SOCIAL enterprises and large charities will be the main beneficiaries from the new £600million Big Society funded announced by the Prime Minister yesterday.

That’s the verdict of a charity chief, who warned many smaller charities would not want to borrow money – even from such a specialist fund.

Big Society Capital will use a mix of money from dormant bank accounts and the main High Street lenders to fund investment in charities and social enterprises. The initial capital for the fund will be an estimated £400m in unclaimed cash from bank accounts dormant for more than 15 years and £200m from Barclays, Lloyds, HSBC and RBS.

David Cameron yesterday claimed the money would help “smash away” the “patronizing assumption” that small charities cannot do big things and said it would help resolve the country’s “deepest social problems.”

But Tina Baker, chief executive of the Community Foundation for Bournemouth, Dorset and Poole, which last year distributed £661,000 to 185 local charities and community groups, said: “The real benefits are going to be for social enterprises, it’s good news for them and for charities who are seeking to set up trading activities.

“However many charities will shy away from going into loan financing. The trouble with loans is it could distract charities from delivering their core mission if they are worrying about paying back finance.

And a spokesperson for Bournemouth Churches Housing Association (BCHA) said: “It is good news to finally see some of the promised money from dormant bank accounts being made available to the charity sector.

“However as this is capital investment rather than revenue it will have little benefit for those local charities who do not have a regular income stream and so still need grants to be made available. It will be helpful for social enterprises who are looking to scale up their operations and have developed products or services into particular markets.

“Although it will be interesting to see how much bureaucracy is involved in applications and assessments as well as the financial returns the new Big Society fund expects to receive back.”