8 Feb 2011
Community Asset Ownership 1: an interview with Sara Neuff of Coin Street Community Builders
Here is the first of two interviews I did recently for the new book, on the subject of the community ownership of assets. The second will be published tomorrow. Today’s is with Sara Neuff of Coin Street Community Builders, an amazing project I have written about here before.
So Sara, why is it important that communities own and run their own assets? Why does it matter?
The first response to that is that it in a sense depends upon the kind of asset and what it is you’re trying to achieve. It doesn’t always matter for communities to own their own assets if they’re looking at delivering community services that are not linked in with that. For example, if you’re running a youth group then it probably doesn’t matter that you own your own youth hall. However, the organisations that are trying to do something transformational, that are really trying to shift their communities on a permanent basis – particularly if it’s in a poor area, if there’s development work, long term dereliction or under use – all of those kinds of things, then it is important.
If you’re looking at running projects like community housing, community businesses, those kind of things, then it’s important for a couple of reasons. The first one being that if you can get a freehold or some kind of really long leasehold, what happens is that goes on your balance sheet. As a social enterprise you can run businesses, so for example housing, workspace, environmental technologies and all that kind of stuff. In order to borrow against and finance it, you actually function as a kind of business rather than just as a community project.
Another reason why that is important is because it recycles wealth. So whatever wealth you’re creating, not only in terms of your own turnover but also in terms of any increase in value created by more effective use of the space, that then stays in the community and can be used to fund different services that perhaps wouldn’t pay for themselves.
The other reason why it’s important is around control and independence, and that’s both political and financial controls. If a community owns its assets, then the community itself can decide what’s important within that community and it’s not subject to the vagaries of say, changes in local government, changes in government funding even –for example, the times we’re in at the moment. All of those things mean that you can actually keep going regardless of the chaos around you, you can control your own situation and earn your own money and deliver your own balance of business in that way.
Why isn’t it happening all over the place? Why is it still quite a limited thing? From when Coin Street first started, why didn’t we have them absolutely everywhere from this point?
Not least because it’s difficult. You need a really strong community spirit. So during the Coin Street campaign prior to Coin Street’s acquisition of the site, there were over two hundred people in the community involved in the campaign at its peak, and it was a seven year campaign. It’s not the sort of thing where you can just say, “you know what, I fancy doing this thing”, it takes years and an enormous amount of dedication and spirit to get it going.
Leadership and vision is crucial. And equally, for people to dedicate that amount of time to making something work, it really does take a special kind of person, a special kind of community to be tenacious enough to achieve it.
There’s also been an attempt over the past couple of years to reduce it to the lowest common denominator, that a) everybody should own their assets where actually, as I said before, for some people it’s not the most appropriate thing, it’s not a panacea, it doesn’t suit every situation. And b) that owning your own asset means having a twenty year lease on a community space, which actually doesn’t bring the sort of benefits we’re talking about: capturing the wealth, having the control, having the independence, assets on the balance sheet. There’s been almost a reduction in the concept and the idea in order to try and get over the fact that it’s really quite difficult, which has sort of almost taken the bottom out of it.
The other reason is around resources. In order to take on significant assets you need to have done feasibility work to check that you’re not going to take on an enormous white elephant; to be able to prove to banks that you’re serious and you can take on debt finance. So you need investment at the feasibility stage, both of money and of skills. For ambitious projects this can be into hundreds of thousands of pounds. Particularly in poor communities, which are the communities where the biggest opportunities lie in this field, they just don’t have access to that level of resources. So I think all of those things together combine to make it hard to do the really transformational stuff.
What lessons can Transition Initiatives take from the experience of Coin Street? Because Coin Street was forerunner wasn’t it, of the kind of bottom-up, community-led responses Transition initiatives are now trying to do…
I think there are a lot of similarities between Coin Street and the Transition Movement, from what I know of Transition. The priorities at the time in the Coin Street area were quite different – we weren’t living in the same consciousness of peak oil and such, but we did have a very clear view of what it was that the local community wanted. Obviously, the Transition Movement has that clarity as well. So I think the success factors for Coin Street are multiple.
One of the things is the fact that it’s on a community and neighbourhood scale – we really think that that is one of the keys to success. It’s having a large enough scope so that you can do something sensible with it, so that you can have profitable parts of the business subsidising other bits that are perhaps not doing so well and vice versa as times change; but small enough so that it’s in your community, it’s an identifiable neighbourhood whereby you’re not spreading yourself too thinly basically.
The other thing is about community campaigning, which I understand is something Transition groups are also good at. It’s about having a really positive community campaign, that’s about looking forward and is around understanding what it is that you want, not what it is that you don’t want. Often these campaigns come up around things that you’re fighting against, so it might be against selling off public assets into the private sector, it might be against an unsustainable development…. Coin Street was basically about businesses coming in to a semi-derelict industrial area and levelling all the housing, kicking out the remaining residential population and putting offices in. Having to transform the local campaign from saying, “oh, we don’t like these people”, shouting and complaining – that’s the galvanizing factor, then you have to shift it into asking, “What do we want instead? And how are we going to go about achieving that ourselves if no one else wants to do it for us?”
One of the things that worked really well with Coin Street is the long term view. …you have to remember that Coin Street bought the land 26 odd years ago, and that was after a 7 year campaign, and we’re still developing – we still have two undeveloped sites. So being in it for the long term, looking at long term development which is sustainable, building a track record gradually and doing it one thing at a time, and not expecting to have it done too quickly effectively.
