Category Archives: Community Economics

Cornershop revisionism – philosophy refreshed…

The Pop-up Shop has been getting a lot of press recently.

Did it ever go away? Is a revision to enterprise philosophy under way? Asset management, both in the public and private sector is in flux. With revisionist thinking on collaboration and about public space utility and development?

We think there is this paradigm shift, which can energise the social finance market. It will temper developments in the public space. This affects political mission, private capital movements and community outcome.

We offer as evidence the three reports/ideas formulated by a diversity of organisations below. As crisp in their thinking as they are diverse. They are telling onlookers to change, at an opportune moment for our sector.

The Pop-Up Shop:

See more modern retailing here...
Hogarth imagines the pop-up shop?

Reading mainstream articles about this newly energised movement, we enjoyed revisiting the web site of www.appearhere.co.uk . We see it as a metaphor for a new retailing in the UK.

We are a world away from the ’empty space’ temporary retail proposition of old.

Gone are bare spaces, filled with less than high quality merchandise on a seasonal pressure sale basis. In comes a range of artisan producers, innovatory publishers and craft manufacturers. All intent on capitalising on short term, premium retail spaces. It should stir the imagination?

The Appear Here concept achieves a number of aims for the burgeoning retailer. Firstly, you can use the site to scope spaces across the UK, and will be able to view more in the future. You can also see, upfront, the cost of occupying the space over your chosen period.

If you are a community enterprise just at the planning stage this is important. Not being retail property specialists, but with a passion for your community manufactury, then knowing what the costs are likely to be, with support of the Appear Here team, could be a deal clincher for your project.

We haven’t fully explored the booking conditions from the site yet, and cannot see other start-up costs like majority deposits that may be needed, but overall the presentation makes a telling offer for the 21st Century.   internetIconMini  Check out Appear Here today.

We also liked and applaud The Plunkett Fondation’s attempts to vivify the community shop. They have recently published a new report Community Shops 2014 – A Better Form of Business.

Better shops, better communities...
Better shops, better communities…

The Foundation’s main focus is on rural development. As with the initiative above, retailing and the opportunities it offers, are good in inner-city areas too.

These include the principles of stock management, employment, volunteering, managing cash-flow and more.

The mixture of skills and commitment adds human capital, not only to the shop, but also the community if done right.

Icon for Adobe PDF  Download a copy of the Plunkett Foundation Report for 2014 here…

What can be gleaned for the Plunkett report is how a local shop can be a driver for community cohesion, a broad, beneficial identity and, because it is community owned, a wider sense of community ownership of place is also generated. Who cannot be proud of the area the shop they own exists within?

 Socially Productive Places:

Yesterday The Royal Society for the Arts (RSA), in collaboration with British Land, published a new report about an emergent model to add value to public spaces by utilising a new admixture of co-operation and skills shared amongst local authority planners, developers, community groups and politicians.

New ideas in regeneration...
New ideas in regeneration…

We were excited by the report, which contains recommendations for how private developers and public sector players can innovate and collaborate in new ways to get the maximum value from public spaces, whilst at the same time adding value to built assets.

At the heart of the report is a lack of fear about profitability. But with a sense of urgency and innovation about how the public domain renovates and rebuilds from now on.

The report tells us what should not done. As well as illustrating the new skills needed by key players in the development sector. It is a cogent and telling argument.

Icon for Adobe PDF   Download a full copy of the research paper here…

It’s a timely report and you can read a short review, and find links to the conference that inspired the research, on conversationsEAST, the East of England Fellowship journal supporting the work of the RSA.

Mass Collaboration:

The Institute of Public Policy Research (IPPR), is a centre-left think tank. It recently published a paper called Mass Collaboration.

Within the context of this brief article, the IPPR piece binds together some of the ideas expressed above. Taking a meta-narrative view of policy and practice.

To see how to achieve change in the public arena. Moving to mass engagement within the socio-political structures that frame our society.

Working together in a new way...
Working together in a new way…

The paper, authored by Matthew Pike, a serial social entrepreneur. He has connections to Unltd, Big Society Capital and the Social Investment Business.

Matthew is the founder of www.resultsmark.org, a free reporting system for public services. Always worth checking out!

Icon for Adobe PDF   Download a copy of the report here…

The Pike thesis for change, that will will channel mass collaboration, is based upon five key principles. We give them below.

