Developing and growing small enterprises, community organisations, co-operatives and municipal ownership is important because they are more financially generative for the local economy – locking wealth in place.
The UK is the fifth most unequal country in the world, according to the OECD. Financial wealth is held by a small minority, 44% of the UK’s wealth owned by just 10% of the population. At a local level, this means that the wealth generated by workers, local people, communities, local enterprise and business in our towns and cities does not flow back to them, but instead is extracted by distant shareholders as profits and dividends.
Locally owned and socially minded enterprises are more likely to employ, buy and invest locally. For this reason, community wealth building seeks to promote locally owned and socially minded enterprises by promoting various models of enterprise ownership that enable wealth created by users, workers and local communities to be held by them, rather than flowing out as profits to shareholders. These include:
A key mechanism for developing these enterprises is through a more progressive approach to business support. Recent years have seen increased activity in this area at local authorities and combined authority level.
For example, Islington Council have commissioned a social enterprise business support hub and a co-operative development agency to grow enterprises in foundational sectors such as social care and childcare. In Greater Manchester, the Combined Authority are hoping to establish a community wealth hub to support and grow co-operative, mutual, social and community enterprises in key sectors of the everyday economy. Meanwhile, in the Liverpool City Region, the mayor has supported the work of Kindred to grow the impact of the social economy by supporting investment in socially-trading organisations and, in Sheffield, a partnership with Co-Operatives UK and the Employee Ownership Association on The Ownership Hub is designed to grow worker ownership in the City Region.