The extent to which new funding announced in the 2020 Spending Review ends up boosting co-op development, largely depends on how much freedom local leaders and communities will have to direct resources that way. And this remains somewhat unclear.
Levelling Up Fund
The £4 billion Levelling Up Fund could provide fresh opportunities for co-ops in areas like community infrastructure and arts and culture.
The government will publish a prospectus for the fund and launch the first round of competitions in the New Year. Between now and then there are some big questions to answer:
Who in local areas will actually be bidding for this money? Who will have the agency and power here?
Will the focus on “growth” and “regeneration” outcomes encompass social value, community wealth building and inclusive economic development?
Will there be opportunities to combine the Levelling Up Fund with communities’ own financial and social capital, through Community Shares for example?
UK Shared Prosperity Fund
The long awaited outline of the UK Shared Prosperity Fund (UKSPF) that's been provided leaves some critical questions unanswered:
- Who will control these funds locally?
- How much freedom will local leaders and communities have to use the UKSPF for things like co-op development?
One potentially very positive change in the UKSPF from EU structural funds, is a much clearer focus on investment in communities, including specifically community-owned assets. Here the UKSPF should combine with community shares and our institutional match investment model.
Communities in Charge
The Spending Review includes just over £1billion for business support (on top of the UKSPF). This includes:
- £557.5 million for the British Business Bank to help finance start-ups and growing businesses
- £490 million for Innovate UK
- £50.7 million for SME productivity focused on leadership, management and technology adoption
Co-ops have distinct business support and financing needs that are rarely met through these channels.
Government should take action to ensure that, at a minimum, the co-op sector benefits from business support spending in proportion to its size. So, at least 1 per cent of the above business support funding should be used by the delivery agencies to develop support that meets the distinct needs of co-ops. This would equate to £10.9 million being spend in co-op development from this Spending Review.
Local leaders and delivery agencies need the freedom and encouragement to resource co-op development, where they find there is a case for doing so.
Government has announced new money for unemployment support, including:
- £2.9 billion over three years for a 'Restart' programme, which will provide intensive and tailored support people who have been unemployed for a year or more
- £1.4 billion to increase capacity in Job Centre Plus and double the number of work coaches
There is nothing explicit here about entrepreneurship being an option in employment support. But given the likely scale of job losses and business closures in 2021, it should be. And crucially, where unemployed people receive advice and support on entrepreneurship, this should include useful information and signposting on their co-operative options.
Using our data on the resilience and job creation power of worker co-ops, we model that if just 5 percent of New Enterprise Allowance participants were supported to start worker co-ops now, this could reasonably result in 15 per cent to 25 per cent more jobs in five years’ time. And not just any jobs - decent, empowering, wellbeing-enhancing livelihoods.