The North East of England has a common history linked to its industrial and mining heritage. There are many significant growth sectors, including automotive and advanced manufacturing, offshore and renewable energy, and life sciences, with four outstanding universities based in the region. However, industrial decline over several decades has contributed to many key challenges, including a high unemployment and economic inactivity rate, low pay, high levels of child poverty, and health inequalities.
Established in May 2024, the North East Combined Authority (NECA) covers seven local authority areas: Newcastle, North Tyneside, and Northumberland (which previously formed the North of Tyne Combined Authority (NTCA)), along with County Durham, Gateshead, South Tyneside, and Sunderland.
NECA aims to drive economic growth that delivers for everyone in the region. The Mayor’s vision is for the North East to be “known as the home of real opportunity, a place where everyone thrives”.
Working towards a shared vision
In 2022, there were 5,400 social economy organisations in the region with an average turnover of £222,000 and an estimated £551 million contributed in Gross Value Added (GVA).
At this time, there were an estimated 29,000 employees in these organisations – this amounts to 3.1% of local employment, providing proportionally more employment than the local agriculture, energy and water industries.
The Voluntary, Community and Social Enterprise (VCSE) sector has been clearly recognised by the combined authority in their Interim North East Local Growth Plan, as a vital part of the foundational economy, creating long-term growth that is sustainable and fair for all. This strategic recognition is shown through VCSE representation within NECA’s Cabinet – the main decision-making body of the combined authority.
NECA – and previously NTCA – has been working in partnership with Power to Change to support the growth, impact and resilience of the region’s VCSE sector and wider social economy.
Together we’ve worked to build a better understanding of the landscape of the social economy in the region, including through findings from a joint call for evidence in 2022.
Crucially, we’ve made sure that social economy organisations have a stronger voice in shaping and delivering the combined authority’s interventions. We’ve partnered with organisations including Voluntary Organisations’ Network North East (VONNE) and Junction Point CIC to help facilitate this representation. These partners are helping to raise the profile and build a movement of social economy organisations across the region.
We’ve also supported the creation of a new role focused on the social economy, bringing social economy expertise and trusted relationships into the heart of NECA. This reflects a serious and sustained commitment to developing the sector.
Flexible social finance
A shared ambition for the partnership is to improve access to finance for the region’s social economy. NECA is keen to understand their role in driving innovation in finance provision to increase the resilience and impact of the sector.
In September 2024, NECA and Power to Change, alongside our partners at Big Issue Invest, launched the North East Flexible Social Finance offer. The combined authority has committed £4 million to be delivered in phases. It provides access to affordable, flexible, repayable finance for social economy organisations. It is specifically designed to address the challenges faced by social economy organisations who struggle to secure loans from mainstream or social investors. The offer was shaped using input from social economy organisations, gathered through conversations and roundtable discussions.
In its first phase, the investments are between £50,000 to £400,000. The fund is flexible, with the money being repayable over one to five years, and a negotiable interest rate depending on how affordable it is for the social economy organisation.
It is still too early to understand the impact the fund is making, but by delivering it iteratively, the combined authority can test and learn what works to inform future phases of the offer. Going forward, NECA hopes to use the offer to leverage more social investment into the region. This will help secure the fund’s longevity and help more money circulate locally within the growing social economy.
Business support
As well as strengthening the finance landscape, NECA are working to ensure social economy organisations can access appropriate business support. Funding from the UK Shared Prosperity Fund (UKSPF) has helped set up specialised support for social economy organisations, including through the Business with Purpose programme, which supports startups and established purpose-led organisations to increase their trading income and further their impact. A Peer to Peer Socially Trading Support programme for social economy organisations has been commissioned in response to the recognised gap and strong demand for peer mentors. Both programmes are delivered by a consortium of local organisations with social economy expertise.
What’s next?
A key manifesto commitment of the Mayor is to set up a new High Streets Commission to help revitalise town centres across the region. In 2025, the commission is in the process of being established, with devolved funding being awarded to local authorities to establish their local priorities and develop a programme of interventions for high streets.
We know community businesses can play a powerful role in reimagining high streets and town centres, creating vibrant and resilient places that work for local people. We welcome NECA articulating the importance of community-led solutions and purpose-driven businesses in renewing high streets. In the next phase of our partnership, we will focus on ensuring that the community businesses and other social economy organisations can play a leading role in realising the Mayor’s vision for high streets and town centres.
Despite being newly formed, NECA has already shown a bold commitment to growing the region’s social economy, helping more organisations contribute to the kind of local growth that provides opportunity for everyone. We look forward to continuing to work in partnership to help create a strong vision for the region’s sector, building on work to date to shape the conditions for it to thrive.
Read more stories of some of the North East’s community businesses, including Star and Shadow Cinema, Back on the Map, and Northumberland Seafood, set up by Amble Development Trust.