  1. “Invest in shared institutions that build social capital and engender supportive working relationships across sectors and hierarchies, such as teams of supporters around individuals, community anchor organisations, children’s centres, extended schools and more. Above all, invest in new ‘backbone organisations’ that can mobilise and organise whole-system change across localities.
  2. Understand what help people need in order to help themselves and discover the existing strengths within people and communities, through an immersive programme of listening and learning.
  3. Harness the new power of ‘big social data’ to turn public funding into a real-time process of action learning, understanding as much as possible about activities, outcomes and costs in an area to help design new systems that give people the help they need in a much smarter way.
  4. Provide funding, investment and support to test, grow and scale up what works better in a local context and cut what isn’t needed or is less effective.
  5. Work progressively to use new insight and evidence to help redesign the wider systems, rules and regulations that hamper local achievement”.

The five could apply to the social finance sector, and the players operating in it. Innovation, change, consultation, system and process review, engagement with communities of interest. All are all defining characteristics of the Social Finance sector.

The thematic glue to them, for us in the sector, is money. It’s accrual, its management and its dispensation. The Pikeian motif can layer upon the RSA paper, as well as across the innovatory approach of The Plunkett Foundation. In essence, we should talk to each other and ‘do things different’.

A heady time to be in the vanguard of a new movement?

Ethical business with a social dimension...
Ethical business with a social dimension…

Social Finance – a breakfast revelatory…

Investment socially focused...
Investment socially focused…

To the Galleries of Justice in Nottingham this morning, 17th July 2014, for a massive double espresso shot of Social Finance. Two hours of concise advice, proven experience and excitement for a sector under change.

Hosted by our own Roger Moors of SEEM, the assembled audience convened for coffee and muffins at 7.45am, more about the venue at the bottom of this article, all looking forward to a series of key speakers on expanding, developing and capitalising on our growing sector, courtesy of Big Society Capital.

Councillor Nick McDonald – Nottingham City Council:

Cllr. McDonald was delighted to announce to the gathered social finance bankers and intermediaries that the City now had a new Nottingham Social Impact Fund. This new source of funding for the enterprising small business comprises a pot of £1 million pounds, which, argued Cllr. McDonald, coupled to a revised City Procurement Policy, would heavily lean the city towards a paradigm shift in its industrial base, as well as building on existing entrepreneurial energies in the city. A new fund is always welcome for the business sector, particularly at very good rates.

internetIconMini  You can discover more about the life and career of Cllr. McDonald here.

Geetha Rabindrakumar – Social Sector Lead, Big Society Capital:

Big Society Capital image
New research, new ideas…

Geetha began by offering the audience a classic definition of social investment, and underscored research that indicates, whilst societal problems will magnify and public sector funding will continue to diminish, it is the social sector, with its thirst for new forms of finance that will drive the sector forward in the next few years.

Underscoring the role of Big Society Capital as a finance wholesaler, Geetha stressed the importance of intermediaries in process, and that BSC will be looking to exhaust its coffers on innovative projects, which give investors their money back, provide a return on that investment and achieve social impact and delivery.

A clear presentation of roles and responsibilities in the sector, now and in the future.

internetIconMini  Discover Big Society Capital on-line here.

Sam Tarff – CEO of the Key Fund:

sinButton2Sam delivered a pacy and detailed analysis of the work of The Key Fund for his audience. Outlining the Fund’s history, but also encouraging intermediaries with the news of the quality of relationships the Fund enjoys, it’s flexibility and pace in moving from application to decision. A refreshing approach in a finance oriented sector, we believe.

The Fund also illustrated how innovative and enterprising communities and individuals can be. Sam offered the audience examples of Fund development clients as diverse as a Therapeutic Comedy Training Academy, a Virtual Human Body for drug testing, community wind farms and and solar photo-voltaic energy installations on community buildings.

The Key Fund deserves it’s key player status as a driver of fiscal energy for projects across the North of England. internetIconMini  Discover The Key Fund on–line here.

Peter Ware – Partner at Browne Jacobson LLP:

Peter gave the assembled audience a very informative over-view of Public Sector Mutual’s development. Organisations that move into the social business sector, ofen with existing customer bases and public sector ethics and philosophy.

Reminding us that the sector could see demand for social finance rise to £500 million by 2015, Peter, nonetheless, did not shy away from some of the issues to be wrangled with in creating Mutuals in a local authority setting.

internetIconMini  If you have clients looking to enter this business environment, discover Peter’s practice, Browne Jacobson on-line here…

Matt Smith – Fund Manager, The Big Lottery:

Matt explained the heavyweight nature of The Big Lottery, and how it was looking to develop agile, relevant and timely funding solutions in the future, particularly to benefit the social finance sector.

