Wales Co-operative Centre

Consultation Response

Priorities for the Local Government and Housing Committee

The Wales Co-operative Centre is a not-for-profit co-operative organisation that supports people in Wales to improve their lives and livelihoods. We are working for a fairer economy and help to create and retain wealth within our communities through the growth of co-operatives and social businesses, and by providing people with the skills to take more control of their own lives and strengthen their communities.

Our Communities Creating Homes project offers support and advice to new and existing organisations looking to develop co-operative community-led housing schemes in Wales. In 2020-21, we assisted 50 groups and organisations to develop community-led housing. We’re excited to work with anyone who is ready to think about housing differently.

Community-Led Housing

We believe co-operative and community-led housing has the potential to make a real difference as part of the solution to the housing crisis in Wales. We were happy to see that a commitment to increasing this model of housing was part of the new Programme for Government, and believe that assessing how the co-operative model, and community involvement in housing as a whole, can be expanded further in Wales should be a priority for the Local Government and Housing Committee.

Co-operative and community-led housing is about local people taking a leading and lasting role in creating secure, affordable homes and strengthening their communities. It brings people together to decide what kind of homes and communities they want to live in. People with a shared vision can come together and have an influential voice. They play an essential role alongside councils, developers and investors to create affordable homes which meet local community needs.

Community-led housing has the potential to significantly benefit many communities in Wales suffering from an undersupply of affordable housing. As an example, the issue of second homes impacting on community cohesion has been addressed elsewhere in the UK by community-led responses, such as the introduction of community land trusts. In these cases, the community can cap the cost of purchase or rental at an affordable level in perpetuity, providing permanently affordable housing for members of that community.

In research for the Wales Co-operative Centre conducted in 2019, residents living in co-operative and community-led housing schemes identified a large range of benefits gained from living in their schemes, beyond affordability. These included:

· Improved skills

· Increased confidence

· Better physical health

· Improved mental well-being

· A better financial situation

· Less loneliness/isolation

· Greater community feeling

· Increased ability to live in tune with their values and their environment.

In the middle of the Covid-19 crisis, further research was conducted about the experiences of living in these models of housing, and it found that these advantages were particularly important during difficult times, with one resident saying that: “Owing to our communal structure, I think we were more resilient towards the negative effects of the pandemic.”

Barriers and Solutions to growing this model of housing in Wales

Co-operative and community-led housing schemes already make a big difference to the lives of people and communities across Wales, but we want to develop this model even further. Through our work supporting these schemes in Wales, from those who are just starting to develop an initial idea to those who have lived in co-operative housing for years and wish to expand their provision of affordable housing, we have identified key barriers to the sector in Wales and identified policies that can overcome them.

Lack of Awareness

The first step to developing the number and size of community-led and co-operative housing schemes is making sure that key people are aware of it as an option. This of course includes potential residents and the general public, but a crucial aspect of this is increasing awareness of the potential of community-led housing among key stakeholders such as local government, community groups, and policymakers. This can come through a variety of means, such as promoting successful case studies in Wales and elsewhere and mainstreaming the co-operative and community-led models in policymaking.

Access to Capital

The most common barrier or challenge for groups looking to set up community-led or co-operative housing projects is access to finance. This can come in different forms, including:

· A shortage of grant funding/risk capital for pre-development costs such as finding accessible sites and planning applications

· Lack of dedicated funding for land acquisitions

· Lack of a single financial pathway for making multiple applications to different funders.

Access to Land

One of the fundamental obstacles that we have identified facing several potential community-led or co-operative housing projects in Wales is finding a suitable site that is available for purchase. As a result of similar issues relating to community-led projects or community ownership of land in general, there has been significant policy developments in England and Scotland that could be replicated in Wales.

In Scotland, there has been consistent policy interventions seeking to develop community rights and community ownership. The Land Reform Act 2003 provided certain community bodies with a pre-emptive right to have the first option to buy land that went to the market. The Community Empowerment Act 2015 allows communities to have a greater say in decision-making, increased the level of funding available, and extended the right to buy to all communities. The Land Reform Act 2016 developed a Land Rights and Responsibility Statement and developed the right to buy land for sustainable development. In addition, the Scottish Land Fund has allowed greater levels of funding for community-led projects. In the past 10 years, there has also been a growth in policy in this area in England, including the Localism Act 2011 and the development of the Community Right to Build, Challenge and Bid for Land.

Skills

The different stages of preparing, successfully launching and managing a community-led or co-operative housing scheme is a difficult process, and requires a variety of skills and knowledge. As a result, ensuring that these projects have access to specialist support is essential. Communities Creating Homes has had considerable experience of nurturing and growing this sector in Wales, and we look forward to continuing to do this as the model expands even further.

