Frontier, commissioned by Local Trust, has produced a new report exploring the importance of capacity building and local leadership when investing in ‘left-behind’ neighbourhoods, and the implications of this for a Community Wealth Fund (CWF).

How could a Community Wealth Fund be designed?

In March 2023, the Government announced that Community Wealth Funds would become a named cause to benefit from the expanded Dormant Assets Scheme. These funds aim to empower local residents in ‘left-behind’ neighbourhoods facing a lack of social infrastructure to invest in their local communities and rebuild their social institutions. But what is the best way to do this?

Local Trust, through its Big Local programme, has gained significant insights over the past decade into what can make programmes that invest in communities successful. In particular, they found the following to be crucial:

1. Investing time and funds in building the capacity of local areas – that is, developing and strengthening the skills and confidence of people within these communities.
2. Placing the decision-making authority about which projects and activities to run into the hands of local communities – not Local Authorities or Central Government.

To further build the evidence base beyond its experience with Big Local, Local Trust commissioned Frontier Economics to review the literature in these two areas and assess whether and under what circumstances this may or may not hold true more widely.

What did we find?

Our review suggests that building soft skills in local areas can benefit the participants in these schemes and also lead to improved delivery of local projects that they manage. Similarly, delegating decision-making to local communities (i.e. ‘resident-led’ decision-making) has the potential to lead to better policy outcomes within communities, to build social bonds between residents and to lead to more efficiently delivered projects.

Overall, the evidence to date suggests a CWF model that includes a programme of capacity building could yield significant benefits in left-behind areas through better-managed projects and have wider benefits for the individuals participating in terms of higher wages, greater employment chances and improved mental health. 

What next?

A CWF that empowers disadvantaged local communities and builds their capacity over the long term has the potential to be a highly effective vehicle for change. It also presents a valuable opportunity to test and learn what works and what does not so that communities receive the best support possible. Ultimately, providing left-behind neighbourhoods with the essential tools to successfully invest in their local areas and to help rebuild their social institutions is the overarching aim of a CWF. Taken together with the learnings from the Big Local programme, the evidence to date suggests this two-pronged approach could go some way to achieving just that.

Read our blog article and report, ‘EVIDENCE ON THE IMPORTANCE OF CAPACITY BUILDING AND COMMUNITY LEADERSHIP IN THE SUCCESS OF LOCAL AREAS’ here.