Tax-cut heavy Spring Budget lacks critical investment in communities

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The Chancellor’s budget announced some funding for communities but does not go far enough to support local growth.
6 Mar, 2024

Today’s Spring Budget focused on tax cuts for individuals as a way of getting money into people’s pockets. But with crumbling local services and a need to strengthen local economies, investment is needed in community business to invest in the foundations of growth. This comes after polling for Power to Change shows the public prioritise spending on community and locally-run services over tax cuts for individuals.

Tim Davies-Pugh, Chief Executive of Power to Change said:

Community businesses provide vital services in their local area and help strengthen local economies – these are the foundations of growth. Yet, we’re hearing time and time again from community businesses that are still grappling with the impact of rising costs and demands on their services. Instead of focusing on tax cuts for individuals, Government should invest in community business. The announcements on community-led regeneration and development are positive, but investment should be broader and deeper, involving and backing community business. The public supports this idea, with 46% of a representative sample recently polled prioritising increased spending on services and facilities run by the local community or local authority, over tax cuts for individuals.

Already community businesses are providing important local services in their local area. Our own Community Business Market Survey finds that around a third of community businesses primarily provide public-facing support services, such as health and social care services or employability support, while 56% of community businesses own or manage at least one asset in their local area that provides an accessible facility from which to deliver vital services. While the public would prefer spending to be focused on local authority run services, they clearly see a role for community-run services in that mix – Government needs to find ways to support both.

As trading organisations, community businesses aren’t reliant on Government, but Government does have a role to play in making sure they can access the investment they need. It is positive to see 20 more towns receiving investment as part of the Long-Term Plan for Towns as well as £20m of funding made available for community-led housing. At the same time, community businesses tell us that they are still struggling with the impact of inflation on their bills and the cost of delivering their services, while demand for support is only increasing. This means that where community businesses can access financial support, it’s no longer going the distance.

Take the example of Upper Calder Valley Renaissance, a community-focused enterprise leading local regeneration efforts as well as providing communal space and well-being support for the local community. In speaking with us about the challenges facing their community business, they said:

Rising cost[s] due to inflation means funding is not enough by the time it arrives and there is a need to reduce scope to compensate, which in turn reduces outcomes.

Access to finance is the top support requirement community businesses identify and Government’s support can have a significant catalysing effect for community businesses looking to sustain and grow their businesses. Long-term investment and Government support will ensure community businesses can continue to serve and support their local communities.

The government rightly wants to grow the economy, as does the opposition. But the foundation of national growth is a strong social fabric alongside strong local economies, in all parts of the country. Community business deliver services and create opportunities that meet local need and help to strengthen local economies in places that are too often forgotten about.

Our non-profit recruitment agency pays for low skilled workers to get the right qualifications to make them employer ready

Centre4 community hub, Grimsby

But they can only do this if they have the resources to do so. Government needs to invest in community businesses and play its role in making sure they can access the investment they need to thrive – investing in community business is investing in the foundations of growth.