The past few years have been tough for the Saffron Lane Neighbourhood Council, a community group that provides a range of support services on the Saffron Lane estate in Leicester. Six years ago, it had an income of £500,000 a year and employed 20 staff; but, as statutory funding has run dry, its income has fallen to £180,000 a year and it now employs only five staff.
The fundamental shift in the funding environment for community groups has led the SLNC, which has been supporting residents of one of Leicester's most deprived estates for almost 40 years, to move into social housing. It plans to create what it calls "Europe's biggest eco-home project" by building 68 homes on a currently neglected piece of land.
Neil Hodgkin, head of development at the charity, says: "The real money in poor areas is in the housing. If someone who has a community centre asks if we'd like to have it, I say no. They are monstrosities to manage. The assets in a community are land and its existing housing stock."
Under the agreement, Leicester City Council will sell the land to the SLNC for £1 on condition that it builds social housing. Construction will start next January and is scheduled for completion in March 2016. The project will cost about £10.9m, of which the SLNC has raised about £2.4m through the government's Community Right to Build programme. The rest of the money will come from the registered social housing providers who will oversee the construction and manage the housing. Homes with between one and four bedrooms will be built on the site. Hodgkin says: "There's a shortage of particular kinds of housing because of the bedroom tax, which means people want to move out of bigger properties but stay in the area."
A total of 13.5 acres of land will be redeveloped, of which about four will be used for building homes; the rest will be used for a community food-growing project. Hodgkin says: "It will be a green site and the houses will be cheap to heat. Wild fruit and vegetables will be grown and people will be encouraged to come in and take any food they need."
Despite the sums of money involved, the housing development will not generate a large financial return for the SLNC because, as the landowner, it will receive only ground rent. But Hodgkin says that will be enough for a worker's salary for the next 125 years.
He says: "The beauty of the new money is that the post won't be tied to a particular funder and the worker will have to justify their role only to the board."
The SLNC's ambitions don't stop there. Last year, it started selling to the Central England Co-operative the jams and preserves made by the young adults with learning disabilities who use its services. The first 750 jars sold out almost immediately and the supermarket chain agreed to purchase a further 8,000. Now the community project is planning to turn a disused community centre into a jam-making factory, potentially supplying Co-operative stores nationwide.
The factory would need to produce at least 100,000 jars a year to be self-sustaining, but the project is considering producing up to 300,000 jars a year. This would bring a substantial return, which it could use to support its other community work.
Hodgkin adds, however, that the move raises moral dilemmas for the SLNC. "If we start making 200,000 jars a year, that's when we start making real money," he says. "But that's when it starts changing what community groups are all about."