Social enterprise: Talking about Regeneration

Neighbourhood empowerment is a hot topic, with communities encouraged to buy their own buildings to provide a focus for enterprise and activity. Gareth Potts and Glenn Jenkins make the case for the so-called 'regeneration hubs'.

This year has seen much lively discussion about the empowerment of neighbourhoods, evidence of which can be seen in the Young Foundation's Transforming Neighbourhoods programme and the Home Office-led Community Ownership Working Group. Part of the debate has focused on how to increase ownership of assets by community groups.

With a local government white paper due in early November, now is the time to outline why and how more public services - and the buildings in which they are based - should follow the community-owned route. Nowhere is this more important and appropriate than in disadvantaged areas, where unemployment is higher and services poorer.

The Young Foundation defines neighbourhood hubs as "multi-use buildings that may bring together public services with community space and business" and can "help to provide a focus for neighbourhood interaction". We've given this a twist by using the term 'regeneration hub' to stress how this arrangement can serve not just as the focal point for interaction, but also as a stimulus to wider community revival.

Model farm

Marsh Farm in Luton is home to one of the authors of this article. It provides a coherent philosophy for the desirability of hubs and offers the practical means to help realise them. From the outset, the aim was to dedicate at least a third of the space to sustainable community enterprises, run by and employing local people.

Another third was to be occupied by 'safe bet' public sector tenants, such as the local further education college's bricklaying school. With these low-risk tenants covering the running costs, the remaining space could be rented out to support voluntary and community activity.

Marsh Farm is one of 39 New Deal for Communities (NDC) areas. In early 2003, the local Community Development Trust used £4.4m of NDC funding to buy a former electronics factory for use as the Community Enterprise and Resource Centre, which is now overseen by a board composed equally of local residents and service providers. The trust has recently taken over the management of the property from Luton Council, and a group of local residents makes recommendations about the allocation of space. Rent-paying tenants range from public sector clients such as Sure Start to small businesses such as Bootyfit, a local jewellery and fashion firm.

The building was purchased with the vision that one day it would house a host of community enterprises: an environmental taskforce, community transport vehicles, a builders' yard for a construction and repair company (Community Builders), a social club, childcare, refuse collection and disposal, neighbourhood wardens, gyms and school meal providers. Housing, youth and social services could be added later.

There are many benefits of having services delivered by local residents.

Staff know service users and can relate to them as individuals. Environmental teams can double as informal neighbourhood wardens because it's their community and their neighbours. Local knowledge is important too. As Tony McGann, chairman of Liverpool's Eldonian Community-Based Housing Association, explains: "Communities are best placed to deliver quality local services because they know what is needed as users themselves." And because it is their neighbours who are delivering the services, residents should be more aware of what is available and know how to make a complaint - or pay a compliment.

There are also gains for the social fabric and the economy. Friendship and mutual aid networks are likely to be stronger, and the circulation of wages to local shops, pubs and social clubs greater. Disadvantaged areas, in particular, stand to gain. A 2005 report from the New Economics Foundation noted that, if just 10 per cent of annual national public service delivery spending were redirected to services delivered locally by local people, 15 times the total annual regeneration spend would go into those communities.

The key task would be to ensure that natural wastage minimised the impact of job losses among council employees who either did not live in disadvantaged areas or who, if they did, had jobs no longer deemed necessary. It's hoped that administrative positions at Marsh Farm can be streamlined so more local people can be employed in delivery.

Decision-taking at a local level brings other bonuses. For example, rubbish collectors pick up what has been left, not just what's been put in regulation bins. This makes sense to small-scale operations; bigger outfits would have to take a stipulated number and type of bins.

In theory, local benefits could be achieved by encouraging councils to work harder to recruit locally and decentralise administration to neighbourhood levels. But how far will local authorities and other statutory agencies go? And do added benefits come from services being provided by community enterprises rather than councils?

The way in which enterprises are generated and run is at the heart of these added benefits. Marsh Farm Community Development Trust is to pilot an approach to generating local community enterprises, the Organisation Workshop, which has operated with success in the developing world.

In an OW, groups of interested residents undergo an intensive two-month enterprise development period during which they can form social enterprises meeting local needs. All participants join one large body, the Participants Enterprise, which spawns community interest companies and which could, in time, become the post-NDC vehicle to replace Marsh Farm Trust.

Crucially, participants learn to organise their time, materials and economic affairs by delivering real publicly funded services (with specialist service-provider mentors, who are on hand to assist where required). This creates entrepreneurial literacy and organisational consciousness within the community, improving its ability to manage and deliver services and, it is hoped, ending its dependency on external agents. Council links are not severed, just changed - the council retains responsibility for ensuring that community enterprises provide quality services.

After the OW stage, membership of the newly formed Participants Enterprise will be open to all local residents, with a board of directors probably containing worker and elected resident members and, where services were provided under contract to statutory organisations, representatives from these too. Accountability and ownership would come from an AGM and regular forums. This offers the possibility of real community cohesion and active citizenship, something devolved local authority services line-managed from the town hall cannot deliver to the same extent.

The value of owning hub buildings is stressed by Dr Dick Atkinson, a central figure in the success of the much-praised Balsall Heath Forum in Birmingham, who notes how "ownership generates pride and care". But why should ownership be at neighbourhood rather than local authority level?

After all, the local authority is owned by the community in the sense that it is funded by taxation and overseen by elected representatives.

First, the sense of ownership is much more local and direct at neighbourhood level, in contrast with decisions made by more remote council staff and committees. Second, community cohesion should improve through local people working together actively to acquire and manage a project.

It's also about money, though more about the greater financial empowerment that comes with ownership than just, as some debates imply, a steady stream of cash. Ownership of a solid and in-demand asset affords the flexibility to use it as security on private bank loans - active management again.

A stream of rental income earned from community enterprises and buildings is also more empowering than an uncertain supply of grant income from external charities.

Sense of ownership

Twenty years ago, a group of local women sought funds to help build the centre that now houses the Ashton Community Trust in Belfast's deprived New Lodge area. They knocked on doors and asked for £35 in weekly instalments.

In return, donors received a share, tied to their property but saleable with it. This enables them to vote at the AGM and stand for the board.

As chief executive Paul Roberts explains: "As many as 720 people bought in, out of a population, kids included, of 7,000. We've had no break-ins. People feel part of something. It's not like in an 'official' building."

Ownership models could go further still. A financially successful hub might buy a share for all households. Elsewhere, there might be a chance to buy shares in kind - for example, by applying a few licks of paint to the building. Shares could also yield a small annual dividend. In areas with poor or no buildings, a sense of ownership could be increased by having residents lead the building design and by employing community builders for construction.

Not everything can be done at the neighbourhood level. Opportunities for local authority-wide activity remain, including bulk buying and a regulatory role to prevent wide disparities in service quality. The council would still own expensive equipment, such as dustcarts, that a community refuse enterprise would need to use only once a week. Similarly, a shared services organisation, with community representation, could take care of the technical aspects of building maintenance and operation.

The white paper should help ensure that neighbourhoods hoping to realise such energetic and regenerative hubs are able to do so. They need to be identified and networked to boost mutual support and the exchange of knowledge.

This will help reduce the number of regeneration areas that don't share this vision. It's an ambitious approach, but ambitious approaches should be the order of the day in areas with persistently high unemployment and poor services.

Gareth Potts is director of research and policy at the British Urban Regeneration Association (gareth@bura.org.uk). Glenn Jenkins is a member of Marsh Farm Outreach, a community interest company at Marsh Farm, Luton (glennjenkins2000@yahoo.co.uk).

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