Following the publication of Danny Kruger's report on civil society and levelling up communities, our Policy Lead Will Thomson shares some thoughts on what this means for our work and the wider social investment landscape.
On Thursday, Danny Kruger published his long-awaited report into civil society – Levelling Up Our Communities. In it, Kruger set out his proposals for a new social covenant – what he defines as ‘the mutual commitment by citizens, civil society and the state to fulfil discrete responsibilities and to work together for common good’ – along with a set of proposals on how to achieve this.
The report covers a wide range of topics, including social value in public procurement, community empowerment, and the importance of social infrastructure. While there were plenty of recommendations to comb through in the report, three areas stand out in particular that align closely with our current work.
1. Better use of data
Kruger emphasises the importance of enabling better measurement of civil society action and value. Getting good data from Government is part of this, and he recommends a cross-government data architecture and suggests a goal of publishing all Government grants to the 360Giving open data standard by the end of 2020. He shares the same ambition for civil society – recommending that organisations benefitting from public funding or tax relief should publish coherent and comparable data on their activities and outcomes.
This chimes with much of the work already achieved through the Social Economy Data Lab – working collaboratively with partners to share data and analyses and supporting the informed use of data across sector partnerships. At SIB, we’re integrating a more robust and transparent data approach into our core business – from cleaning, scraping and analysing historic loan data to improve our understanding of how social investment works, to applying useful and useable data standards that support much more transparent accountability of our work in grant making and social investment.
We’ve recently published open dashboards on the Resilience and Recovery Loan Fund to provide real time insight into the work that we do and the decisions we make about the allocation of funding. During the last few months we have also made significant progress in integrating data-led analysis into our grants programmes to encourage fairer and more rigorous decision-making, and we are looking to build this into loan funds in the future. Our overall ambition is to make principled use of data and information the foundation for providing finance to create fairer communities, and we welcome the opportunity to work with Government to advance this work.
2. Community ownership
Place-based approaches are increasingly being put forward by the Government – through the wider levelling up agenda, and with specific funding streams like the Towns Fund. Kruger wants to take this further by legislating for a new Community Power Act which strengthens the rights of people to challenge responsibility for the delivery of public services; and introducing Community Improvement Districts as places to test new models of local, community-led social and economic policy. In addition, a strengthened Community Right to Buy would give communities first right of refusal on a public asset reaching the market.
We are supportive of assets being transferred into community hands, and we have previously called for a strengthened Community Right to Buy to facilitate this process. From our experience, community organisations generally need ongoing help to build their capacity and resilience in managing and maintaining these assets. Appropriate funding and strategic business support must therefore be delivered alongside any legislation aimed at expanding community ownership.
More eye catching was the recommendation on bringing forward the promised Community Ownership Fund – which Kruger suggests could buy buildings and land owned by community businesses (or SMEs and local family businesses) that are at-risk in this crisis, and hold them until the previous owner or a new community owner can take them over.
We’ve made a similar recommendation for regional Public Holding Companies in our recent Covid-19 & Coastal Communities policy paper. However, we think holding companies could be more ambitious – they could support the transition of at-risk SMEs to shared ownership models which have the potential to transform employment by paying higher wages, increasing workforce solidarity and providing a richer set of benefits to employees. This is all the more important given the looming unemployment crisis precipitated by Covid-19.
3. Funding the social economy
Two new funds are recommended in the report: £500 million of emergency funding under the Community Recovery Fund, to build on the £750 million already allocated to the social sector by DCMS. The second, more substantial Levelling Up Communities Fund would be endowed with £2 billion from dormant accounts. Kruger suggests that this money could be used to support social investment – by expanding blended finance models and experimenting with outcomes contracts – and recommends that some of it could be disbursed through regional social investment funds.
The recognition of the value of blended finance is welcome. Findings from the Futurebuilders learning project highlight how social investment can make good use of subsidy to enable the social economy to grow, stabilise and employ more people in the poorest parts of the country. Futurebuilders did this successfully, cheaply, quickly and with minimal complexity; this makes blending a more attractive approach for a Covid-19 recovery period than the special purpose vehicles of many payment by results contracts, and one more amenable to smaller scale regional funds.
Our more recent experience of running the Resilience and Recovery Loan Fund, a dedicated CBILS social investment fund, has shown how other forms of incentive can also be used to support organisations taking on social investment. Rishi Sunak’s announcement yesterday an extension of the CBILS guarantee is an important acknowledgement of the role that this form of subsidy can play in supporting the economy through the recovery. We would strongly advocate Government also thinks about an extended continuation to CBILS or sets up an alternative guarantee scheme – perhaps one more targeted by location or to usage by the social economy.
It is positive to see such a wide array of recommendations to strengthen civil society. Covid-19 offers a chance to use policy to support fairer, more inclusive communities underpinned by a strong social economy. It now remains to be seen how much of this will be matched by commitment from the Treasury and No. 10 to seeing these suggestions through.