Trust, enterprise and community

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In the light of the Culture Secretary’s recent calls for greater innovation in Lottery funding, Steve Wyler & Alan Wallace put the case for a radically different approach to the financing of community renewal

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Communities in the most deprived areas have long been the subject of intense policy interest from government and a host of other agencies. A series of programmes and initiatives has been launched, monitored and evaluated and relaunched. Mountains of money have been spent. A whole new industry – the regeneration industry – has been created, and is thriving. But the communities themselves? Take a walk around our outlying estates, our inner-city neighbourhoods, our former coal, steel and fishing towns and villages, and ask what has changed for those living there? Time after time the answer will be, not much. Of course it is true that the problems are complex, deep and structural. The

‘For government and other funders, the shift to an investment approach is the key policy change required in the field of regeneration. It will not be easy’

global economy bears down heavily on our poorest communities, sucking out wealth and replacing it with poverty, disillusion and despair. But this only goes part of the way to explain the failure of so many regeneration programmes. Why is it that so much that is done in the name of community renewal leaves so little behind? Why is it that so many people who ought to have benefited from these programmes end up feeling betrayed and embittered? The answer is shockingly simple: a deep distrust of the communities themselves. It is distrust that has created regeneration programmes that are conservative, risk averse, and inherently opposed to innovation, challenge and change. It is this distrust that has tainted regeneration with a malignant form of welfare philanthropy, which labels communities and reinforces dependency while at the same time bemoaning the lack of ‘active citizenship’. And it is distrust of communities that has created a great mass of professionals, consultants and bureaucrats that absorb – sponge-like – so much of the resources they come near.

Enterprising communities
Is there a different way of doing things? Yes, there is. It is based upon the idea that communities themselves can be the most powerful agent of their own regeneration. This is no new idea. Resources and knowledge in the hands of local people have encouraged community-led action and promoted long-term sustainable communities for generations.

Mining communities are, par excellence, the original model for self-reliance. Responding to real poverty and need in an earlier age, miners initiated the first welfare support arrangements. On top of the industry levy, they contributed from their own wages to support those less fortunate in the community, developing sports and recreational facilities, supporting Miners Welfares as social and cultural centres and, above all, maintaining that social infrastructure by continuing to meet the ongoing cost of numerous local groups and services. These communities generated and maintained their own community assets.

Times have changed. Economic and political forces have ripped the economic heart out of our coalfield and other communities. Without the ongoing local economic support, physical social capital has decayed, people have left.

One successful response to this decline over the last decade has been the community enterprise movement. Where large-scale regeneration programmes have been led by community organisa-tions, the results have left the cynics baffled and bewildered. Manor and Castle Development Trust in Sheffield, Royds Community Association in Bradford, the coalfield Village Companies in the Midlands, Eldonian Group in Liverpool, Paddington Development Trust in West London, are all managing multi-million

pound programmes. Not only are they bringing about vast improvements in the immediate environment, public safety, health, and social amenities, but they are also kick-starting a local economy through local enterprise support and community-owned businesses, from chip shops to managed workspace to leisure and sports centres.

Nowhere is the vitality of this movement seen more vividly than in the towns and villages hardest hit by industrial decline. Ibstock Community Enterprises in the Leicestershire coalfields, Community Action Furness in the former shipbuilding stronghold of Barrow-in-Furness, Arts Factory in the

‘The best funders of the community enterprise sector have been grant-making charitable trusts which employ people able to make sophisticated judgements and which operate policies responsive to these judgements’

Rhondda Valley, Amble Development Trust on the Northumberland fishing and coalmining coast – all are striking examples of community-led regeneration through self help and enterprise.

Underpinning much of this success has been the realisation that community-led enterprise – combining social goals with business ventures – can be a powerful agent for change, recycling local wealth, providing intermediate employment, delivering local services and producing a revenue stream through trading which can then be re-invested in further community action.

Investing in community enterprise 
There are many in the regeneration sector who believe the time is now right for funders to support a new approach. The Development Trusts Association (www.dta.org.uk) and New Economics Foundation (www.neweconomics.org.uk), for example, believe that to achieve a step change, community enterprise needs substantial capitalisation, major reinvestment in community-owned assets. This will require from funders a new level of understanding and an investment perspective in relation to grant making rather than a client/supplier contract perspective in which the funder typically seeks to buy outputs (see box, right). 

The role of independent funders 
For government and other funders, the shift to an investment approach is the key policy change required in the field of regeneration. It will not be easy. It requires an acceptance of risk and a more sophisticated approach to regulation with an emphasis on continuous improvement and outcomes rather than activity monitoring and control. It requires an acceptance that resources and decision making can be transferred from the state to community organisations. In response to the special and deep-rooted needs of the coalfield communities and as a policy experiment in delivering regeneration support, the government has funded the Coalfields Regeneration Trust as an independent grant-making charity with about £17m a year to distribute (see www.coalfields-regen.org.uk).

The Coalfields Regeneration Trust’s decision to deploy development workers across their target communities was a major factor in the success of its first round and is set to be strengthened as the trust embarks on a second three-year round. Able to engage and support applicants, development workers can also help to foster and maintain a longer-term and trusting relationship between funder and the group supported. Funders seriously committed to an investment approach will see the ongoing relationship with their clients as a key part of the deal, a mutually supportive and learning relationship which takes both partners forward. The 1998 National Lottery Act allowed most Lottery distributors to consider endowments, to engage in more developmental work and to solicit applications where appropriate. Major capital grants in Arts and Heritage amount effectively to investments in the asset bases of

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artistic production and our national heritage. Extending the investment approach into community economic regeneration could enable funders to address the thorny problem of long-term core-funding support by endowing the assets which can generate the income, helping to move at least some groups away from constant grant dependency.

As in the commercial sector, exercise of judgement and flexibility in a complex funding and delivery environment are necessary to an effective investment approach. The best funders of the community enterprise sector have been grant-making charitable trusts which employ people able to make sophisticated judgements and which operate policies responsive to these judgements.

There is a strong case to allow funds to be used to build up an endowment or a property portfolio. For community organ-isations especially, multiple social and economic benefits can flow from this, which should be taken into account alongside the level of financial return. A property portfolio can be used to stimulate a local economy, and meet housing or business needs – sometimes in areas where the public or private sector has failed. An endowment or property in community control gives other funders confidence and can be used to lever in further resources. In some cases the investment portfolio can be used to invest effectively in small business development in run-down areas. Not least, management of the asset by a community organisation enhances the stake of local people in the renewal of their neighbour-hood, and generates further community action. Independent funders, including independent charitable trusts, the Coalfields Regeneration Trust and the Lottery distributors, are already trailing the way for government to follow. It will require a fresh mind-set. In the end it comes to a core question: are we willing to trust communities to be the driving force for their own renewal?

Steve Wyler is Director of the Development Trust Association.

Alan Wallace is Chief Executive of the Coalfields Regeneration Trust, and a Board member of Priory Campus Ltd and the South Yorkshire Investment Fund.