Policy Solutions

We have identified specific potential policy interventions that can help to overcome the barriers identified:

· For each Local Authority to have a specific target for the proportion of new developments over a certain size that are community-led housing projects, as well as having a specific policy for developing this model in their jurisdiction.

· For the Welsh Government to establish a revolving loan fund, as has been effectively applied elsewhere in the UK, to address the lack of access to funding for potential projects. We have developed a robust and costed white paper for this and are happy to share it with the Committee.

· For specialist support for projects in this sector to be maintained and developed.

· For a focused campaign highlighting the benefits and potential of this model of housing to community groups, Local Authorities and policy influencers.

· For a Land Commission to be established to look at land reform and stimulate innovate thinking in how land and assets are used for the community, looking at the potential impact of legislative change, specific funding mechanisms and other interventions.

What we want from this Committee

We were delighted to see that, following our work in this area, the Welsh Government included a specific reference to growing the community-led and co-operative housing sector in Wales in its Programme for Government.

We believe that this committee can play a crucial role in holding the Welsh Government to account on this issue, and exploring what steps can be taken to ensure that this objective is successfully met in a way that empowers and benefits our communities.

In addition, we would like to ensure that the potential of this model of housing is considered in the context of some of the challenges facing the Welsh housing sector and society generally, including the second homes crisis, the challenges facing people trying to get on the housing ladder, the “build back better” initiative and its reprioritisation of well-being, and the climate emergency.

Example

Affordable housing secured with £180,00 community investment

A housing co-op in Machynlleth has raised £180,000 to secure their home for affordable housing. Thanks to offers of £180,000 in loans from members of the public Tir Cyffredin housing co-op will now be able to provide seven secure rentals and an informal community hub for generations. In a nail-biting fundraising campaign the final amount needed was raised in the last 24 hours.

Members of Tir Cyffredin, who had faced homelessness if they hadn’t been successful thanked supporters on Facebook, ‘Diolch o’r galon! Thanks from the heart! we are now excitedly looking forwards to the next step, and contemplating a future’ They also thanked the owner of the house who has reduced the asking price to make it affordable to the group, and Allan Shepherd, Community Led Housing Officer at the Wales Co-operative Centre.

Allan, who has supported the group for the past 12 months joined in the celebrations.

‘I am excited to see a new housing co-op arrive in Mid-Wales. My job is to help communities create homes so this makes my day. The fact that Tir Cyffredin secured in pledges £40,000 more than they actually needed is a stunning achievement and a testament to all their hard work. It also shows a real appetite amongst the public to support schemes where there is genuine community involvement.’

Local Government Consultation Response

ABOUT US

The Wales Co-operative Centre is a not-for- profit co-operative organisation that supports people in Wales to improve their lives and livelihoods. We are working for a fairer economy. We help to create and retain wealth within our communities through the growth of co-operatives and social businesses and by providing people with the skills to take more control of their own lives and strengthen their communities.

Our projects are as follows:

· Social Business Wales provides intensive, one-to-one support to new start social businesses as well as those which have ambitions to grow and a viable business proposal.

· Digital Communities Wales: Digital Confidence, Health and Well-being works with organisations across Wales, in order to help people increase their confidence using digital technology so they can improve and manage their health and well-being.

· Our Communities Creating Homes project offers support and advice to new and existing organisations looking to develop co-operative community-led housing schemes in Wales.

· Community Shares Wales Resilience Project is funded by the National Lottery Community Fund and delivered by the Wales Co-operative Centre. We help communities raise investment to protect and strengthen the things that matter to them, such as pubs, libraries or other local services.

Introduction
Community Wealth Building, Build Back Better, Resilience and Decarbonisation

At the Wales Co-operative Centre, we work to build a fairer, more resilient economy that has the well-being of its citizens at its heart. We believe that to achieve this, the way we as a country think about our economy must be transformed. We subscribe to the interpretation set out in the Donut Economics model, that states that we must prioritise working in a way that doesn’t threaten our environment, while ensuring nobody falls below a social floor in terms of well-being.

In order to achieve this, we support the economic approach of community wealth building, a movement that is growing in the United Kingdom and internationally. The Centre for Local Economic Studies (CLES) defines community wealth building like this:

A people-centred approach to local economic development that redirects wealth back into the local economy, and places control and benefits into the hands of local people.

We know that in order to achieve this, social enterprise, co-operatives and wider principles of co-operation and community are essential. Of course, changing our economy to have these priorities necessitates ambitious and effective local government. We want communities across the country to be able to benefit from social enterprise and the spirit of co-operation, and therefore urge this committee to play a vital part in embedding the principles of community wealth building in economic policy in Wales.

