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September 15, 2010

We should value local diversity

All too often a successful local project is treated as if it were simply a test bed in the search for grand solutions to society-wide challenges.  An obsession with roll out, mainstreaming good practice and achieving scalability have obscured the real value of localism and encouraging a diversity of local approaches.  But thinking on this is changing with implications for how local finance might be raised

Stian Westlake

It seems that we are finally beginning to grasp the true value of localism: not as an R&D lab for the centre, but as a powerful force in its own right. But this new vision of localism also calls for new types of social finance.

Traditionally, local solutions to social challenges have often focussed on national roll-out. The job of the local was to act as an R&D lab for the national. If we let a thousand flowers bloom, so the theory went, one or two would be especially beautiful, and could be re-planted across the country.

But increasingly, it’s clear that localism is valuable in its own right; its real virtue lying not in the prospect of a better monoculture of public services, but in a diversity of solutions, each of which is well adapted to local needs. In NESTA’s report Mass Localism , NESTA discussed the kinds of benefits that local solutions offer, even if they never grow beyond their local area: their ability to access local resources and to understand local needs are important sources of efficiency and effectiveness.

Central government often asks how local innovation can be “scaled up” but this is not the solution to the exclusion of all other alternatives. Of course in some cases this consideration is important. But often, the question is not “how can we scale up a single solution?” but rather “how can we ensure lots of well adapted solutions flourish?”.

This has important implications for social finance. An important theme in social finance has been how to fund the expansion of successful social start-ups – the social sector equivalent of venture capital and growth capital in the private sector. This is important, but on its own it will not deliver Mass Localism. For this, we need an effective market providing a wider range of social finance products. Social Impact Bonds , with their ability to channel government commissioning into broad networks of local organisations, are one way forward.  Community Shares , which allows local people to buy into local amenities such as pubs, football teams and shops, is another.

The importance of an effective – and innovative – market for social finance to the success of real localism – Mass Localism – can’t be understated. If you are passionate about this – we would like to hear from you.