Working across three strategic layers the Fund is looking at how demand, intermediaries and the supply side of funding can all be tempered and flexed to respond to the needs of risk capital with a social mission at its centre.

internetIconMini  Find the Big Lottery on-line here…

Richard Nicol – CEO of Midlands Together

Richard gave us a ‘rally cry’ speech, moving across his own initiation into social business, after being a banker for twenty years and finding himself re-tailoring a hotel group in an area of social need.

Raising £3 million pounds, only a year ago, using the social business’s innovative model of housing development, coupled to partnerships in the social enterprise sector to provide training and skills support for ex-offenders.

So successful has Richard’s ministration been that profits are reported, funding need has been reined back, temporarily, and the business is set fair to exceed it’s targets of 15 property renovations undertaken per annum and with 150 clients supported through their training process into employment by the end of this five year bond period.

Midlands Together, using a revision of the ‘Together’ model developed in Bristol, describes its work as property development with a heart. Real asset development, care for people and delivery of profits. We were inspired.

internetIconMini  Find out more about this exciting, innovative development process here…

The Venue?

We had our breakfast convocation at the Galleries of Justice in the Lace Market quarter of Nottingham. In the heart of the city’s creative area, this museum, educational service and charity offers a fascinating series of spaces for events.

We met in the courtroom. You can see from the narrative above, all our star witnesses for the defense of Social Finance were sparkling. The verdict? Guilty of enthusiasm and expectation for the future.

If you would like to explore the venue on-line and make contact with the corporate hospitality team, see more here…

Ethical business with a social dimension...
Ethical business with a social dimension…

Evolve 2014

Evolve 2014, an annual event for the voluntary sector is almost upon us again.

Evovcle 2014, by NCVO - summit for the sector...

The gathering, organised by the NCVO, features a sector Summit, Marketplace and and a variety of Fringe events to occupy and interest everyone across the third sector.

No matter what your role is with, or within, the voluntary sector, there is something at Evolve 2014 that is relevant to you and your organisation. It will help you look to the future, whatever the size, shape and mission of your organisation.
Date: Monday 16 June
Time: 09.30 – 17.30
Location:  internetIconMini  The Brewery and Montcalm Hotel, London

The keynote morning events are delivered by Hilary Benn, Shadow Secretary of State for Communities and Local Government, as well as a session by Dawn Austwick, Chief Executive of The Big Lottery Fund.  internetIconMini See the Summit agenda in detail here.

One of the key Fringe events will be delivered by Neil Berry, Head of Trading, Locality. The session reflects that…

incredibly, the economy of scale argument is still dominant in the Treasury, in government departments, in local councils and health bodies, and across the political spectrum. This is the myth that cutting costs will be achieved by combining public sector procurement into larger and larger contracts, by driving down unit costs through efficiencies of scale.

Local by default image
Local by default?

Locality will be presenting their ideas as to how this dis-economy of scale can be subverted by a new methodology of delivery for the Public Sector. The recommendations are based upon original research by Professor John Seddon and the team at Vanguard Consulting.

Icon for Adobe PDF  Download a copy of this research here (pdf)

internetIconMini  You can see the full Fringe programme here.

 

Book your place at Evolve 2014 here. See you in London?

Ethical business with a social dimension...
Ethical business with a social dimension…

 

Profit – not always the point

Harish Manwani, the Chief Operating Officer of Unilever argues that values, purpose and sustainability are, should be, key business drivers.

A short journal entry. The film, the words say it all!

Ethical business with a social dimension...
Ethical business with a social dimension…

Office of Fair Trading, banks and SME’s

Banking review SME 2014 cover pic
Moving very, very slowly…

Published a week or so ago now, the Office of Fair Trading update on their market review of banks and their attitudes and approaches to the SME sector makes for interesting reading.

The report notes that the mainstream banking sector has made some positive movements and improvements to their SME approaches, following the 2002 Competition Commission’s investigation into banking practice.

Icon for Adobe PDF View, print or download the full report from the OFT here.

