One month on from launching our Futurebuilders Learnings, our Policy Lead Will Thomson explores the value of social infrastructure and how patient, flexible capital can help left-behind places to level up.
Another week passes with more news of the UK’s impending economic crisis, as a result of COVID-19. In the three months to June, GDP fell by 20.4% - the deepest recession since records began. The latest ONS Labour Market Overview for August found the labour market to have suffered its worse quarter since the financial crisis: in July, 114,000 fewer people were in payed employment when compared with June, and 730,000 fewer people were in paid employment when compared with March. It is also likely that these unemployment figures will jump as the furlough scheme ends in October.
Even as some parts of the economy ‘bounce back’, there are places and communities that continue to be severely affected – experiencing sharper rises in unemployment and a protracted collapse in local spending. It is these places with existing economic vulnerabilities, with low local purchasing power and a higher proportion of people working in precarious or insecure jobs, that will find it hardest to recover from this crisis.
One thing that has become apparent from this crisis is that the places with stronger communities and robust social infrastructure have been more resilient and better able to respond to the challenges posed by this pandemic. Across the country, there was a proliferation of COVID-19 Mutual Aid Groups that formed in the days and weeks following the national lockdown. At the same time many charities, social enterprises and community businesses pivoted operations to quickly respond to the needs of their community. In our Grimsby Deep Dive, we explored what this looked like at a local level, with social enterprises like NAViGO Health and Social Care diverting operations and redeploying staff to safeguard some of their most vulnerable service users. But what exactly do we mean when we talk about social infrastructure?
The value of social infrastructure
Social infrastructure consists of the spaces, facilities and networks that are crucial to the development and maintenance of social connections within a community. It builds public trust, promotes sociality and develops resilience. More than just fulfilling an instrumental need, it provides space to counter social isolation, improves physical and mental wellbeing and creates inclusive environments – regardless of age, race, gender, sexuality, or income.
Buildings, facilities and the built environment can make up social infrastructure – this includes community hubs, libraries, museums, parks, pubs and cafes: as too can local services and organisations, such as those that work in mental health, skills and training, social care or youth services. These are the fundamental components of community building, developing trust and achieving cooperation.
Many of the most deprived areas of the UK are desperately lacking in vital social infrastructure, including places to meet and access to local services. This impacts upon the life chances of the people living in these areas: a report by Local Trust found that people in ‘left behind’ areas – communities with a social infrastructure deficit – had high unemployment (more than double the national average), high levels of child poverty (double the national average), low household income (£7,000 less than the English average), and significant skills deficits.
These are places where the private sector does not (and likely will not) invest in due to poor returns; meanwhile councils face significant budget pressures and are and increasingly unable to provide the array of local services that meet the needs to the local community. This leads to a spiral of decline in these communities: people and businesses move out, homes and retail units become vacant, unemployment rises.
A recent report by the APPG for Left Behind Neighbourhoods found that the communities most lacking in social infrastructure (civic assets, a vibrant social sector, local networks, good connectivity and an engaged local population) were less resilient to many of the negative changes brought about by the pandemic. These places have received lower levels of COVID-19 charitable grant funding than other areas – less than half the funding per head received by other deprived areas and one third of England as a whole. There were also fewer mutual aid groups established in these ‘left behind’ neighbourhoods – with 3.5 per 100,000 population, compared to 7.7 per 100,000 in other deprived areas and 10.6 per 100.000 per population across England as a whole.
Figure 1: COVID-19 Charitable grants per 100,000 population
It is clear that to ‘level up’ these communities – to build resilience, improve life chances and enhance wellbeing – there must be greater attention focused on developing social infrastructure that is both accessible and inclusive. The social economy, with its explicit commitment to putting people first, will be essential in creating and maintaining this infrastructure. This will require the right kind of investment and support from local and national government, as well as better collaboration between the local private sector and social economy.
Patient, flexible investment to strengthen social infrastructure
We have recently published the data and learnings from the Futurebuilders England Fund, which provides some answers to long-standing questions around ‘what makes social investment work’ – and shares some useful and compelling insights into how we can ‘level up’ and create fairer communities. The learning project has identified some distinctive attributes of social investment: it is patient – with an average loan length of 13.9 years; it is flexible – demonstrating the long-term commitment to supporting investees through difficult times; and it invests where most in need – with over 40% of investments going to the 20% most deprived areas of the country.
Futurebuilders invested in social and community businesses that, among other things, ran local health and social care services, took over buildings to be used as community space, or provided affordable childcare and support for people with disabilities. In other words, it strengthened local social infrastructure – by supporting organisations to provide the spaces and services that facilitate social connection, improve health and wellbeing and build community resilience.
This kind of patient and flexible capital also reinforces the enduring presence of this social infrastructure in a community. With an average loan period of almost 14 years, this long-term commitment helps to embed these social purpose organisations within their community, and over time many become significant presence there. For example, Foresight North East Lincolnshire, a disability charity and Futurebuilders investee based in Grimsby and Scunthorpe, has grown as a community anchor over time: it now runs a day service and provides supported housing for people with disabilities, as well as operating two community hubs, including a local library.
At SIB, we know that social investment will have a substantial and significant role to play in the recovery. We want to ensure that we are targeting funding where it can most effective at promoting equitable outcomes. We don’t just want to see communities recover, but come back stronger, fairer, and more resilient. The Government wants to ‘build build build’ its way out of the recession, but this will be a missed opportunity if it neglects the central role that social infrastructure will play in genuinely levelling up left-behind places. We need a new fund that matches the scale and ambition of Futurebuilders for the Covid-19 recovery – one that is targeted, patient and flexible. This is the time to be channelling investment into community anchors that sustain social infrastructure, strengthening the social economy at scale, and generating social and financial returns in the process.
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