Investing in community-led infrastructure and social capital can play an integral role in supporting the government’s flagship ‘levelling-up’ agenda for the most ‘left behind’ areas of the country, new research has found.
Frontier Economics was commissioned by place-based funder, Local Trust, to collate existing evidence to provide an independent and robust assessment of the economic basis for investment in social infrastructure in ‘left behind’ areas, and to quantify the potential scale of the economic, social and fiscal returns from these investments.
It reveals that for every £1m invested, there are estimated fiscal returns of £1.2m (at least 50% of which are likely to be cashable) and wider economic and social returns worth a further £2m over a ten-year period, including:
- Increased employment contributing £740,000
- Increased health and wellbeing £670,000
- Higher income in the local economy £500,000
- Reduced crime £130,000
The robust nature of the research means that figures should be seen as a likely lower bound and in reality, the return could be higher.
Frontier set a high bar for inclusion of evidence in their estimates of the returns to social infrastructure investment. They selected estimates of impacts where a plausible causal link can be established in theory and where the studies use appropriate methods to isolate causal impacts, wherever possible. Their approach was also tested throughout with an Advisory Group of leading sector experts.
Using only robust evidence (which saw over 100 papers reviewed) and with conservative assumptions, they found that investment in the social infrastructure of the most ‘left behind’ neighbourhoods can generate significant economic payback to the Treasury (HMT).
It also found that the investment could deliver other important benefits including improved social cohesion, civic engagement, reducing loneliness, as well as delivering environmental benefits.
In addition, it shows the 20% most left-behind areas have community needs that are almost three times as high as national averages.
225 wards across England are classified as ‘left behind’ because they fall within the most deprived 10% of areas on the Index of Multiple Deprivation (IMD) and also lack social infrastructure such as places and spaces to meet, an active and engaged community, and transport and digital connectivity. They are home to 2.4 million people across England and are predominantly located in coastal areas and on the outskirts of post-industrial towns and cities in the North and Midlands. These places were initially identified by research conducted by Oxford Consultants for Social Inclusion (OCSI) for Local Trust, in 2019.
This new research highlights the benefits of investing in social infrastructure in these places. It also forms part of Local Trust’s submission to the government’s Levelling Up white paper, which sets out the case for the next wave of dormant assets to be directed to a new Community Wealth Fund to provide long-term support to the residents of ‘left behind’ neighbourhoods to rebuild their social infrastructure.
It also calls for at least 20% of the UK Shared Prosperity Fund (UKSPF) to be earmarked to support community economic development in ‘left behind’ neighbourhoods, along with a new What Works Centre for Community & Neighbourhood Improvement, and a development programme for community leaders who can drive forward the vision of levelling up this country.
The white paper submission from Local Trust argues that resources and investment should be targeted at ‘left behind’ neighbourhoods. Funding should also be long-term (over 10 – 15 years) to build community confidence and capacity to encourage and enable community leadership.
Chief executive of Local Trust Matt Leach said:
“Investment at a neighbourhood level delivers long-term benefits, and this new research demonstrates how big an impact it can have on people in local communities when you invest in their infrastructure – it can help improve health and wellbeing, as well as being good for the environment and ultimately paying for itself in terms of returns to the Treasury.”
Sir Gus O’Donnell, executive chairman of Frontier Economics said:
“Levelling up is high on the political agenda but more robust evidence is needed to ensure that investment is well targeted and offers value for money for the taxpayer. Frontier’s work with Local Trust shifts the dial for social infrastructure investment by drawing together just such an evidence base for targeted investment in left behind places.”
Local Trust is part of an alliance of over 420 organisations calling for the establishment of a Community Wealth Fund to channel investment directly into these 225 ‘left behind’ neighbourhoods to develop community spaces and build residents’ confidence, capacity and skills.