Liz McManus (Wicklow, Labour)
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Question 60: To ask the Minister for Finance the progress made to date with regard to the plan announced in budget 2006 for the establishment of a fund for social finance; if the amount of the fund has been agreed; when the fund will be established; the amount which will be contributed by financial institutions; the way in which the money will be drawn down; and if he will make a statement on the matter. [12382/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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As I set out in my reply to Question No. 53 on 28 February 2006, the aim of the Government's initiative that I announced in my budget speech is to give an impetus to the development of social finance in Ireland. This initiative can make a real contribution towards expanding social finance provision in Ireland, thereby complementing the wide range of measures that are currently in place to promote and assist community infrastructure and local development, including the development of micro-enterprises.

A practical model for social finance funding is currently being developed. The intention is to keep the administrative structures as light as possible, consistent with meeting the objectives of the initiative, and ensuring that the funds are used effectively on a value for money basis. With a view to developing an effective model, my Department has, to date, consulted with a number of public, private and voluntary bodies currently involved or with interests in this area, in addition to its discussions with the banking community.

A key priority is early implementation of the initiative. This will provide the opportunity to market test particular options, which can in turn inform the further development of the social finance initiative. As far as the potential sources of funding for social finance provision are concerned, there has been a positive reaction from the banking community to my invitation to support the initiative. The banks expressed at budget time a willingness to contribute seed capital funding of €25 million to the initiative.

I do not at this stage have a view on the eventual scale of funding that may be warranted. It is not clear at this early stage what the level of demand may be. Experience in the UK and Northern Ireland would, however, suggest that some caution is warranted to ensure that the funds available are applied effectively and yield value for money investments. I am satisfied, therefore, that the seed capital from the banks is sufficient to meet initial requirements for the initiative in light of the available capacity and capabilities to develop suitable social finance projects and manage social finance lending. In my budget speech, I indicated that I was keeping the door open to other contributors.

Finally, advice has been sought by my Department from the Office of the Attorney General on the appropriate legal framework which would clarify the objectives, roles and functions of the investment vehicle, establish the type of delivery structure judged most suitable to the long-term requirements of social finance and also deal with such matters as governance and accountability arrangements.