As communities across England face a recession, rising costs of living and continued pressure on public services, new research shows how community businesses are plugging the gap in local support. 

A new report from Power to Change shows that the vibrant community business sector is made up of approximately 11,000 businesses, and has an income of around £1 billion per year – strengthening local communities. Through community business, local people are taking ownership over the spaces and places that matter to them and delivering vital services that communities need. Yet the report reveals that:

• Those offering public-facing support were nearly twice as likely to report increasing demand for support with the cost of living
• 77% of community businesses had reported an increased demand for support related to the costs of food, and 79% for support related to increase in the costs of energy.
• 45% of community businesses reported they had employed someone who had no previous paid employment in the last 12 months, who are furthest from the labour market.

In their size, structure, services, and staffing, community businesses are as diverse as the communities they were established by and support. They are run and led by local people with knowledge or experience of the kind of economic and social challenges faced by many in the communities they support. And community businesses use a variety of legal structures and governance approaches to ensure they are accountable to the people they serve. Half those surveyed are either community interest companies (25%) or charities limited by guarantee (24%).

In order to better serve the wider community, we’ve really had to develop as a business to generate income. We’ve built revenue that can then further support community events and activities.
…All those activities go towards the wellbeing of the people in the community and our business model is fundamentally about providing a venue that benefits the entire community’s wellbeing

As we know from our Space Invaders projects, Community businesses improve the physical fabric of places and the services available to the communities that live there. As locally-rooted organisations, their physical presence on high streets and in buildings brings local people together. They are at the forefront of community-led regeneration through providing infrastructure and facilities.

Despite typically resilient business models that mix trading with grants, income from both sources has fallen and sector finances are fragile. In the current economic climate, community businesses face the same operational pressures as private sector businesses, but also have a responsibility to support their local community through hardship. As a result, the current crisis is affecting the confidence of even the most optimistic, and many are anxious about its adverse effects on their business.

The report concludes that with the right type of support, the sector has proven itself resilient to external shocks. Community businesses continue to adapt and be responsive, ensuring their continued sustainability. However, in the light of ongoing and emerging economic and social challenges, the sector needs renewed support to fully realise its considerable potential.

Read the full report at: https://www.powertochange.org.uk/market-reports/market-report-2022/