Alistair Grimes contemplates the need for national and local government to create the space for CWB to take place, permitting communities and small enterprise to lead without overburdening them.

Alistair Grimes likes to be introduced as “A man who needs no introduction”. He is a former chair and board member of SURF, who has been involved in regeneration in Scotland, England and a number of EU countries for over 40 years, through the Wise Group, Community Enterprise in Strathclyde and Rocket Science (where he is Director Emeritus). He thinks he knows something about social enterprise and financial inclusion. Other than that he is harmless.

When we try and think about Community Wealth Building (CWB) we are often paralysed by two competing instincts. The first is to paint a broad ‘aspirational’ picture of what we want CWB to achieve and usually to focus on what government can do to support this. In part, this reflects the truth that although the problems community regeneration is trying to solve are often spatially concentrated, the solutions may not be (if unemployment is a problem in Saltcoats, the jobs to solve this may be in Glasgow). The second is to look at the very local level and to enumerate ‘case studies’ of successful CWB, and to focus on the local conditions which brought about success, which we hope can then be replicated or scaled up.

In the first case we have the question ‘I can see where you want to go, but how do we get there?’ and in the second case we have the question ‘I can see all these individual examples, but what do they add up to?’

Well, these questions have been around (largely unsolved) for a long time and I don’t have a general solution. I want to offer a few words of warning and then talk about two areas I actually know something about (steady on – Ed) social enterprise and credit unions, which do offer some positive results.
My words of warning would be that a) government (central and local) and government agencies tend to be very bad at this sort of thing. They aren’t set up in the right way and don’t have the right people. The best they can do is create (and protect) a space in which CWB can take place. Letting things happen (and accepting that some will fail) takes courage. A gardener who uproots a plant every month to see how it is doing will inhibit, not promote growth. b) increasing funding isn’t always the solution and is often a substitute for patience (can’t we do this more quickly?). c) you can’t put an unreasonable burden on communities that have been hollowed out by years of neglect and need the patience and skills to rebuild capacity (there is a warning on how this should n be done in the Tom Leonard poem ‘Liaison Co-ordinator’). As Andy Milne used to say, you need to understand the causes of degeneration before you can do regeneration.

SURF needs to believe in its central narrative that local people know best and should be supported.
So how do credit unions and social enterprise contribute to CWB and do they help to bridge the gap between aspirational objectives and case studies to replicate/scale up?

Affordable credit for low-income individuals and families has never been so important for a number of reasons. The cost of living crisis (high inflation, wages not keeping pace) means that more low income groups than ever need loans to bridge the gap between paying out and getting paid, to meet regular pinch points like Christmas and the start of the school year, or to meet ‘one-off’ emergencies. At the same time, traditional lenders like Provident are withdrawing from the market and newer entrants like Wonga, Quick Quid and Brighthouse have also beaten a retreat. Who can step into this gap and avoid an increase in high cost credit at best, and in loan sharking and illegal money lending at worst?

Credit Unions are not the whole answer, but for a significant number of people they can offer much cheaper small loans (£1,000 over 12 months will cost as little £66 in interest, compared with between £171 and £551 for commercial alternatives) and, crucially they offer the opportunity to save and give families some slack for the next financial emergency. In this sense they contribute to CWB by keeping more money in the hands of low-income groups (who are more likely to spend it locally) and building up a level of financial resilience through saving. For example, 10,000 members will save between £1.7m and £5.5 m on interest payments compared with commercial alternatives.

What credit unions need are five things. Capital to lend, better marketing (only 7% of the Scottish population are members), better IT systems to exploit the shift to digital, an investment in management and governance and investment to expand their product range (insurance, funeral costs). This is not a short-term fix but involves long-term behavioural change, and needs patient investment.

Social enterprise was, in the glow of the Big Society, often described as the next big thing. Twelve years later it is still being described as the next big thing. Social enterprises are sustainable business with a social mission that usually offer a combination of providing local services, employing local people and re-investing profits in local communities. They are adept at turning needs into markets.

Most of Scotland’s 6,000 social enterprises are small and local but collectively they support over 88,000 jobs and generate £4.4bn in income, with 75% paying the Living Wage and 65% led by women.

Like all small businesses they are currently having a hard time in the current economic downturn. Some will go to the wall, but other market-based opportunities will arise to bring in fresh blood. Again, social enterprise is not the whole solution to revitalising Scottish towns, but it is an important feature of business bio-diversity, especially in places like the Highlands and Islands and south of Scotland where a typical social enterprise looks very much like a typical SME in that area. They bring a commitment to place as well as to profit.

If fostering small, local businesses who can win local contracts is part of the support that government can offer through procurement and contracting processes, then social enterprise should be well place to deliver this.

Social enterprises crucially need access to capital designed around their business model, and better access to public markets.

SURF might think about areas of common cause with social enterprise intermediaries on how and where place-based goods and services can be delivered.

If you would like to join SURF’s Community Wealth Building Network please email emma@surf-old.local