Following last years Chancellor Jeremy Hunt’s Autumn Statement, 65% of UK adults say government spending alone is not enough to solve social issues in their local area, according to new research from Big Society Capital.
58% of the 2,000 surveyed also say that social issues including homelessness and community transport are better delivered by businesses and charities based in their local community rather than larger national organisations.
This is most prominent amongst 18–34-year-olds, with 65% agreeing.
The finding comes at a time when public spending is under increased pressure and local community businesses, who often struggle to access mainstream finance, are increasingly looking for alternative sources of capital.
Investment into charities and social enterprises is now worth nearly £8 billion – with capital invested into a wide range of enterprises such as Food Works Sheffield, which intercepts food waste and distributes it to local people on a Pay What You Can Afford basis.
Rene Meijer, CEO at Food Works Sheffield, says:
“Food waste is the third biggest producer of carbon emissions on the planet after the USA and China. Since 2015, our mission has been to intercept 500 tonnes of food waste every year to provide millions of sustainable meals across the city.”
“Responding to the current crisis requires urgent action from everyone, and socially-motivated investment will be increasingly important for us to continue our vital work.”
In their local area, the social issues people are most concerned about are Health and Wellbeing (27%); followed by Homelessness (14%); then Employment, and Financial Inclusion (both 13%).
78% of people say that businesses, social enterprises and charities based in their local community should be able to access finance to grow and offer more local support services.
These findings support the Community Enterprise Growth Plan – which aims to help communities by growing local charities and social enterprises tackling social issues.
The Plan, which is backed by Big Society Capital plus social sector partners, hopes to attract a portion of the Government’s dormant assets scheme, which will distribute an estimated £880 million in abandoned assets from insurance and pensions products, investment and wealth management over the next decade.
Stephen Muers, CEO at Big Society Capital, says:
“Our new data shows that the UK public want to see more support for local enterprises delivering solutions for the issues they care about the most.
“We could not agree more. That’s why, together with sector partners, we are asking for further dormant assets to be allocated towards investment for community enterprises.
“We believe an investment of £500 million over ten years would unlock at least the same amount of private capital, doubling the amount available to communities, and multiplying its impact as the use of repayable investment into enterprises allows the money to be recycled and go even further.”
Big Society Capital was launched in 2012, using £425 million from dormant bank accounts and £200 million from four high street banks. It has committed £821 million so far, showing that the initial funding is now generating a return which is reinvested.
In addition, the polling results show that 57% of the public say it is important for them to source goods and services from providers with a social purpose, compared to businesses considering only profits.
Wellington Orbit, a community-owned cinema in Shropshire which is transforming a disused bank building into a cultural hub, is an example of an organisation doing just that.
There is currently a lack of funding to art and cultural facilities in the UK, especially outside of main cities. The residents of Wellington, Shropshire, were conscious that their town lacked such facilities, especially since the creation of the New Town of Telford.
Ray Hughes, Chief Investment Officer at Wellington Orbit, says:
“Older residents of Wellington in Shropshire particularly felt the absence of a hub where they could meet friends.”
“We used a mixture of grants and social impact loans to transform the once derelict building into a 63-seat cinema and café bar. Next, we’re hoping to build multi-purpose rooms for art galleries, exhibition areas, meeting rooms, a dance studio and rehearsal rooms.”