New approach to core funding?

Full report here

Foreward

This report is based on research and a range of conversations that reveal quite remarkable common ground on how billions of pounds could be untapped and released to local communities. But it also goes further than previous proposals – in suggesting a radical and ambitious partnership between government, the private sector and civil society.

Communities across our country are facing challenges every day. Increasingly, the case is becoming clearer for how an ambitious long-term endowment could help those areas that have – to date – missed out on the proceeds of a growing economy. This idea could be understood as a Community Wealth Fund, tasked with supporting long term, patient investment in the social and civic economy of areas that need it most. This fund would provide the investment and support needed to support strong relationships and social action across England, supporting a richer and more resilient civil society in areas which have struggled in the face  of economic and social challenges.  The government’s Civil Society Strategy, published in August 2018, offers a vision of substantial place-based investment programmes that introduce new models of investment to raise social and economic outcomes and new approaches in communities where there is a lack of capacity and capability to access investment. Our proposal is for the creation of a sustainable pot of money to reinvest long term in communities and to support the development of the community infrastructure that  underpins a strong civil society, from community ownership of assets to investment in networks of local community organisations. We hope this report is a constructive contribution to the debate. It reflects the view of those consulted so far. But it is the start of a process and significantly more consultation and dialogue is needed with stakeholders across the charitable, voluntary and community sector, and with the public and private sectors in order to develop and strengthen the idea. Our aspiration is, over the coming months, to further strengthen a broad alliance in support of the Community Wealth Fund. Much like the fund itself, we hope this report takes us forward, unites rather than divides, and empowers those who want to see local communities thrive. As the Governor of the Bank of England, Mark Carney, says, “Prosperity requires not just investment in economic capital, but investment in social capital”.

Executive Summary

A new wave of unclaimed assets could be worth billions of pounds. While this money may be a long way away, a consensus is already emerging around how these resources could be used most effectively for the benefit of society. The Government, NCVO, Locality and others are all keen to see the money used to provide strategic, long-term funding to support communities who need it the most.

Since the Brexit vote, many people in the UK have started to give greater consideration to how local communities might recapture a greater sense of empowerment and control over their futures. How can we bridge divides and address the feeling of being “left behind”? Rebuilding social capital and trust is back on the agenda – essential to the functioning of our society and economy. We know that civil society builds trust and connections and creates a sense of belonging. Associations enable people to participate in their communities. But civil society is fragile and held back from helping communities fulfil their potential, due to a mix of funding pressures, market forces, myths about charity overheads, and flawed policy responses.  We know we must address the fragility of the institutions and spaces that enable participation and association, in turn rebuilding social capital. This is how we can rebuild trust.

Some places have been left behind by globalisation as our economic model has not benefitted all communities equally. But areas of deep-seated deprivation can recover through emerging models of local economic development. Communities are seizing opportunities to do things for themselves. New Shared Prosperity Funds, which will replace European Structural Funds, will provide a unique opportunity to support and develop these solutions. But prosperity requires investment in social, not just economic capital. We need to nurture social capital in areas where it is weak or nonexistent and help communities develop the capabilities needed to participate in community economic development. This requires a new approach.

So our proposal envisages the creation of a Community Wealth Fund, providing long term, patient investment in support of place-led change – a fund to create opportunity and unlock the power of communities. This fund would seek to empower people to develop solutions and enable communities to develop  their own responses.

Unclaimed assets in insurance and pension funds, bonds and stock and shares are potentially worth billions of pounds. But we could see the creation of a fund worth £4 – £5 billion if a range of resources were brought together. This could include the release of share capital from the private sector, civil society’s stranded assets, other unclaimed assets not yet identified and community assets which already exist at the local level.

It is too early to specify in detail how such a fund would be managed and distributed. But our consultation suggests considerable consensus around the principles of a place-based model, long term funding, community control, national support and collaboration with other stakeholders.

 A fund on this scale could deliver transformative social, economic and financial impact. It could also support community commissioned services, save assets, build new infrastructure, enhance democracy and build new relationships across society.  We therefore recommend that civil society establishes an independent and credible taskforce, with the support and endorsement of Government, to take the Community Wealth Fund proposal forward over the coming months. We look forward to playing our part in its development, creation and success.

  August 2018