Over the last ten years the story of community business in my part of the world, the Liverpool City Region (LCR), has shifted from a handful of isolated initiatives towards a more visible, dynamic and ambitious ecosystem. When one looks back over that decade, the pattern is clear and promising. We’ve seen community business models that combine real trading with rooted social purpose grow in both number and sophistication, while institutional support from regional and local government, investors and anchor organisations has started to catch up.
The experience of the LCR offers a compelling illustration of how community business can deliver at scale and what is possible with a regional government committed to growing the sector even further. Now with its ambitious commitment to double the size of the co-operative and mutual sector, the moment is ripe for our national government to help advance the community-led and co-operative economy, so it can continue to transform our society and economy for the better in the decades to come.
From decline to renewal
The economic terrain of the region is important to set out. Covering Liverpool, Sefton, St Helens, Wirral, Halton and Knowsley, we have for years wrestled with the legacy of deindustrialisation, public sector retrenchment and economic fragility.
My own background is instructive here. I grew up in Prescot, a town in Knowsley dominated for decades by the factory site of an industrial cable manufacturer. When the factory shut in the early nineties, taking with it hundreds of local jobs, the site lay unused until a retail park was built there a decade later. The retail park – a big Tesco along with other big box retailers – took footfall away from the high street, which was left stuffed with charity shops and bookmakers. It was a place that had seen better days.
Over the last decade, though, the town centre has transformed. This was kickstarted by the building of a live performance theatre at one end of the high street and further bolstered by the success of a local authority-backed heritage initiative refurbishing shop fronts and other building facades throughout the town. All this has been done in the context of a stagnating national economy and a move towards supporting community businesses at a regional level that had been absent in previous years.
A better form of business
In that context, the emergence of community businesses that are mission-driven, locally rooted and commercially active has a particularly potent resonance. With support from the government’s Pride In Place agenda, they can begin to address the deep-seated and long-term economic stagnation that has afflicted the country since the 2008 global financial crash and most keenly felt in the post-industrial towns furthest from London.
Indeed, research from my region shows that community businesses enjoy stronger survival rates than typical small businesses (83% over five years in one sample versus around 43% for small companies). With that level of comparative success, the community business sector has a strong role to play in bringing prosperity back to those areas that need it most.
Ten years ago, the baseline was modest: a 2019 report from the Heseltine Institute for Public Policy, Practice and Place estimated around 84 community businesses in the region with combined turnover circa £22 million and net assets around £38 million. But that scarcely tells the full story of latent potential, or of the shift that has followed in the years since.
Take, for example, one of the most visible community business projects in the region – Future Yard, in Birkenhead. Set up as a Community Interest Company, it opened a live music venue in 2021 in the centre of the town, with rehearsal studios, a bar, artist development programmes, and a clear social mission. From the outset, the proposition was more than live music: it saw itself as a hub for creative opportunity, training, community engagement, inclusion, and environmental ambition.
Future Yard is emblematic of a particular strand of community business in the region: experience-based trading activity (ticket sales, studio hire, food and drink) with reinvestment of surplus into community benefit (training young people, widening access) and strong commitment to placemaking (Birkenhead, a town with significant regeneration potential). Through such models, the notion of the community business has moved from something niche and place bound to something entrepreneurial and pioneering.
Indeed, Future Yard is increasingly being seen not as an alternative to mainstream business models, but as a signpost to a more modern, next generation version of how business can work. Their National Portfolio Organisation status within Arts Council England is just one example of national recognition, and across the industry, their purpose-driven approach is being replicated more and more.
Equally important is the growth of infrastructure, support and sector development institutions, not just individual enterprises. A pivotal actor in the last few years has been Kindred, a specialist vehicle established by Steve Rotheram, our regional Mayor in 2020, with support from the Combined Authority and Power to Change, to provide interest-free loans and tailored peer to peer support for socially-trading organisations (STOs) across the region.
Another longstanding partner in that evolution has been SAFE Regeneration (commonly known as SAFE). Founded in 2000 as a community arts collective, SAFE’s model has matured into a community business campus. It manages a creative enterprise hub (St Mary’s Complex) and a canal-side community pub (Lock & Quay) and supports dozens of small ventures, artists, social enterprises and creative microbusinesses. SAFE is consistently cited in academic research as an exemplar of asset-based community business: owning or stewarding place, supporting entrepreneurship, leveraging trading income and reinvesting into local empowerment.
The evolution of such ‘anchor’ organisations shows how community business is not only about startups but about stabilising community wealth, reinvesting it locally and generating multidimensional value.
That regionwide activity is also reflected in the wider numbers. The region was designated a ‘Social Enterprise Place’ by Social Enterprise UK in 2023, in recognition of its thriving social economy with £3 billion in income and employing 45,000 people. While the social enterprise movement is broader than community business alone, those figures underscore the economic potential of the ecosystem in which community business models are embedded.
