Co-op movement responds to £150m community ownership fund in Sunak’s budget

The Co-op Party and Co-operatives UK have responded to advance reports of the chancellor’s spring statement

Ahead of the chancellor’s budget tomorrow (3 March) Rose Marley, CEO of Co-operatives UK, and Joe Fortune, general secretary of the Co-op Party, have responded to reports of a £150m Community Ownership Fund.

The BBC and Daily Mirror have reported that the budget is expected to include a £150m fund to help communities take over local pubs, sports clubs, theatres, music venues and post office buildings. Groups will be able to bid for up to £250,000 matched-funding, and in ‘exceptional’ circumstances applicants will be able to ask for up to £1m to save much-loved local community buildings and spaces such as sports clubs or grounds.

Rose Marley, CEO of UK co-op sector body Co-operatives UK, said the fund finally delivers on a pledge in the Conservative manifesto from December 2019. Her organisation has been among those campaigning for the promise to be honoured.

She said: “We lead the Community Shares Booster programme, which using funding provided by Power to Change and Architectural Heritage Fund, has provided £2.6m in matched investments, leveraging in a further £7.3m directly from the community. This has been raised by 9,917 investors in 41 local community businesses to save pubs, pools, heritage buildings and other local assets.”

She said the new policy would provide match funds to community shares; a report last November by Co-operatives UK showed that since 2012, £155m has been raised by 104,203 people, supporting more than 440 vital businesses – 92% of which are still trading.

“Community shares have significant potential to reduce inequalities and level up society,” added Ms Marley. “80% of people invest in community share offers because of the wider social or environmental benefits of the organisation – and 78% have invested outside of their own locality. Therefore, community shares have the potential to be part of a much broader approach to levelling up society and tackling inequalities.

“We recommended more institutional investment in community shares. We called for governments (national and local), funders and impact investors to channel more money into institutional investment in the community shares market. And we are delighted to see this now come to fruition.”

Along with partners including Big Society Capital and Social Enterprise UK, Co–operatives UK is also lobbying for an extension to Social Investment Tax Relief. “We await the Budget to hear if this has been included,” said Ms Marley.

Also calling for the retention of SITR is Co-op Party general secretary Joe Fortune, who gave the news of the community ownership fund a guarded welcome. Writing on Labour List, he said further steps would be needed to democratise and level up the economy.

Joe Fortune at the Party’s conference in Glasgow in 2019

“Widening ownership and increasing community power is central to the post-Covid political settlement,” he said. “We also know that the current impulses and favoured models of the government in Westminster have not facilitated and will not likely usher in a new community ownership revolution.

“It’s a great tribute to those advocating for communities that new community ownership funding is becoming available – they have worked hard to make the case. But to be truly revolutionary and unlock community ownership, I believe that the funding announced today for community pubs and anything that follows tomorrow must come hand in hand with systemic legal and regulatory change, and new political leadership.”

Mr Fortune said community businesses have led the way in responding to the Covid-19 crisis, from community shops offering isolated communities a lifeline to community pubs repurposing feed people who are shielding.

“Now more than ever, as we shift focus from firefighting to long-term economic recovery, community ownership is critical,” he wrote.

“This should be the perfect moment for communities to step in to reopen and regrow the hospitality sector for the benefit of their community, rather than those pub and club buildings being snapped up at bargain basement prices by private property investors.

Funding certainly is a barrier, and the £150m community ownership fund will help to plug the gap left by the community pub business support programme, which is due to end this month.

“However, with communities able to bid for £250,000 to save their local, the gap between demand and delivery is wide. Many thousands of pubs could be closing their doors forever during this crisis, yet this fund may only offer hope to a few hundred.”

He added: “Funding alone will not result in a community ownership revolution. There are other necessary levers that communities need to pull in order to genuinely take back control. First, we hope that any money committed will include revenue and not just capital funding. Buying a building is one thing – but the revenue to get a viable community business off the ground is crucial for this to be meaningful.

“Secondly, until a premise is up for sale there is very little a community can do about the empty shop or pub next door. Property ownership in the UK is hugely opaque, and communities need better transparency on who owns our high streets. Only once absent owners can be tracked down can disused properties be coaxed back into productive use. Linked to this, as the Shadow Chancellor set out recently, ’empty shop orders’ would give communities and local councils the power to bring vacant shops back into use.”

Mr Fortune also warned that other government policies are less conducive to community ownership, arguing that the new Right to Regenerate “is yet another cover for the selloff of public property … this potential new power leaves private property developers and landbankers alone, focusing solely on public land without any criteria established for community benefit”.

He also called for “important powers for local communities” to be strengthened in the Localism Act of 2011, “as the existing regulations and timetables still present many barriers for communities”.