Levelling up: The role of charities and volunteering

We believe the government’s levelling up agenda needs to meet the following outcomes to be successful.

• Broadening the scope of levelling up: A broad range of social and economic outcomes need to be met for levelling up to be successful. This goes beyond capital investment and physical infrastructure.
• Recognising the role of civil society and charities: Recognising that civil society has a unique contribution that is fundamental to tackling economic and social challenges.
• Levelling up civil society: Strengthening civil society and charities as well as building social capital as part of levelling up.
• Empowering communities: Giving communities the support and opportunities to define and solve problems locally, through priority setting and spending decisions.
• Building long-term partnerships: Using funding to build long-term place-based partnerships between businesses, local government, charities and communities.

Our recommendations focus on three areas.

• Increasing local government funding
• Redesigning existing funds
• Investing in social infrastructure

Recommendations developed with other infrastructure bodies are noted in brackets.

The government needs to increase core local government funding to support levelling up. The reduction in local authority funding has disproportionately affected deprived areas,^[1] with local authority chiefs expecting to cut services in the future.^[2] Underfunding of services has led to poor experience and unmet need. Cuts to preventative, universal services and increasingly tight eligibility criteria leave many without the support they need.

Charities and community groups have worked to fill the gap between what is needed and what is available, but often without the funding, capacity and infrastructure needed. This is particularly challenging in areas hit hard by local government funding cuts that also don’t have a strong civil society. Funding local government would improve the quality and availability of services that reduce inequality. It would also maximise the role local councils can play in boosting local economies.

We believe an increase in core local government funding should be long term. It should be allocated transparently and take into account local needs. Funding should be redistributed so those facing the greatest disadvantage, and with least ability to raise income locally, have sufficient funding for effective services. Fiscal devolution to local authorities is needed but shouldn’t replace core grants.

We think existing funds could be redesigned to improve outcomes for communities and allow charities and community groups to play a greater role in levelling up.

The three funds announced by the chancellor in the March 2021 budget (the Levelling Up Fund, the UK Community Renewal Fund, and the Community Ownership Fund) are worth £5.17bn. Analysis estimates that up to £4.48bn – 87% of the funding – is likely to go on physical ‘hard’ infrastructure.^[3]

We believe these funds should be redesigned to prioritise spending on social infrastructure. In particular, we would like to see the Levelling Up Fund be redesigned to focus more on social infrastructure and support collaboration with charities to achieve levelling up.

The government’s investment in the UK Shared Prosperity Fund (UKSPF) provides a significant opportunity to support the levelling up agenda.

• We think the fund should be led through partnerships that develop community-driven solutions. It should build social cohesion and opportunities for people on the margins of society.
• The UKSPF should reflect the design principles set out by the working group convened by NCVO and the Employment Related Services Association.^[4] The funding frameworks should be designed and distributed in a way that promotes equity and equality.
• There should be transparency and accountability in the system, and funding should be accessible to local specialist organisations.
• It is vital that the government learns the lessons from the Community Renewal Fund before implementing the UKSPF.

The Community Ownership Fund is a great opportunity to protect places and spaces, build community capacity and wellbeing, and improve local economies.

• The fund’s design should be reformed to make it accessible to organisations and groups in deprived communities that would benefit most from the fund.
• The onerous requirements to find new match funding is a barrier to organisations in less affluent areas.
• The short and unrealistic timescales to bid are also challenges for organisations that lack capacity or don’t yet have an eligible project.
• More support should be in place to help organisations in deprived areas benefit from the fund. If designed well, this fund could provide an anchor to bring in external funds to build a £1bn investment plan over five years.

Investing in social infrastructure is vital. These are the spaces, places and activities that bring people together and help us to build social capital. Social infrastructure creates economic, social and civic value.

We believe the government should develop a social infrastructure strategy in partnership with civil society as a part of the levelling up agenda. This strategy should include how to identify and map social infrastructure and how to best fund it. This strategy should explore new ideas to fund social infrastructure, such as a levy on physical infrastructure projects to be invested locally.

The government should set up a Community Wealth Fund through an endowment from the next release of funds from dormant assets (or from alternative sources).^[5] This would specifically target the most deprived areas and fund community-led social infrastructure priorities, helping to close some of the disparities at the heart of the levelling up agenda.

The proposal for a Community Wealth Fund, advocated by Local Trust and 400 civil society organisations, would provide long-term funding (10-15 years) with hyper-local-level investment, led by the community. This is power and money in the hands of local communities. It is vital that dormant assets are used to support communities, whether through a Community Wealth Fund or another mechanism.

We believe the government should explore ways to unlock funding to support communities, including using funds from dormant charities (having had no income or expenditure in the past five years) or enhancing local philanthropy and match funding. Match funding for projects and programmes is a proven way of generating funds and galvanising fundraising and giving.

The government has supported match-funding initiatives, such as the £37m provided to match individual donations (pound for pound) raised through the BBC Big Night In fundraising event held on 23 April 2020. Match-funding programmes can leverage funds from private individuals, companies and grant funders to deliver initiatives and programmes.

The government should ensure that match funding is made available for all communities and places, to galvanise local fundraising efforts. Communities could use public investment to leverage match funding and crowdfunding to stimulate giving for citizens and philanthropists, as well as foundation and private-sector funding.

To support the levelling up agenda, section 1 of the Equality Act should be enacted. Section 1 creates a public sector duty to regard socio-economic inequalities. This duty would encourage central and local government to think about how to reduce inequality when making decisions. We think this would support the government to ensure policy decisions tackle inequality.

It would also help strengthen the Public Sector Equality Duty. Used well, the Public Sector Equality Duty ensures that decision makers focus on how they can best address these inequality challenges from the outset: advancing equality becomes a driver of decision making, not an afterthought. We think these reforms would help to tackle some of the systemic drivers of inequality.

Communities should have greater powers and funding to protect the amenities and services they value most, and to plan for how local buildings and spaces can be maximised for local wellbeing. A Community Right to Own^[6] would support communities to reclaim valued local assets and amenities that are in decline and under threat.^[7] This would maximise the impact of community organisations. This is particularly important in deprived areas.

Unlike the current Community Right to Bid, a Community Right to Own would give communities first right of refusal to purchase Assets of Community Value (ACV) that come to market. It would provide a 12-month period, once an ACV comes to market, for communities to mobilise, and secure the funding and local support they require to purchase the asset.

The government should support this by expanding the existing ACV legislation to cover other local amenities and services – not just physical assets. Building on the Scottish model of community ownership, the Community Right to Own should provide communities with a genuine route to force the sale of neglected assets, if there is a powerful case for community wellbeing and sustainable development.