Northern Rock Foundation and Big Society Capital have announced their intention to create a £11.5m social investment fund for the north east of England to support the development and expansion of voluntary and community organisations and social enterprises. This will be the first regional fund of its kind to be set up with Big Society Capital support.
Big Society Capital has committed,- in principle- , to invest £4.5m initially in the fund and Northern Rock Foundation has committed,- in principle- , to invest £3m, subject to completion of negotiations.A North East Social Investment Company will be set up to champion the development of social investment in the region and to oversee the running of the fund during its life,supported by a further £1.5m contribution from the Foundation.
Alastair Balls, Chairman of Northern Rock Foundation, said “The North East Social Investment Company , and its first social investment fund, are being set up to provide an innovative regional strategic solution to developing the market for social investment in the north east and reducing disadvantage, deprivation and social need in north east communities. This is an opportunity to create a seismic shift in the funding landscape of the voluntary, community and social enterprise sector (VCSE) in the region.”
Nick O’Donohoe, Chief Executive of Big Society Capital, said “We are delighted to be working in partnership with Northern Rock Foundation to set up an independent, sustainable and long lasting social investment facility that will catalyse enterprise, innovation and growth in the voluntary, community and social enterprise sector in the North East.”
The proposal for the Fund has been led by Northern Rock Foundation. It has been developed from analysis of the demand for social investment by PwC and also by regional expert Peter Deans, and with support from the North East Local Enterprise Partnership, Voluntary Organisations’ Network North East and social investors and voluntary organisations working in the region.
Jeremy Middleton, Chair of the investment panel for the North East Local Enterprise Partnership said:
“We were pleased to help fund the initial research for the social investment fund and after lengthy joint work it is rewarding to see it come to fruition.It is also great to secure significant national financial support for a North East fund which, of its kind, leads the UK. It is a great direction for Northern Rock Foundation to take and we applaud its leadership of a scheme which has the strength to have real lasting impact across the North East.”
Tees Valley Local Enterprise Partnership has also welcomed the initiative. Stephen Catchpole, Chief Executive, said “We look forward to seeing the new Fund helping to stimulate social investment here in the Tees Valley”.
Subject to completion of negotiations between Big Society Capital and Northern Rock Foundation, the Company will be set up early in the New Year and the Fund will be open for lending by mid- 2014.
NOTES TO EDITOR
About Northern Rock Foundation:
Northern Rock Foundation is an independent charity and company limited by guarantee, which aims to tackle disadvantage and improve quality of life in the North East and Cumbria. An independent Board of Trustees representing a wide range of interests in the community makes all decisions on governance, finance and policy, supported by a staff of 13.
The Foundation gives grants to organisations which help people who are vulnerable, disadvantaged, homeless, living in poverty or are victims of crime or discrimination. It also supports training, research and demonstration work and gather and share learning from the activities we fund. Where appropriate it seeks to inform and influence wider regional and national policies and practice.
About Big Society Capital:
Big Society Capital isthe world’s first social investment bank. Big Society Capital formally launched in April 2012, with an estimated £600 million of equity to be paid-in over 5 years, of which £400 million will be from unclaimed assets left dormant in bank accounts for over 15 years and £200 million from the UK’s largest high street banks.
Big Society Capital seeks to support the growth of a social investment market in the UK by revolutionising the way in which the social sector is funded. Through supporting the growth of social investment finance providers, Big Society Capital will improve access to innovative forms of financing, and connect the sector to capital markets.