Should we take the plunge?

Community enterprises are more reliant on the state than ministers seem to realise

By David Walker

On a hot summer’s day, people in Lewes, in East Sussex, can stroll along the banks of the River Ouse – too fast-flowing for safe swimming – cross a footbridge, pay a modest entrance fee, then plunge into the bracing, spring-fed waters of Pells Pool, a vast open air body of water, with lifeguards, a paddling pool for infants and grass on which to laze and soak up the sun.

Run by the Pells Pool Community Association, here is an example of local enterprise to gladden ministers in the coalition government. This, surely, is the Big Society in action. People power stopped the pool closing a decade ago and – global warming plays a part in this tale – it has lately been running at a profit, with the money helping upgrade changing rooms and water filters.

Yet the public policy lessons offered by Pells Pool to ministers in the coalition government are not all what they had in mind. Pells Pool has not got rid of the state. The pool is undoubtedly a showcase for the voluntary spirit: the community benefits and numbers of people put a lot into keeping it going. But the pool still depends on public sector support, both capital investment and revenue grants. The community association receives an annual grant from Lewes Town Council, which continues to own the site. That, say the organisers, is indispensable.

So community action has not substituted for the state. The two have joined to produce a good outcome. But without public support the enterprise would founder; it is also true that without the enthusiasm of the volunteers, the pool would succumb to the fate envisaged for it a decade ago and be turned into a concrete skate park.

The Cameron government wants to reposition the boundaries between the local state (councils) and people, both as individual consumers of public services and joiners-in. Ministers are encouraging councils to transfer assets, even contract out services to local groups. The prime minister recently went to Liverpool to extol volunteering, announcing spearhead projects in that city, the London Borough of Sutton, Eden Valley in Cumbria and Windsor and Maidenhead.

The leader of Sutton, Liberal Democrat Sean Brennan said “people want to be empowered by government to make the decisions that shape their communities and everyday lives”. (Some ambiguous phrasing there, you might say: do people need to be empowered by the state – don’t they empower the state?)

Communities and Local Government have set up a website to receive suggestions for cutting ‘red tape’, especially regulations that inhibit local community action. The talk is of lifting health and safety restrictions that allegedly impede local groups taking over parks or organising neighbourhood snow clearing schemes in winter.

The Government’s hope is that local groups will be ambitious, taking over public services. But that depends on the transfer of assets – redundant buildings, schools, residential homes and empty offices. ‘Community ownership can bring people from different backgrounds together’, the Communities Secretary said. ‘It can foster a sense of belonging. It can play a role in enhancing the local environment, alleviating poverty and raising people’s aspirations. Fundamentally, it’s about giving local people a bigger stake in the future of their area.’

The Communities Secretary uttering those hopes was not Eric Pickles but a several times ago predecessor, Ruth Kelly. The coalition’s enthusiasm for local social enterprise is not new – but it seems not to want to learn any lessons from Labour.

One is well worth noting. Kelly commissioned Barry Quirk, the chief executive of Lewisham, to study community ownership, amid talk of a ‘community call for action’ and a ‘public request to order disposal’. He reported enthusiastically in 2007 on local groups taking over halls, old people’s homes, parks and allotments. But he also warned such takeovers would often be “a long and stressful journey”.

The main reason the Quirk initiative did not go far was capital. To transfer assets to community groups you have to lop something valuable off the local authority balance sheet – a version of privatisation without proceeds. Often the capital asset (such as a swimming pool) will also need refurbishment  and continuing injections of capital.

In Hastings, the Hastings Pier and White Rock Trust are campaigning to save the resort’s privately-owned pier, which is closed to the public and in danger of falling into the sea. The trust wants the council to acquire the pier under compulsory purchase and hand it over. It’s a good example of state action – a fair amount of public spending – being the trigger for voluntary action.

The problems identified in the Quirk review have not gone away. Councils are under even more severe pressure to maximise returns on their assets. An Audit Commission report last year said they should not rush to rapid disposal if local property market conditions were not right, which might mean keeping an asset in the hopes of recovery of prices. But that could mean denying a community group. 

Another persistent issue is scale. Say a neighbourhood group acquired a park. To cut costs, it might consider contracting out grass cutting, repairs and maintenance to a specialist company. But would that mean ‘delocalising’ – the grass-cutting machines would sweep by the dog walkers without a friendly hello, not much different from the days the council owned the park.

With their origins in the Victorian era, housing associations have long been an exhibition of the strengths and opportunities of how non-profits can provide basic public services. Their history also shows how quickly local initiative can become bureaucratic and impersonal, and how social enterprises can come to look remarkably similar to the public bureaucracies they were to replace. Take Places for People, the giant non-profit social housing provider. Once it was the North British Housing Association, with strong links to communities in such places as Preston. Now it operates across the country, with no obvious local links. But it would argue, with size come economies of scale and the capacity to borrow to build new homes.

The Government has not yet said whether it expects councils to favour local groups even if they cost more. For-profit contractors such as Capita and Serco are predicting the squeeze will benefit them, but at the cost of making services more anonymous and ‘functional’, less connected to residents and local areas.
The question of size is inescapable in health. Andrew Lansley, the health secretary, has called foundation trust hospitals versions of social enterprise. A big teaching hospital is likely to be a huge organisation, with complex governance, serving a wide area. Yet ministers often elide social enterprise and local action in speeches. Often the more successful a social enterprise is in providing a service, the more attenuated its connexions with community. Another glorious opportunity to cool off in the summer months is at Brockwell Lido in Herne Hill, south east London. Local activists protested when Lambeth Council proposed to close the monument to 1930s municipal provision in 1990. It now thrives - but the charity running it, Fusion Lifestyle, operates in Oxford, Milton Keynes, on a £30 million a year turnover. The group recently won a competition to run Enfield Council’s leisure centres. Brockwell Lido still has its activists – including those swimmers prepared to break the ice to take a dip – but the management of the pool itself is contracted out.

The Government’s line is that what works best in local circumstances is best. And local opportunities are many and varied. Cornwall Council is leasing the former cattle market in Helston to a local social enterprise, which wants to build business units and a conference centre. The social enterprise ILM (Highland) has a two-year contract to recycle electrical appliances from refuse collected by Highland Council. The Government has talked about community groups taking over libraries that would otherwise be closed, and pubs and post offices.

But, again, history has lessons to teach. The problems identified a few years ago in a report to the Office of the Third Sector by academic Stephen Thake have not gone away. He concluded ‘the vitality of community based organisations impacts upon the wellbeing of society as a whole but they are organisationally and financially fragile and reliant on over-stretched staff, volunteers and uncertain funding.’

In the Forest of Dean, local campaigners are agitating about a loan from the council to a non-profit that was supposed to step in when health services were closed. Instead they money seems to have gone on set-up costs, including creating a company and servicing a governing board. Local groups have to be attentive to the ‘g’ word – governance – because without proper procedure, votes, articles of association and all the rest, their accountability may lessen and their claim to be rooted in the community opened to challenge.

29 July 2010

David Walker. Managing director, communications and public reporting at the Audit Commission. These are his own views.,