Beyond ‘levelling up’: Making funding work for neighbourhoods

As the new government sets out its agenda, Local Trust’s policy and parliamentary manager, Tilly Steward, explains how a Community Wealth Fund would be able to make a difference in doubly disadvantaged neighbourhoods

Last week, the King’s Speech formally opened the first session of the new parliament. Alongside all the traditional pomp and fanfare, there was a clear indication that Labour in government wants to hit the ground running – with one of the highest number of bills to accompany a speech from the throne in recent decades.

Contained within this ambitious legislative agenda were some positive plans for change. These include the English Devolution Bill, which promises to empower local communities “with a strong new ‘right to buy’ for valued community assets, such as empty shops, pubs and community spaces.”

However, as we know from research by the APPG for ‘left behind’ neighbourhoods and the work of the Community Ownership Commission, it’s vital that any future asset ownership rights or funding are accompanied by civic capacity building.

This is to ensure that the benefits of new community powers don’t only go to areas with pre-existing networks and expertise, but also to the places in greatest need.

Tackling this challenge will require long-term investment in the social infrastructure of our most deprived neighbourhoods. One clear route to achieve this is through the Community Wealth Fund (CWF). Resourced by dormant assets, it’s an initiative legislated for, but not yet finalised by, the previous government before the general election was called and parliament was dissolved.

A community-focused opportunity

The Community Wealth Fund provides scope for an immediate and tangible commitment of funds, that would support the rebuilding of civic confidence and capacity in the doubly disadvantaged areas that have most to gain from Labour’s vision for national renewal.

The purpose of the fund would be to build the capacity of residents to develop local ventures – like taking on a community asset, starting a social enterprise support programme, or even building a wind turbine. In time, these could become self-sustaining sources of income for a neighbourhood, alongside close partnership working with the public sector.

Getting this right is important. Over the next decade, it’s estimated that the funding available through dormant assets could be as much as £800m. This represents a major potential resource allocated outside of HM Treasury to support the transformation of our most deprived communities.

It is also significant because developing sustainable, community-led civic organisations and institutions typically takes longer than average government spending settlements and electoral cycles. The Community Wealth Fund would provide the much-needed, foundational investment in capacity building that mainstream funding for neighbourhood regeneration could build upon.

This is why Local Trust, as a founding member of the Community Wealth Fund Alliance, is asking the new government to commit to an immediate review and expansion of the proposed CWF, alongside a broader realignment towards the campaign’s original principles.

These principles are based on the extensive body of research and evidence developed over the course of the Big Local programme, which Local Trust delivers, together with learning from previous government initiatives, which show the value of stable delivery and assurance of funding to communities over the long term.

The future for funding

Now inherited by Labour, dormant asset funding forms part of the broader patchwork of programmes and resources that were made available for economic development under the previous government’s banner of ‘levelling up’.

The ultimate failure of this agenda holds important lessons for neighbourhood regeneration more broadly:

1. Centrally-managed funds and national appraisal systems that don’t reflect local needs struggle to make an impact in the places most in need of investment. More than two years on from the Levelling Up White Paper, the Public Accounts Committee found that just over 10 per cent of promised levelling up funds had been spent and were making a difference on the ground, with “no compelling examples of delivery.”
2. Local government has been forced to reduce funding for vital community services and facilities and placed under increasing pressure to do more with less. Councils have been presented with stop-start, short-term funding pots far smaller than the amounts cut from their budgets since 2010.
3. Competitive bidding has proved ineffective and wasted scarce resources. The Local Government Association estimates that chasing down pots of money distributed from across Whitehall costs each local authority £2.25 million a year. And while some local authorities have been active in addressing the challenges faced by their most deprived neighbourhoods, others need support and encouragement to take them on.
4. Even where funds were secured, the areas most in need of support often missed out. Doubly disadvantaged neighbourhoods tend to be peripheral. Typically, they are post war social housing estates on the edge of towns or cities, or are located in coastal areas. Their residents can feel that they have been forgotten by both local and national government, being ‘asset stripped’ of local services and facilities over the years because of reductions in public spending. The perception is that the investment available to local authorities inevitably gravitates towards and sticks to city and town centres. 

The Big Local programme provides success stories of building confidence and capacity in the most deprived neighbourhoods.

Our experience is that community-led, and comparatively low-cost, solutions are extremely effective in preventing policy problems before they arise, across nearly every metric. The long-term evaluation of the programme outlines, above all, just how important social infrastructure is to achieving change in the places that need it most.

The new government has rightly recognised that “Westminster does not have the local knowledge, capacity and flexibility needed to take advantage of every opportunity available in every place.” Prioritising non-competitive, endowment-style investment through the Community Wealth Fund represents an important first step in building stronger, more resilient communities from the ground up.

The Community Wealth Fund campaign was re-launched with a parliamentary event for MPs on 22 July. For more information on the Community Wealth Fund Alliance please contact roshni.mistry@localtrust.org.uk

CWFA website