity for professionals from the City to get involved.

Big Society is a big job and the best financial minds are needed to develop solutions for the effective deployment of capital that will fuel what is arguably one of the country’s greatest tasks.