Number of community businesses rising in England

At the launch of a new report by Power To Change last week, it was revealed that the number of community businesses in England has grown by 9%, from 5,035 in 2014 to 5,650 in 2015. The report says that such businesses contribute £900m to the economy.

Power to Change is a charitable trust endowed with £150m from the Big Lottery Fund to grow community businesses in England.

Community businesses take many forms, with some of the more well known examples being pubs (such as The Bell, recently featured in Pioneers Post Quarterly) and libraries, particularly since government austerity cuts have affected the latter. ‘Shrinking local authority budgets lead to asset transfers and outsourcing of services to new community businesses,’ notes the report.

An interesting example of a community business included in the report was Hill Holt Wood, purchased privately in 1995 and now a social enterprise that offers education and training in forestry management and a hall for mixed community use venue hire, as well as being a green open space for the public to enjoy. Public land management such as this was one sector identified as having potential to grow.

Sectors that were seen as ‘growing, but at risk’ included energy – due to government policy changes that are now limiting subsidies – and food and farming – since the end of grants such as Making Local Food Work and high food prices.

The attraction of community businesses is described as being their creation of social capital, specifically that local people are engaged in keeping a community asset used. The report describes it as ‘engaging local people as creators, not just consumers, of their outputs.’ It also saw community businesses as serving to strengthen community ties and keep money within a local economy.

Despite the increase in the number of them, a vast discrepancy between community businesses in terms of income was indicated. ‘Six businesses had income greater than £4m per year… while community libraries rarely earn more than a few tens of thousands of pounds,’ the report states.

Positive indicators for the development of community businesses that were identified included on-going devolution to local areas and communities, a growing number of graduates choosing to forge their careers in social enterprise and more diverse funding options including crowdfunding, community shares and blended grant-loan finance.

Despite this, the report found that community businesses are still largely grant funded. Social investors surveyed by the report noted ‘relatively few community businesses are in a position to utilise this type of funding as it requires an appetite for risk, robust plans for growth and a reasonably profitable business model’.

Photo credit: Mark Loudon