Sir Ronald Cohen’s uphill struggle with the MPs

Last week, Sir Ronald Cohen, the creator of the Big Society
Bank and one of this country’s richest men, spent an hour and a half explaining
to a committee of Parliamentarians all the ramifications of the bank and of
social impact bonds (which he also had a hand in – his consultancy, Social
Finance
dreamt them up).

I wouldn’t blame him at all if he’d decided not to turn up.
Appearing before a Parliamentary committee hearings tend to fall into two main
categories, neither of them pleasant for those being heard.

The first is when MPs understand the subject and want to
tell the great and the good that they’ve done something very wrong.*

The second type, which Cohen faced, is potentially even
worse. It’s where the MPs involved don’t understand the subject at all (the Big
Society Bank, in this case) and fire irritated questions at their witnesses as if they were directly to blame.

Cohen found it an uphill struggle, to say the least.

Was social finance all about social impact bonds, the
committee asked. No, they weren’t, Sir Ronald explained patiently. Social
impact bonds were an important part of it, but only one element.

Wasn’t all of this just about payment by results, the
committee asked. Hadn’t the Work Programme reforms meant social impact bonds
were unnecessary?

Hardly, said Sir Ronald. Social impact bonds allowed small
charities with effective interventions to get into the game. Payment by results
left you with only a handful of big companies who could compete.

And so it went on, as Cohen and his associates patiently
laid out the principles of social enterprise, social finance, and the need for
a market to connect the two, and understanding gradually dawned among the
elected members.

Part way through, Bernard Jenkin, chair of the above
committee, achieved an apotheosis.

“The Big Society Bank has the reputation of being a bit of a
political gimmick,” he said. “But you’re explaining to us that it is the
conclusion of years of thinking about how to fund the social enterprise and
charitable sector. That’s incredibly important.”

It was, really, but it was evidently the point at which Sir
Ronald and co had expected to start the discussion, rather than the point it
reached after an hour.

It’s maybe unreasonable to expect MPs, with all the
innumerable demands on their time, to understand properly what’s quite an
esoteric subject. After all, there are certainly plenty of people within the
sector who haven’t really got their heads around social finance models.

But rather worryingly, these are the people who will shortly
write a report on the big society, including its finances, and it was concerning to see that they really don’t understand its technicalities very well.

One positive, however, is that at least the MPs on the
committee seemed to like what they heard. It was clear, when leaving the room,
that there was significantly more support for social finance than there had been entering
it. However it looks like there is still a way to go to really spread the good
word throughout the whole of the Palace of Westminster.

* Also last week, I watched Richard North, chair of the
Payments Council, face a Treasury committee with its dander ruffled over the
question of cheques. The MP chairing the committee sat down, smiled kindly at
North, and then tore into him like a starving leopard faced with a baby goat.

“Did you commit a colossal error of judgement?” was his
opening question. He then continued to ask the same question again and again
for about a quarter of an hour, despite the fact it was quite impossible to
answer either yes or no, until North plainly wanted to hide under the desk.