The committee can support a move towards community wealth building by producing high-quality research on local economies in communities across Wales, what must be done to achieve a just and sustainable economy, and how we can build on successes across the country and learn from each other. In addition, we would urge the Committee to hold the Welsh Government to account on the positive steps it has already taken in legislation such as the Social Services Act (Wales) 2014 and the Well-being of Future Generations (Wales) Act 2015, and how this legislation can lead to delivery that genuinely impacts the people and communities of Wales by embedding social enterprise, co-operatives and community-led initiatives at the centre of our economy.

Benefits of Social Enterprise

Social enterprises deliver on the ambitions of community wealth building by putting people and planet before private profit. They are driven by a social, environmental or community mission and re-invest profits to ensure these goals are met. In Wales, the sector is estimated to include up to 2,309 businesses and up to 56,000 employees, generating £3.1–3.8 billion in value.

The positive impact of social enterprises could not be clearer. They are essential to the foundational economy and operate across our communities, especially in deprived areas where they are needed the most. Profits are re-invested in their communities. 76% of social enterprises pay the real living wage to all their staff. In the context of the looming unemployment crisis, the fact that 17% of new staff in social enterprises were previously out of work is significant. The social enterprise sector is also much more gender balanced – 40% of social enterprises are led by women, over twice as high as SMEs more widely (17%).

Specific industries

Whilst the Welsh Government has recognised the role social enterprise can play in delivering Llwybr Newydd – The Wales Transport Strategy (WTS) 2021, its long-term vision for an accessible, sustainable and efficient transport system, we want the Government to be more ambitious in their ambition for how social enterprises can play a key role in tackling the climate crisis. Social enterprises value the environment just as much as people and profit through committing to a triple bottom line, and as a result social enterprises in all sectors can play a crucial role in achieving the net zero target. In addition, many operate as enterprises in sectors such as renewable energy, zero waste, food, biodiversity and land management.  

Our Social Enterprise 2020 Mapping Report showed that social enterprises reported having more social objectives this year, which demonstrates the sector’s potential to broaden their support to address the increasing social needs created by the pandemic. Social enterprises are ideally placed to play a key role in helping with training and skills development in local communities and empower communities to have a greater stake in the climate agenda today. The Welsh Government has also committed to building 20,000 low carbon social homes, and we are calling for social enterprises to be included in the supply chains, and to ensure local businesses are supported in the inclusive delivery of such projects.

Benefits and Potential of Co-operative and Community-led Principles

In addition to social enterprise, co-operatives and community-led organisations can play a crucial role in embedding well-being our economy and local ecosystems. Across different sectors, workers in co-operatives see improved working conditions, better pay, and higher levels of job satisfaction, and community-led organisations ensure decisions that are made at a local level have the input and consent of those they will affect the most. Two sectors that we believe co-operative models have considerable potential in are care and housing, and we would urge this committee to work with relevant partners, including other Senedd committees, to understand how these models can be supported and developed.

In addition, we know that there is considerable potential for Community Shares in Wales. Community shares schemes are a way of raising money to finance a project. They can be used to save local shops and pubs, finance renewable energy developments, transform community facilities, or fund new sports clubs; the choices are endless. Rather than traditional forms of investment, in which large stakeholders invest the majority of the money needed, and subsequently have control, community share schemes are more democratically run and give greater control to the whole community of investors. This has the potential to make a positive difference to communities across Wales, and we would urge the committee to work with us to explore how this can be developed further.

What can the Committee do?

We believe that this Committee can play a key role in developing and embedding these principles in Welsh public policy. We believe that 2 effective tools at the disposal of Welsh local government are procurement and market-nurturing.

Firstly, we would urge the Committee to hold the Government to account in ensuring that the objectives it has set out in legislation such as the Social Services Act (Wales) 2014 and the Well-being of Future Generations (Wales) Act 2015 are met, and how this legislation can lead to delivery that genuinely impacts the people and communities of Wales by embedding social enterprise, co-operatives and community-led initiatives at the centre of our economy. In addition, we have asked housing associations and local authorities are given an ambitious target to spend a certain percentage of the investment with local businesses and social enterprises – research to understand how this can be done in an ambitious but realistic way would have a big impact.

Finally, we need to nurture the market to build the supply chains to ensure these business models can play a bigger role in our economy. We know that specialist support is essential – but the next steps are working with partners in specific sectors to ensure these models can grow further in Wales, and become the business model of choice. We urge the Committee to take an active role in exploring the role of local government in doing this effectively.