However, there is much to be concerned about from an SME perspective ‘...the OFT has received concerns about failure to comply with…undertakings, which prevent banks from requiring an SME to take out a Business Current Account (BCA) in order to obtain a business loan (that is ‘bundling’ of BCAs with business loans). The OFT considers that compliance with these undertakings is important as they are designed to help providers to compete effectively in SME banking’.

Even in 2014 the report finds that…

  • The provision of business current accounts (BCAs) and business loans remains concentrated among a small number of major banks.
  • Barriers to entry and expansion may be contributing to newer or smaller providers finding it difficult to enter and expand their business across the core business banking products.
  • SMEs find it hard to differentiate between providers. There are low levels of shopping around and switching, and low awareness of alternative sources of finance.

More troubling is the aspect of the report which cites new, alternative lenders as being hampered in delivering services to SME’s because, allegedly, the mainstream banks are moving at a snails pace when authorising transfers or in waiving security on current loan arrangements for additional alternative lender charges to be rendered.

Two things occur. The notion of  ‘level playing field’ is rendered useless in competition terms, and that the openness and clarity of most of the Social Finance sector, given their strong ethical and community focus, shines like a beacon across the current banking landscape.

internetIconMini Read the full Office of Fair Trading Press release on-line here.

Ethical business with a social dimension...
Ethical business with a social dimension…

The impact of the CDFI

CDFI 2013 Report cover image
How CDFI delivered…

Inside Community Finance 2013 from the Community Development FInance Association internetIconMini is an illustrative document to frame the current CDFI landscape in the UK. In the report the Financial Secretary to the Treasury, Sajid Javid MP, declares that there is still much to be done for the struggling SME.

On balance, however, the report shows the emergent strength of the CDFI movement and offers a road map for the immediate future, built on its past success.

Download a copy of the CDFA Report for 2013 here. Icon for Adobe PDF

CDFI’s lending to social ventures in the 2012/13 period makes for positive reading…although more is always better (Ed.) The community development institutions lent £13 million pounds to 204 social ventures, the report tells us, This created or protected 1,900 jobs and represented a 37% increase in lending over the previous twelve month period.

Lending to individuals was equally impressive. CDFIs internetIconMini lent £19 million to some 40,600 people, which diverted 29,000 people from higher cost lenders, and saved over £7 million pounds in interest payments for those individuals.

Interestingly, the report illustrates that Community Investment Tax Relief (CITR), providing a tax incentive for those who invest om accredited CDFIs, was not a major driver of capital growth for the CDFI industry. Perhaps the delivery of the Social Investment Tax Relief scheme (SITR) this year will drive more money in from the cold for social based lending?

You can also gain insights into the reach of the various CDFI initiatives in the document.

In 2013, 93% of CDFI business loan recipients had been turned down for finance by a bank. Fifty seven per cent of loan recipients had previously been unemployed.

The report, in terms of potential reach, also has something interesting to say about the engagement of CDFIs and Local Enterprise Partnerships (LEP). CDFIs are hopeful, that with the roll out of the 2014-2020 European Structural and Investment Funds (ESIF), that CDFI/LEP partnerships can become active and effective.

You can see development and delivery guidance for ESIF here. Icon for Adobe PDF

At eighty pages Inside Community Finance 2013 is a lengthy document. But it is structured with data, forecasts and case studies that make the CDFI story a telling one. Whether you are looking for evidence of the CDFI impact at local, region, national or European level – there’s something of interest here.

Ethical business with a social dimension...
Ethical business with a social dimension…

The SME graduate?

Amy Simmons and Emily Ward, two final year undergraduates at Nottingham Business School have just delivered an interesting research paper on …why are so few graduates working in SMEs within the UK?

Having worked in small business in their University placement the researchers had noticed how graduates appeared to be missing from the SME human resource landscape. The SME economic landscape is important. As their research states…

SMEs are the driving force towards the recovery of the economy as they account for 99% of the UK businesses. They also provide 67% of private sector jobs and contribute to 50% of the UK’s GDP.

Their research indicates that SME’s do not understand  and have a lack of knowledge about graduates. What are their qualifications worth? What impact can a graduate have on my business? Graduate skills, even from major corporates clearly focus, their research shows, on ‘traditional’ skill sets. Team working and communication, team players required and a strong can do’ attitude.

A key reference in the Simmons and Ward research is the difficulty of actually connecting SME’s with graduates. Private sector ‘soft development’ of business often takes place outside of normal working hours in the UK.  Key careers fairs and ‘meet and greet’ graduate events are traditionally mainstream day events.

