Third Sector Strategy for Communities and Local Government

Third Sector Strategy for Communities and Local Government

Department for Communities  and Local Government

June 2007

4 – 4: Sustainable investment

A priority for Communities and Local Government is to support the voluntary and community sector to become more sustainable and enterprising.

Following the wind-down of Single Regeneration Budget funding, the Local Community Sector Taskforce highlighted the need for asset development and enterprise support for those organisations which have the capacity to take on those roles. It argued that if community enterprises are going to make a transformational change from short-term, grant funded “projects” to sustainable regeneration keystones, they need to build up a basket of stable and secure independent income streams to resource their development and growth. A critical element will be the nurturing of an income generating asset base. Firm Foundations, the Government’s approach to community capacity building, recognises the need for sustainable investment.

The third sector review consultation highlighted the importance of developing community assets to enable community organisations to generate their own wealth, deliver services and strengthen community engagement. The value of local community-based third sector delivery in creating a local multiplier effect, locking in, circulating and re-distributing investment within disadvantaged communities in particular is well attested. As well as providing a way to encourage sustainable growth of community enterprise in areas of geographical disadvantage, there are also benefits to be accrued from the promotion of sustainable asset development for community enterprises that serve communities of interest, including equality groups that may be at risk of social and economic exclusion, as a way not only of building bonding social capital, but also bridging social capital.

In September 2006, Communities Secretary Ruth Kelly commissioned Barry Quirk, the Chief Executive of Lewisham Council, to review the barriers and incentives affecting the transfer of public assets to community management and ownership. The Quirk review was launched on 15 May and proposed action in five key areas.10 These included encouragement and support for a more corporate and strategic approach to asset management by local authorities and their statutory partners, developed in partnership with the local third sector, with asset transfer to communities as a serious option; and the smarter investment of public funds designated for community-led asset-based developments.

Working with the Office of the Third Sector, we are exploring the increasing potential of approaches involving “community anchor” organisations in achieving this priority. These are independent community led organizations with multi-purpose functions, which provide a focal point for local communities and community organisations, and for community services. They often own and manage community assets, and support small community organisations to reach out across the community. They have the potential to promote and support the objectives of Communities and Local Government, including in building prosperous and cohesive communities.

The Government has already announced a Community Asset Transfer Fund of £30m which will be administered by the BIG lottery fund. This Fund will be used to reburbish local authority buildings so that they can be transferred to commmunity-led third sector organisations. The Budget also announced new funding for small community groups, and we are working with the Office of the Third Sector on how this resource is delivered.

Our proposals

As part of the Government’s plans to implement the Quirk review’s proposals, we are considering how supporting and developing community anchors can help build greater enterprise and sustainability across the sector. In particular, we are examining the feasibility of supporting “community anchors” to stimulate and develop enterprise and self-sufficiency through transfer of assets to community ownership and management, and through the expansion of earned revenue.

Subject to CSR07, we are considering approaches that:

● focus on third sector organisations of sufficient scale and capability to develop and deliver our objectives across the country;

● facilitate and incentivise partnership with local authorities and LSPs, and, as far as possible, makes use of existing infrastructure;.

● expects the anchor organisations to support small community groups in that neighbourhood, particularly those groups who are too small to own assets themselves but often need space and support to operate; and

● involve specialist financial intermediaries with expertise in the field and the ability to achieve high leverage ratios. We would expect these organisations to work with potential recipients to develop sound proposals and mitigate risks.

Case study 6

Bradford – Action for Business Ltd is a community development trust based in the heart of Manningham, focus of the inner city riots (the centre was the one public building left undamaged, because people valued it). Since 1996, ABL has been running the purpose built Carlisle Business Centre (CBC) – a managed workspace with a total of nearly 100 offices, workshops, stores, crafts units, and conferencing and training facilities for rent and hire by small private businesses and community and voluntary organizations.

In 2003, with finance from the Adventure Capital Fund, it purchased the freehold from the City Council: an asset transfer at less than market value, reflecting the added community benefit.