The growth of community businesses is driven by attempts to rescue libraries, pubs and other local assets under threat from closure, according to research released by the independent trust Power to Change and the non-profit Social Finance.
The report found that the number of community businesses in England has grown by 5% in the last year, outstripping growth by both charities (1%) and small businesses (2.3%).
Community businesses are charities and other organisations run for and by local communities, which re-invest all surplus back into the local area.
The report found:
- 300 local libraries are now run as community businesses (20% growth on 2015)
- 1,100 sports and leisure facilities are now run as community businesses (10%)
- 40 local pubs are now run as community businesses (14%)
- 330 local shops are now run as community businesses (3%)
Community businesses are also more likely to seek trading profits to make ends meet over the next year than try to find new grants and volunteers. In a ‘sea-change’ in the way local communities approach a tough future, 35% of community businesses plan to prioritise trading in the next twelve months, compared to only 28% who want to bring in new grant income and 30% who want to attract new volunteers.
The Community Business Market in 2016 research also found:
- The number of community businesses in England has risen 5% in the last year, to 7,085
- Their combined income has risen to more than £1bn in the last year
- Their combined assets have risen to £2.1bn in the last year
- They employ 36,000 staff and 200,000 volunteers
The report argues that community businesses are ‘survivors’ during such difficult economic times, with virtually no reports of them going out of business.
Richard Harries, Director of the Research Institute at Power to Change, said:
‘Community groups are showing themselves to be increasingly business savvy and resilient as they gear-up for more tough times ahead.
‘This is good news. Communities are worried about the future of their public services and high streets, but these figures show that local people are also taking solutions into their own hands. Thousands of much-loved buildings and services would have disappeared if community businesses hadn’t stepped in.
‘This sort of model is here to stay. It represents a sea-change in the way our local communities are planning for the future’.
Adam Swersky, Associate Director of Social Finance, said:
‘The community business market has shown remarkable resilience in the face of declining public spending, challenging business models, and policy changes. Over the past year, despite these trends, we found that the market grew overall. Over three years, not a single market sector has shown signs of decline.
‘This is a testament to the ability of community businesses to diversify their income, flexibly adjust to market conditions, and draw on the unique resources and talents of the communities they serve’.
From secondary modern to community business: The Linskill Centre, North Tyneside
The Linskill Centre, situated 8 miles outside Newcastle, was built in the 1930s. It was a secondary modern and, after the school shut in 1984, a council-run community centre.
When all public funding was withdrawn in 2005 and the building faced demolition, local campaigners stepped in to shape its future. They persuaded the council to entrust it to the community, and in 2006 North Tyneside Borough Council agreed for a new charitable trust to manage the building on a 50-year lease. A number of community businesses now operate from The Linskill Centre, with a café, room hire and tenants all contributing to profits which are re-invested into the project.
The Linskill Centre’s strategy for the next five years explicitly recognises the role of local people in providing services once covered by local councils:
‘The impact of public sector cuts means the local authority will no longer be able to provide the facilities or services it previously did to our communities and the Trust, along with other partners, will aim to fill some of these gaps while liaising with the local authority. The Trust is locally led and responsive, it can provide more cost-effective solutions to running services and also help in prevention of problems while improving people’s lives through its community projects.’
The Linskill Centre received funding from Power to Change earlier this year.