The future of the left since 1884

A growing movement

Community businesses are vital for a fairer Britain, write Vidhya Alakeson and Nick Plumb



The past two years have seen some of the most devastating moments in our nation’s history. Despite this, there has been a source of light in the darkness. The resurgence in community spirit, a concept many believed lost to a bygone era, has shown itself during the crisis. And it is community business that Labour must support as we look to the future.

The community business sector has transformative power – locally rooted and community-led, they trade for community benefit and make life better for local people. They take many forms, from multi-purpose community hubs, food growing projects and health and wellbeing centres to community shops, pubs and leisure centres. They are the very fabric of our communities.

It is a sector that is growing steadily and if nurtured, has the potential to help rebuild a fairer nation after the pandemic. Since 2014, the number of community business has more than doubled from almost 4,500 to more than 11,300 at the latest count.

This growth is part of the wider movement of people and places challenging the current extractive model of capitalism. It is a reflection of people’s desire to see more of the wealth generated in a community, retained in the local economy and a growing sense that people want to be active in shaping their future not passive recipients of whatever the state or market has to offer.

Community businesses stand out from the centralised corporate model in that they are agile, in tune with local needs and able to adapt to changing demands. This was never more clearly demonstrated than when the UK went into lockdown in March 2020.  Nine in 10 community businesses surveyed by Power to Change adapted or changed their services in response to the pandemic, with nearly half providing services remotely. Many transformed their service offer overnight – moving mental health support services online, for example, or quickly developing food delivery services for those forced to shield during the early stages of the pandemic.

This adaptability translates into resilience. During May and June 2020, only 1 per cent of community businesses had ceased operating and did not anticipate reopening. In a survey by the British Independent Retailers Association at a similar time, 20 per cent of retailers said they did not intend to reopen after the relaxation of lockdown restrictions. It makes for a striking comparison and is testament to the business model.

The social and economic impacts of community businesses are clear. Community-owned spaces contribute £220m to the UK economy, and 56p of every £1 they spend stays in the local economy, compared with just 40p for large private sector firms. Community businesses are often vital actors in areas of economic disadvantage – so called ‘left behind’ places – and work with people most disadvantaged by the labour market.

Community business is thus a vital partner for a future Labour government thinking about how we build a fairer economy and stronger society. Indeed, this is already happening at a local level. Many of the local authorities engaged in community wealth building – a majority of which are Labour-led – have strategies to encourage more businesses that enable greater wealth and resources to be kept within the local economy. At a national level, there are several opportunities for a Labour government to turbocharge this growing movement.

The pandemic has accelerated the decline of the high street, which has been decades in the making. Communities are responding by transforming their high streets from the bottom up, with community businesses at the centre of their approach, as seen in places like Plymouth and Dumfries. They recognise that the retail-driven model is dead and are remedying this by repurposing empty space to provide facilities that meet community needs, becoming a destination on the high street, and driving footfall to other businesses. But all of this is happening despite the wider system.

Community Improvement Districts could provide local residents genuine power over the levers of economic development at a town centre level. A Labour government should underpin the capitalisation of a High Streets Buyout Fund. If, as predicted, vacancy rates on the high street continue to increase, vulture capitalists will be on the hunt for depreciated property. They will have the capital to move quickly and so a vehicle is needed which can move at this same pace and has the necessary funding to compete on the open market – but with the ultimate aim being to get properties into community hands, aligning ownership on the high street with long term interest in place.

Alongside these specific policy interventions, Labour should embrace a radical devolution agenda, which seeks to harness community power and devolve power and resource to places in need, in turn entrusting community businesses to use this money to address local priorities. Such a move would represent an important first step into a new era of community power. And we need that now more than ever.

Vidhya Alakeson

Vidhya Alakeson is chief executive at Power to Change


Nick Plumb

Nick Plumb is head of policy and public affairs at Power to Change


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