AS David Cameron warns of ‘red lights flashing on the global economy’ and the Eurozone on the brink of a possible third recession, could Yorkshire provide an alternative model? You bet.
Fifteen years ago, a small group of concerned people got together to set up the Key Fund. Tired of seeing people and communities languishing in areas decimated by the collapse of coal and steel, they decided to do something radical: give money directly to local people to turn enable them to turn things around for the better.
Back then, it was small grants in South Yorkshire. Today it’s a range of social investment products across the North.
It’s just common sense: help people living in their communities to create their own businesses that also do a bit of good. The radical bit? They’ve all been turned down by mainstream banks, with no security – just a great idea for an enterprise that puts people and the planet first.
Social enterprises are moving from niche to norm. Think the Big Issue, Jamie Oliver’s Fifteen, and the Eden Project; there’s a social enterprise for nearly everything. And they are inspiring.
Unity Hall in Wakefield is an example of a community driving regeneration in their own area. The disused Grade-II building that stood derelict for 12 years was saved by a community benefit co-operative. We kick-started the regeneration with an investment of £40k when nobody else would touch it – attracting a further £4.5m. The new venue will have a £6m economic impact, creating 100 jobs. It’s more than a redevelopment; it’s a cultural movement by the people for the people, shaping their future.
Doncaster Refurnish is a recycling and refurnishing scheme. It not only provides affordable furniture in an area of high disadvantage, but employment. At the heart of the communities it serves, people with learning difficulties and disabilities and the long-term unemployed are actively engaged. It shares resources with schools, theatres and community groups. Last year, Refurnish diverted 817 tonnes from landfill and supported 8,488 individuals and families and 24 community groups with the proceeds.
Social enterprises are not just helping locally, they provide solutions to some of the world’s greatest challenges.
Settle Hydro is a revolutionary hydro-electric scheme in the North Yorkshire village, run by the community. Installing the 50kW Archimedean screw at Settle Weir was a mammoth undertaking but it has bolstered a fragile rural economy and Settle Hydro has advised 400 communities worldwide on how to take responsibility for their future.
Or how about the groundbreaking Nine Health? Based at the University of Sheffield, they develop innovative technology for patients and public benefit. We helped the delivery of a major EU project, involving eight countries, that uses ‘supercomputers’ to model disease treatments and other interventions to save lives and eliminate suffering. Our northern soul has national, and international clout. Back to Europe and how our social investment model can rescue the global economy.
I returned from an event in Lisbon to discuss how it can best utilise a new €150m Social Innovation Fund and how citizens can take control of their lives and create economic solutions to restore communities where top down policies have failed.
It was clear, among all the EU countries, the British government – and the Key Fund – has pioneered the social enterprise economy in the last 10 years.
As one of the oldest investors, our mission has never been stronger: creating successful neighbourhoods by distributing money effectively into the poorest communities – 78 per cent of investments are in the top 25 per cent of the most deprived areas in the UK. We have invested £34m to thousands of civic economy organisations. The human cost would be too high if we didn’t intervene and support those marginalised and abandoned by the conventional marketplace.
It’s not about throwing money at a problem, but helping enterprises become self-reliant with a mixture of grant, business skills and investment readiness support. This is the Key Fund cocktail and it works by removing barriers. What Portugal (and Europe) needs to build into its delivery is this process of support and right kind of money.
There needs to be one mechanism that not only delivers access to money, but meets the needs of these organisations at varying times of their development. It needs to offer pre-investment and post-investment business support to enable them to realise their business plans.
Some clients have called it a leap of faith, we call it an antidote to cynical lending that puts profit before people. If Europe is to learn from our experience, funds have got to be driven from the ground up. It needs to be relationship-based, and delivered by organisations who can remove the barriers and bureaucratic burdens at a local level. It’s about more than just unlocking finance.
• Sam Tarff is chief executive of Sheffield-based Key Fund, the UK’s biggest regional investor in the social economy.