Overall we warmed to their thesis, and find echoes in our worry about Social Business awareness, which we have written about in the past. How to enable graduates to recognise the Social Business sector as positive career progression path? The Simmons and Ward research seems to indicate that the issue is of an even more fundamental nature.

How to make graduates aware of the SME sector opportunities for dynamic personal and professional growth? Leaning towards social or community enterprise is probably the second, more subtle step to take in our raising awareness campaign?

Discover the Nottingham Trent University web article in full here…

Ethical business with a social dimension...
Ethical business with a social dimension…

Is the economy broken?

Although it has been around for a month or two now, we thought it was worth revisiting the Transforming Finance film from the pages of The Finance Innovation Lab.

Even at the start of 2014 we are burdened by news of multi-million pound loss making institutions paying multi-million pound aggregate bonuses. The schism between the ‘real economy’ in communities and the netherworld of internal trades in the financial markets is well illustrated in the film below.

The core message of the film is a critique of the current banking environment. Interestingly the voices heard and the opinions expressed are voiced by significant players in the finance innovation sector – what is not heard is the voice of disorganised fiscal radicalism, rather a careful, reflective and pointed analysis of the current financial situation.

The unstated, yet telling counterpoint, to the argument expressed is a positive acclamation of the Social Finance sector. The notion of financial institutions trading with each other, the making of money out of money, seriously impedes the fiscal health of communities and small business.

The delivery of innovation, profit and community welfare in the broadest economic sense is not impossible. We heard about it in this film.

Discover the Finance Innovation Lab here.

Ethical business with a social dimension...
Ethical business with a social dimension…

Community Enterprise funding

‘Power to Change is a new initiative which will invest up to £150 million to support the development of sustainable community-led enterprises across England. It will be delivered by an independent Trust established next year’…The Big Lottery

A new Trust will be formed to deliver the Power to Change programme, which should become active in the Autumn of 2014.

This new fund represents a refreshed recognition that it is community enterprise which can play a key role in the regeneration of localities.

Whether you and your community are looking to develop pop-up shops, reclaim that closed library or to re-energise a community centre this new fund could be for you.

The new fund is an injection into the community business sector, much to be welcomed. As always, Oh that the pot was even bigger!

You can see examples of community enterprise to help define your vision here on the Big Lottery web site.

You can see the original Power to Change briefing document, including information on a range of existing funders for the sector as a pdf file here.

Ethical business with a social dimension...
Ethical business with a social dimension…

The money illusion – explanations

Illusion image
Thinking about money and society

Put simply money illusion is the propensity to respond to changes in money magnitudes as if you were were responding to changes in real magnitudes.

For example, if we increased your income by 100% from now, but also increased the cost of all the goods and services you used or purchased by 100%, and you were already buying the optimum goods or services for your needs, then you could go on acquiring these at previous rates of consumption. (Any goods or services that you previously couldn’t buy, you still could not afford).

However, the money illusion, in essence, is when your income rises and you ‘feel’ richer, consequently you purchase more luxury or non-standard goods or services because of that feeling and purchase less of the staples you previously bought.

Individuals fail to grasp that their real income has not risen. (Your real income is measured by dividing your money income by an appropriate and consistent index of prices…see below…).

You can see therefore in mainstream economic practice that the banks ability to quite literally print money, to increase it’s own money magnitude at will – remote from real lives and economic behaviour, or for an individual to regularly value and revalue their property portfolio on a rising market, can lead to financial disaster for the individual.

The economist Irving Fisher deliberated long and hard about the high value of stocks immediately before the 1929 Wall Street crash, ands produced many of the indices of value that we still use to measure, or second guess, market ‘fluctuations’ today. This thinking has not prevented economic juddering in recent decades either.

We would wish to argue that a rational social economy, based on business outputs that are focused on social outcome, not individual wealth or shareholder value as a predominant driver, are one way to counterbalance the money illusion.

Taking out the thirst for dis-proportionate personal wealth and dedicate outputs to a wider social good – replacing the feeling of ‘riches’ for the feeling of ‘community’ – is a perfect way to achieve a new economic equilibrium.

Boost the social business market, starve the illusion!


Explanations is an occasional Mining the SEEM piece to explain economic and financial thinking in a clear and understandable way. If you have a term to be explained, or even to tell us when we haven’t been clear, then contact the Editor at Mining the SEEM and let us know.

Ethical business with a social dimension...
Ethical business with a social dimension…