Community business sector 'expanding faster than charity or small business zones'

A report commissioned by the trust Power to Change says the number of community businesses has increased by 5 per cent in 2016, compared with 1 per cent for charities and 2.3 per cent for small businesses

Community businesses: sector growing
Community businesses: sector growing

The community business sector in England is growing faster than the charity or small business sectors, says a new report commissioned by the independent trust Power to Change.

According to the report The Community Business Market in 2016, which was produced by the not-for-profit consultancy Social Finance UK, the number of community businesses – organisations run for and reinvesting funds into the local area – in England increased by 5 per cent to 7,085.

This compares with 1 per cent growth in the number of charities and a 2.3 per cent increase in the number of small businesses in the same period.

There has also been substantial growth in the number of some types of community businesses since summer 2015. For example, 300 libraries are now run as community businesses, a 20 per cent increase on the previous year.

There has also been a 10 per cent year-on-year growth in the number of sports and leisure facilities run as community businesses – there are now 1,100 in England – a 3 per cent rise in the number of community shops to 330 and a 14 per cent increase in the number of pubs run as community businesses to 40, the report says.

Community businesses have combined assets of approximately £2.1bn and a combined income of more than £1bn, the report says.

It adds that 36,000 staff and 200,000 volunteers work for community businesses.

Adam Swersky, associate director of Social Finance UK, said: "The community business market has shown remarkable resilience in the face of declining public spending, challenging business models and policy changes. Over the past year, despite these trends, we found that the market grew overall. Over three years, not a single market sector has shown signs of decline.

"This is a testament to the ability of community businesses to diversify their income, flexibly adjust to market conditions and draw on the unique resources and talents of the communities they serve."

Richard Harries, director of the research institute at Power to Change, said the community business model represented a sea change in the way local communities were planning for the future.

"Communities are worried about the future of their public services and high streets, but these figures show that local people are also taking solutions into their own hands," he said.

"Thousands of much-loved buildings and services would have disappeared if community businesses hadn’t stepped in."

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