Asset ownership will help communities survive the recession

Local communities are in for a hard time. Not just the economic downturn, but also technological change, a widening poverty gap, demographic change, the shortage of affordable housing, the threat of climate change – all of these will have far reaching impacts in every part of the country.

If we fail to respond effectively, the places we live in will become fragmented and demoralised, with negative consequences for us all. Should we leave it to others to find all the solutions? No! All the efforts of government and others will ultimately be in vain if communities, at a local level, are not themselves the driver for change.

I work with 450 development trusts across the UK. Our experience has been that, even in the most difficult circumstances, people can achieve extraordinary and surprising results. Above all, this is true where local organisations develop a culture of enterprise, people-led and problem solving, developing businesses which trade successfully, generating surpluses to be reinvested for community purpose.

Asset ownership is central to this. Bringing underused and even derelict land and buildings into community ownership can overcome blight, deliver facilities that people want, generate community income, and increase the spirit of community self-help.

Half a billion pounds of assets are now in community ownership, in the DTA network alone. The new Asset Transfer Unit will, we hope, lead to even more. Mostly we look forward, but it can sometimes be useful to look backwards, for example to the way people responded to the Great Depression of the 1930s.

One thing they did was take land into social ownership for smallholdings and allotments – I hope to see a lot more of that in the next few years. There is a rich tradition of community shares issues in this country, whereby local people are given a chance to take a stake in local enterprises and share in the rewards.

Forgotten about for decades, there have been excellent examples recently, and Co-ops UK and ourselves have launched a government backed programme to promote community shares and bonds. At their best, these ways of doing things ‘lift’ a whole community, increasing confidence, bringing out the best in people, improving relationships between groups, stimulating local economic activity, improving stewardship of our scarce resources.

In every sense, community enterprise creates wealth in communities, and keeps it there.What should government do? Well one priority is investment – the kind of investment pioneered by the Adventure Capital Fund and Yorkshire Key Fund. Communitybuilders, due this Summer, is a step in the right direction but more, much more, is needed.

Perhaps our government might take its cue from the Obama election pledge to establish a Social Investment Fund Network and a Social Entrepreneurship Agency to deliver investment for local community-identified priorities. And why has our government’s bailout for banks not been accompanied by a Community Reinvestment Act to increase the supply of private sector finance into poor communities? What else?

We must put in place the Community Allowance – people on benefits being allowed to take on part time paid sessional work in local community groups and social enterprises – getting things done and for some a stepping stone to longer term employment. We are hoping a UK-wide pilot will be set up this year.We ourselves must help community enterprises run a tight ship – raising the standards of financial management and business performance right across the sector – but I tell you let’s stop pretending that Business Links is the means to achieve this – it will only happen if we are given the means to do it ourselves.

Now, it must be obvious to everyone that some community enterprises will suffer in a recession, as their sources of income dry up, grants are removed, and credit is squeezed. And yet the dominant mood among development trusts is far from bleak. We see opportunities to refocus business to meet the new challenges and tap into new income streams. We see opportunities for asset acquisition, creating a long term foundation for our movement.

Above all we ask ourselves, if we don’t step up now, then why are we in business at all? We know about operating in areas of market failure – where the state and the private sector have not succeeded. We offer the local solutions when the markets fail. That’s what we do. Now is the time to do it, to do more of it, in every community, across the whole country.