Power to Change has spent a decade backing community business, understanding and evidencing how they help to create thriving local places. We wouldn’t have been able to do this unless we spoke directly with community businesses from up and down the country — from Three Seas in Cornwall to Victoria Hall in Settle.
As we plan our future, we can’t continue to advocate for community business without keeping our finger on the pulse. We need to know about the sector’s mood, their daily challenges, and what they need from local and national government.
That’s why in April we launched our Pulse Survey. Each quarter, we’re inviting community businesses across the country to tell us how their business is doing, what their local area is like, and how they perceive their working relationships with political institutions. We’ll be using the responses to shape our work and ensure we remain grounded in community business.
Our first survey captures a clear snapshot of the sector from spring to summer in 2025.
Community business confidence stands strong, even when other small businesses are struggling
We’ve seen the resilience of community business that was first recorded in 2022 post-pandemic persist through the years. Our 2024 Community Business Market (CBM) survey depicted a stable and confident community business sector. This year is no different, even amid record numbers of businesses in distress.
Just over half (51%) of community businesses think their business prospects will improve over the next three months. Although a fifth (20%) think their prospects will worsen, this is lower than that recorded in 2024’s CBM survey (29%), and much lower than that of small businesses recorded by the FSB’s ‘Small Business Index’ back in March (47%).
This optimism is despite what community businesses tell us are their current challenges: the continued cost-of-living crisis, National Insurance rises, increased running costs and reduced capacity: ‘There are more people wanting more, for us to deliver with less money’.
While the external situation hasn’t changed significantly, community business is providing proof of its resilience.
Community businesses are working in local areas that aren’t thriving
This confidence is also against a backdrop of struggling local areas. A third (35%) of community businesses feel like their local area has got worse in the past three months, slightly higher than reported by the public in the Department of Culture, Media, and Sport (DCMS)’s 2023/24 Community Life Survey (29%). This isn’t surprising, as almost half (48%) of respondents are operating in the most deprived areas of England (IMD 1-3), where shuttered high streets are a frequent sight.
But community businesses are still optimistic about the impact they make on their community. A majority (77%) think their social impact on their local area will grow in the next three months.
This is not just a lofty perception – it’s borne in the data. Community businesses make a huge impact on community cohesion, health, and wellbeing. They generate £1.7 million in social value for every 100 people experiencing an improvement in their health, freeing up the equivalent of over 30,300 GP consultations.
Community businesses have good working relationships with local government
Trust in the national government is at an all-time low, and this isn’t any different among community businesses. Only 15% felt they could trust the government.
Our recent ‘Closing the void’ research demonstrates that citizens’ involvement in associational life, like community businesses or social clubs, can lead to higher levels of political trust, engagement with politics, and sense of agency in influencing decisions around their local area. We also know closing the gap between politics, state and society will take a long time and needs the backing of government and associational organisations alike.
Community businesses want to take on this role. When asked in our Pulse Survey what the government can do to restore trust in politics, several made the case for working with communities, as they are best positioned to deliver local change:
‘I do trust the government, I just don’t think they are well placed to direct the sort of change that is required at a community level. The multifaceted nature of problems, the intergenerational discontent and the cultural ambivalence to anything imposed by others alongside a lack of capital to self-deliver means things won’t improve soon.’
We know that community power can be increased if there is stronger collaboration between communities and local authorities. Positively, 64% of community businesses think they have a good working partnership with local government, with local councillors perceived as most likely to listen to community businesses compared to local MPs or the national government.
How do we best support community business?
These findings paint a picture of a stable and resilient sector who are willing to work with local government and are making economic and social impact in local areas, in communities that are struggling. Community businesses are chomping at the bit to have a seat at the table, so that they can better realise the ambitions of their local areas.
We’ve long argued for greater investment in community power and community rights, to enable communities to drive the change they need locally. Our current ‘test and learn’ partnerships are exploring this in more depth.
We’re testing the benefits of community covenants, where community businesses work with local authorities and other public bodies to improve their place. One of our partners, Fordhall Community Land Initiative, is facilitating a pilot covenant with Shropshire County Council and parish council representatives to develop a Community and Family Hub in Market Drayton. Family hubs are being embraced by the government and rolled out across every local authority, and we’re learning how covenants can be a useful tool for shaping community services like these, devolving power to those rooted in the community and ensuring facilities fit local needs.
We’re also testing community-led high-street renewal in five places across England where community businesses are taking action to transform their high street or town centre. Our learning visit to Make CIC in Birkenhead, one of our high street innovators, made clear that this can’t be done without developing sustainable working relationships with local authorities.
As we’ve argued in our work advocating for a communities strategy, with the right conditions, communities can be empowered, drive growth that everyone can see and feel, and be resilient to challenges and shock. They just need to be supported to get on with it. As one community business leader responding to our Pulse Survey put it, ‘we are willing and able to make positive changes for our community – if given the chance’.
Our first survey was carried out between 24 April – 30 May and had 43 respondents. The online survey was sent to our mailing list of community businesses who had either applied for our grants or previously worked with us. The results of this survey are not representative of the views of the entire community business sector.
