The UK banking sector is orientated to global markets rather than local investment and economic development. Over recent years, we’ve seen a stagnation of lending to small business and the closing of many local branches, reducing the connection between lenders and their local communities. Access to credit is the life blood of many small businesses without which they struggle to operate and compete with larger firms to provide goods and services.
Community wealth building seeks to increase flows of investment within local economies. It does this by harnessing the wealth that exists locally, rather than by seeking to attract national or international capital. For example, local authority pension funds are encouraged to redirect investment from global markets to local schemes. Mutually owned banks are supported to grow, and regional banking charged with enabling local economic development are established.
All of these are ideally placed to channel investment to local communities while still delivering a steady financial return for investors.