Last week’s news of 25,000 jobs at risk after Debenhams and Arcadia Group fell into administration caused a collective gasp. Along with heartbreak over the loss of these jobs, many fear for the future existence of our high streets as shop after shop keeps closing.
Locked down at home we have turned to our communities and they have supported us back. Local cafes that stayed open or offered takeaways gave us a bit of normalcy and a chance to talk with another human being. Restaurants that provided free or cheap meals to those in need, businesses which raised funds for the NHS or donated their stocks of PPE to frontline health workers. Our communities were there for us during lockdown so doesn’t it make sense that they should be where the recovery begins?
‘Levelling up’ communities across the country is clearly key to our recovery, yet in practice how do we get from what politicians say on a national stage to what’s possible locally? There are three vital steps.
First, start with community assets: social enterprises which trade for purpose, charities, and the non-profit sector. They play essential parts in the social fabric of our communities – food banks, homeless shelters, domestic violence support – that pick up and empower our most vulnerable. There’s a perception that social enterprises, charities and the non-profit sector serve a niche part of the market – that’s true and it’s a critical niche. The underserved pockets of our society are growing because of Covid-19 and there are specialist experts out there who know exactly how to lift people up.
My organisation represents a network of social enterprise lenders that lend responsibly to businesses and people locked out of the mainstream. They’ve been bombarded by demand. We’ve created and protected over 7,000 jobs in the past 9 months. We’ve helped thousands of people remain financially stable through finance and advice. That’s a start and is offsetting the impact of the job losses we keep hearing about. But clearly more is needed to scale up this and the other excellent work being done on the economic frontline.
Next, bring in the private sector. Social enterprises and non-profits do great work but without access to funding and distribution they stay small. We need big answers to these big economic challenges, and non-profits can take the risk to prove what works for the private sector. We have seen companies providing free meals through food banks and supermarkets stocking new products produced by social enterprises. There is a strong case aligning with businesses’ commitment to ESG (Environmental, Social and Governance standards), and let’s not overlook the potential market this opens up for the private sector. Looking at the non-profit finance sector again, scaling it up to make millions of businesses and people who have become financially distressed bankable again – that’s a win for everyone.
Finally, government: catalyse the change. Incentives, brokering, policy, regulation: it’s a way of bringing the community and private sector together to make the partnership wheel turn. A part government-funded lending scheme, the RF Fund*, leveraged in bank investment and unlocked almost £100 million of funding to communities by non-profit lenders in the wake of the 2008 financial crisis. It supported almost 12,000 jobs. These are concrete results of what public-private-non-profit partnerships can enable our communities to achieve.
The loss of 25,000 jobs and counting hurts and will hurt for some time. There’s a pathway for our communities to transform this hurt, by scaling what we know works so that the patchwork of support becomes a whole quilt of support. I’ve made it sound easy; it’s actually really hard. But let’s do the work together to make our communities stronger; even after Covid-19 ends we will all want to stay close to them.
*RF Fund info: https://responsiblefinance.org.uk/2020/08/turning-30m-into-89m-for-under-served-businesses-cdfis-can-help-build-back-better/