Investing in Localism

  • 29th Jul 2022

How Local Authorities Can Provide Good Finance For Community Business

In straitened times shouldn’t we expect more authorities to use their balance sheets, borrowing powers and expertise to invest in services run for and owned by local communities; and to help to grow more inclusive local economies?

Councils that invest in community businesses help to provide public goods – supported and social housing, green v, community spaces and leisure facilities. As the case studies in this report illustrate, these investments can achieve significant social, economic and environmental benefits for local communities. Not only that, local authorities can shape and grow markets in public goods in partnership with community businesses, social enterprises and charities, and most importantly their residents. In doing so, they are building sustainable enterprises that support the vulnerable and disadvantaged, deliver on stated policy objectives, or simply provide valuable public spaces for the community to come together.

In many of the examples in this report, the local authority is playing the role of a social investor, bringing risk capital and expertise aligned to a public mission. These distinctly modern interventions have their roots in the entrepreneurialism that emerged during the co-operative movement of the 1840’s, and the municipalism of the Victorian period often associated with Joseph Chamberlain.

About the authors:

This is a working paper prepared for the Power to Change Research Institute


Pagura, S., Pollock, R., Mussani, S.  June 2018

Social Finance is a not-for-profit organisation that partners with the government, the social sector and the financial community to find better ways of tackling social problems in the UK and beyond. Since it started in 2007, Social Finance has mobilised over £100 million of investment and designed a series of programmes to tackle social challenges. These include support for 2,000 short-sentence offenders released from Peterborough Prison, 380 children on the edge of care in Essex, 4,500 young people at risk of becoming NEET, 3,000 isolated older people, 2,500 people with severe mental health issues, and 1,400 homeless youth and rough sleepers.