The past decade in the region therefore looks like this in broad strokes: a growing number of community businesses emerging from very modest beginnings; a shift from startups to more sophisticated trading models; institutional and infrastructure support emerging through vehicles like Kindred; recognition of the region’s potential, and an increasing embedding of purpose-driven trading into placemaking, regeneration and local economic strategy.
Of course, none of this has been without difficulty. Research from the Heseltine Institute points to the challenges: funding constraints, austerity pressures, business model fragility, and vulnerability to external shocks such as the pandemic. The sector has had to be resilient, lean and adaptive. And in a region where business density lags national averages, creating growth is never straightforward. Nevertheless, the resilience is notable.
Supporting this potential
Looking ahead, the broader political economic context could offer major opportunities. For example, the government is committed to doubling the size of the co-operative and mutual sector by the end of the Parliament. If community businesses and other models of social business that share in co-operative values and trade to benefit their communities are included within this policy agenda, this could be transformational for several reasons. I’ll concentrate on my own region by way of example.
Firstly, increased recognition and political will would ease access to finance. Community businesses often struggle with the gap between early grant support and commercial scaling. With stronger infrastructure and more (and more varied) funds available, the pipeline could deepen. The existence of Kindred already shows how locally anchored blended finance works; a doubling of mutuals could provide scale, match funding and risk sharing at national level, enabling more of the university of life examples to become replicable and perhaps networked.
Secondly, an explicit policy push would strengthen procurement, commissioning and contracting options. If government were to make contracting requirements for co-operative and community-led businesses, community businesses could win a greater share of local regeneration, culture and service delivery contracts. For example, community hubs could win contracts in employment support, training, neighbourhood services, local food and catering.
Thirdly, asset ownership and place-based strategies would gain a stronger impetus. Organisations like SAFE showing the power of community-owned assets should benefit from a national policy that sees mutuals and community ownership as part of the growth agenda within a national industrial strategy. That means support for asset transfer, community-led housing, land trusts, and more. The new Community Right to Buy could be transformational in this regard, if state agencies at local and regional level are sufficiently resourced to be active and supportive partners.
Fourthly, the labour, skills and employment implications are significant. By embedding community business expansion into local economic strategy, and aligning with devolution and local skills systems, the growth of community business means growth of good jobs, local supply chains, and inclusive recruitment. A doubling of the mutuals sector could mean tens of thousands more local jobs, especially in parts of my region where unemployment remains above national average.
Fifth, the successes of Kindred is a signpost to a potential way forward nationally. The establishment of series of regional endowments (as opposed to a national endowment run from London), perhaps using some of the Pride in Place funding from central government, to support socially-trading organisations would go a long way to bridging the gap between grant and trading income, and would further incentivise the adoption of sustainable business practices by a sector that had previously struggled to make its case in this area.
Finally, culture and identity matter. The wider Liverpool regional economic identity as a purpose-led business hotspot is ripe for expansion. Future Yard shows how culture, creativity and regeneration intertwine. A policy that fosters community trading, mutuals and mission-driven enterprise will accelerate not just economic growth, but civic renewal, social inclusion and local empowerment too. It’s a rare thing in politics to have such an obvious win-win, but this agenda fits the bill.
Achieving the vision
In practical terms, what might that mean for the sector over the next decade? In an ideal world, there could be a number of developments, just a few of which I’ll detail below.
Expansion of the community business support ecosystem. More intermediaries like Kindred, more seed funding programmes, more local revolving funds, more match funded investment and peer networks.
Increased asset transfer and community-led developments. More neighbourhood hubs, community-owned pubs, repurposed buildings for trading community businesses, perhaps linked with housing or energy cooperatives.
More commissioning of community business for local services. For example, employment support, skills for young people, cultural hubs, food production and distribution, and neighbourhood infrastructure.
Stronger collaboration between community business and anchor institutions (local authorities, universities, housing associations) to embed them in local supply chains, procurement and place-based regeneration strategies.
Increased emphasis on measurement, social value and trading sustainability. The models of the past decade have often relied on mixed funding; the next phase will focus on trading viability, asset longevity and impact measurement in an environment where policy support is more predictable.
Of course, growth will need to be intelligently managed. Ensuring that community businesses retain their mission and local rooting as they scale is critical. The risk of ‘mission drift’ or becoming too commercialised is real. A doubling of mutuals must safeguard the values which make community business distinctive.
In the last decade, community business in the Liverpool City Region has moved from promise to implementation. The next chapter of learning and applying that learning nationally could be transformative for people, for economies, for mutual and community ownership, and for democratic enterprise. If the Labour Government (or a future government that inherits its ambition) follows through and doubles the size of the mutuals sector, the country stands to gain in multiple dimensions – economic resilience, social inclusion, regeneration and community agency.
Patrick Hurley is the MP for Southport and Chair of the All Party Parliamentary Group for the Social, Co-operative and Community Economy.
