Can our main political parties get behind community businesses?

To reconnect citizens to economic growth not just in our cities but in all parts of the country, we need a new model of neighbourhood-based economic growth

Vidhya Alakeson

CEO, Power to Change

Less than six months before Britain is set to leave the EU, politicians are still searching for ways to respond to the underlying issues exposed by Brexit. Despite consistent good news about employment, the economic reality for many remains stark. According to the Institute for Fiscal Studies, the average wage in 2008 at the time of the financial crisis was £24,100; in 2017 it was only £23,300.

 

Against this backdrop, it was welcome that the conversations we convened at both Labour and Conservative Party conferences, with IPPR North and Onward respectively, settled on a common theme: that of the future economic development of our towns, particularly our post-industrial towns. Half of the population of the UK live in towns and rural areas rather than in cities but cities absorb a disproportionate share of our political and policy attention. While Britain’s cities are faring well, many of their surrounding towns can hope for little more than an Amazon warehouse on their doorstep offering poorly paid, low quality jobs.

 

 

At Power to Change, we see a real role for community business in rebuilding local economies, from the bottom up. Back on the Map in Sunderland is an powerful example of the scale of what is possible. It owns £4.5 million of land and property assets through which it generates six figure surpluses. As well as improving housing locally, particularly in the private rented sector, it uses its surpluses to provide a range of community services from a library building transferred from the council. It employs local people, supports other local businesses through its supply chain and is committed to the area for the long term. It is not in a community but of that community.

 

While encouraging of community business in principle, both government and opposition struggle with how to support this kind of bottom-up growth that is vital to the future of our country. In the conversations with Labour, there was a clear fault line between giving away more power to local people and drawing more power into the centre, as the party aims to bring more economic activity under the control of national government.

 

In the conversations with the Conservatives, there was real support for local people taking greater control through community business but then a tendency to default to large-scale solutions not neighbourhood-based ones, based on drawing in private, often international, investment. MPs talked about creating Development Corporations in other parts of the UK; we suggested the already successful Development Trust model merited consideration. Creating the next Canary Wharf won’t address the challenges of many of our post-industrial towns.

 

It’s perhaps not surprising that politicians of all colours struggle with how to nurture genuinely local economic activity. For all the talk of devolution, power has not migrated far; some has been pushed down from Whitehall to cities and city regions. Britain is well known to be one of the most highly centralised of the developed countries. Far from a laboratory of local ideas that get adopted into national policy as you might find in the US, our default setting is top-down. As Aditya Chakrabortty discussed last week in the Guardian, this is part of the explanation for why alternative approaches such as community business can to replicate and thrive. Politicians don’t have a framework for how to support these highly localised approaches.

 

To reconnect citizens to economic growth not just in our cities but in all parts of the country, we need a new model of neighbourhood-based economic growth that can complement more traditional growth strategies based on inward investment, large-scale infrastructure and technology development. This model has to start with what is there: the assets of a place, both physical, social and human; its identify and heritage and it has to co-design the economic future with local people. Those of you, like me, who have relished watching the BBC2 documentary, The Mighty Redcar, can attest to the fact that all communities, even those labelled deprived, have talent, assets and a rich heritage on which to build.

 

Open up opportunities to local and community entrepreneurs, give them access to empty shops and other disused spaces and some patient investment, and change will come through the ecosystem they create. We are seeing this in places like Liverpool where established community businesses are inspiring and supporting new ones to start, building momentum behind an alternative economy that reaches parts of the city traditional approaches neglect.

 

But for this model to really succeed, we have to get decision-making power much closer to people. Devolution is far from complete and right now the jury is out as to which of the two main political parties will make the issue its own.

To reconnect citizens to economic growth not just in our cities but in all parts of the country, we need a new model of neighbourhood-based economic growth that can complement more traditional growth strategies based on inward investment, large-scale infrastructure and technology development. This model has to start with what is there: the assets of a place, both physical, social and human; its identify and heritage and it has to co-design the economic future with local people. Those of you, like me, who have relished watching the BBC2 documentary, The Mighty Redcar, can attest to the fact that all communities, even those labelled deprived, have talent, assets and a rich heritage on which to build.

 

Open up opportunities to local and community entrepreneurs, give them access to empty shops and other disused spaces and some patient investment, and change will come through the ecosystem they create. We are seeing this in places like Liverpool where established community businesses are inspiring and supporting new ones to start, building momentum behind an alternative economy that reaches parts of the city traditional approaches neglect.

 

But for this model to really succeed, we have to get decision-making power much closer to people. Devolution is far from complete and right now the jury is out as to which of the two main political parties will make the issue its own.