3 ways to kick-start local economies after the crisis

The covid-19 crisis has exposed many flaws in the UK’s political and economic organisation. Under-funded public services, a depleted welfare state, entrenched inequality and precarious work to name a few. But as our Head of Impact Evaluation Stephen Miller explores, it has also renewed a sense of community and co-operation across the country and brought home the importance of place.

Place has always been important. Our immediate environment shapes our identity and our relationships with others. It affects who we see each day, the jobs we have access to, and the shops, goods and services we use. As the crisis has also highlighted, where we live affects our health and wellbeing too.

This is one reason Power to Change exists. To create better places through community business. No one understands a community better than the people who live there. That’s why we work with community businesses to revive local assets, protect the services people rely on, and address local needs. Over the past 5 years, we have supported over 1,000 community businesses with over £64m of funding. Two-thirds of this has gone into the 30% most deprived areas.

Community businesses often pop-up in areas experiencing social and economic issues, or market failures. We’re seeing both the benefits and impact of this during the covid-19 crisis. As trading organisations, many community businesses have found normal business disrupted. Many will lose money, whether they are a community-owned pub or a community centre renting out office space and meeting rooms.

Yet they are still doing remarkable things. Centre4, a community hub in Grimsby, is delivering food and prescriptions to isolated vulnerable people. They are providing social care services too, as well as providing many online resources for different groups. Others like The Anglers Rest, a community-owned pub in Bamford, are running the local Post Office. Enabling people to collect their pensions, pay bills, withdraw cash and pay their gas or electric.

Based on what we’re seeing now, and what we’ve been observing over the past 5 years, I think there are three things we – that’s us as individual consumers, communities, businesses and government – can do to help kickstart local communities once the lockdown is loosened.

Spend local and buy social

Where you spend your money matters. For every £1 spent with SMEs, 63p stays in the local economy, as they are more likely to trade with other local suppliers and trades people. Conversely, only 40p in every £1 stays local when you spend with larger businesses. Some places were exploiting this advantage before the crisis. For example, a handful from Bristol to Brixton have been running local currencies for several years now. Several local authorities and public services are also buying services and goods locally too. Preston has been leading the way on the latter. Since 2013, they have redirected over £70 million back into the Preston economy, and £200 million into the Lancashire economy.

It’s not always possible to get what you want from a local supplier, though this may change after the crisis. But it is worth remembering how some household names have behaved during the crisis. Furloughing their staff while still paying out huge dividends, transferring wealth out of local economies in the process. Others not offering to pay their staff at all (or at least until pressured). Meanwhile, some large businesses have gone out of their way to support their staff and the communities in which they are based. For example the Coop is taking on 5,000 extra store workers to cope with increased demand and offering temporary employment to hospitality workers who have lost their jobs. They are also aiming to raise £30m from their members in donations for charitable causes.

That’s why it’s important to shop local and ethical. Buy from community businesses and social enterprises in particular. If you are looking for where to start and how to access their services online whilst in lockdown, I’d suggest the Buy Social directory run by Social Enterprise UK.

Support employability

Amongst organisations like community businesses, there’s a strong emphasis on providing good work and good wages. When they create jobs, they aim to create good jobs – not precarious work with low pay. But we also need to focus on skills, as well as job creation. This crisis has highlighted that there is a depth of knowledge and skills within sectors such as retail, food and hospitality. These were previously considered to be low value parts of the economy, now considered key. Likewise the crisis has mobilised a large army of volunteers, each bringing different skills and resources to support their local communities. Community businesses have always been good at this, including drawing on and developing the skills of those who may not otherwise get the opportunities to use them. For local economies to recover after this crisis, we’ll need to do more to mobilise and develop the talent that already exists within our communities.

Invest in communities

Before this crisis, announcements about public investment centred on infrastructure. Building new roads and high-speed railway lines. This will be an important part of the recovery process, but we also need to invest in communities. Otherwise, we risk deepening the problems which existed before this crisis, such as inequality. There is a wealth of evidence from previous and current initiatives – such as the New Deal for Communities in the 2000’s, or our current Empowering Places initiative, that investment in communities has a greater impact in areas that have strong community bonds, high levels of trust and collaborative relationships between groups and individuals.

We create these bonds and trust when communities have spaces to meet, engage and mobilise. These spaces are the social infrastructure of our communities – the community centre, the pub, the post office, the library. Yet before this crisis, many of these spaces were in decline. For example, in the past 10 years, a fifth of all pubs in the UK have closed. And immediately before the crisis, over one in ten shops were already vacant. This is very likely to get worse.

That is why it’s important we don’t lose sight of what holds our communities together. We must invest in and support social infrastructure, develop skills and create jobs. Shop local and shop ethically. But we must also create ways for people to exercise control over their own lives. More democratic models such as community businesses are one way to do this. For local economies to recover, we must move from doing stuff for ourselves, to doing stuff for each other.


Article adapted from a webinar organised by Aging 2.0: https://www.aging2.com/events/details/aging-20-london-presents-kick-starting-local-economies-post-covid-19/


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