Also, running it as a business. Yes we’re a community organisation but Coin Street is first and foremost a business and if we run it as a good business we’ll be able to do all the community things we want to: if we don’t have good business – we’re in trouble. You’ve lost all the positive community benefit if you go bust because you’re not actually running a good business.
What do community groups or Transition initiatives need in place before they can start thinking about acquiring assets? I’m thinking in terms of scaling up, you start as a small community organisation, what is your advice in terms of scaling that organisation up so that it it in a position to be able to acquire assets?
I think the first thing is around the community campaign and the vision as I said before. Actually understanding what it is you actually want to do, being imaginative about what the opportunities are in your local area and creating something which is strong, positive and everybody can get behind, is the first step.
If you don’t really know what you want to do, then talking about legal structures, talking about finances, all those different things is effectively too soon. You need to have a very strong idea about what you’re achieving and also your business model. The other thing is to look at your leadership and the energy that sits behind that. Take a look at yourselves, and think about who you’ve got as trustees, who you’ve got as volunteers, what kind of skills base you have, have you got good links in with the local community?
If you’re seriously looking at developing assets, then have a look around and if you don’t have people with some kind of experience and skills on your board, then look to see where you can bring those people in – maybe as new trustees, maybe as advisers. Also be clear that you’re in it for the long term and that you’ve got the drive to do it. One of the great ways of doing that is to build a track record slowly. Most people are unaware that during the Coin Street campaign, in those first seven years, the group of people that were involved in that campaign undertook a number of little projects. There was a 7 unit housing co-op and a few different projects that people did, not under the Coin Street name or the Coin Street banner, although it could be for other people. What it meant was that when they were going to the bank or negotiating the land deal that they were trying to do, or dealing with local politics they could say, “we have done something like this before, we’re not completely naïve and we have a track record”, and that only needs to be a small project to get going.
Okay. In the current economic, political climate, what do you see as the challenges and opportunities for the community aquisition of assets? What’s making it look more likely at the moment and what’s making it look less likely?
The opportunities of the economic climate are that developers basically have less money, there’s less bank lending going on, and there’s a dip in the property market, which means that you can buy things at a lower price, and a lot of the speculation of the bubble that we’ve been through recently, which had effectively inflated prices on the development sites is not really in evidence so much at the moment. So where you have sites that have failed – they may be in the hands of private developers who now don’t have the funds for them, they may be in the hands of the local government – it’s an opportunity to step in and acquire things for a lower price and do a development and then when the market goes up, if it does go up into the next cycle, then that value is captured for the community rather than having to buy in at a later stage.
Also, if an organisation can get capital funding, through things like the Community Builders Fund or stuff like that, then having some soft grant money on the table, actually having access to those funds, can be a real catalyst. There’s not an enormous amount of money floating around in the market at the moment. If you’ve got your hands on a bit of money, then a bird in the hand’s worth two in the bush and you are in a much stronger position to be negotiating with land or building owners that you’re trying to get the assets from.
On the other hand, the challenges of that is how do you get money as a community organisation when there is less money in the market? The Community Builders Fund has been really successful in terms of bringing that feasibility funding in. They grant money to do the investigations to find out whether it is going to be worthwhile to do the deal, and that’s been really important. I think the success of that has been recognised and yes there are questions about the extent of the government funding cuts at the moment, which is obviously very severe, but the success of that programme I think has been recognised and I think that we need to keep our eyes open – there’s an opportunity for government, there’s an opportunity for other trust funders and such to see the value of investing at times like this, so that the benefit is felt into the future, as a long term investment.
If you could pass legislation tomorrow, write a new act of parliament that was designed to better enable communities to sweep away all the obstacles that currently exist, what would it be, what would it focus on? Or are the obstacles just of our own making?
It’s a very difficult question! Around the things like the Right to Buy legislation, I think they are really important. But it’s also important to remember that with things like Right to Buy, there’s normally a short moratorium on a public asset being sold off. A group needs to be up and running and ready and galvanized in order to take advantage of those opportunities. If something comes on the table and there isn’t an established group that has developed its track record in some way, then they are unlikely to be able to take advantage of that. I’m fully supportive of that legislation but it has to be realistic. It takes time in order to be able to do these deals. Even with a group up and running already to have a Right to Buy legislation I would want to see that as being a twelve month moratorium in order for an organisation to really look at getting all the professional tests done to show whether it’s possible to push a deal through or not. I think that would be the main thing. And also, the banking legislation around feasibility funding and access to professional advice. It’s difficult to put that into a legislative format, but changes to the banking system so that it’s similar to the Community Reinvestment Act in America where they have community support from banks I think would be a really good step in the right direction.
Lastly, what developments have you seen in terms of the whole area that you find encouraging? Recent projects or developments…
Well, we’ve been working with the Community Builders Fund, supporting organisations that are trying to undertake this, and the Community Builders Fund has been really encouraging. It’s the first time that feasibility funding up to what we would consider to be a sensible level has been made available in our knowledge, because you can get up to £75,000 worth of funding plus some support from there. Prior to that, feasibility funding was only ever £15,000, £20,000, no matter where you went in the social investment market and you really can’t do much with small amounts like that if you’re looking at buildings, land and community assets. It’s been really encouraging and I think now funders are much more aware of what it takes to undertake community asset development. The fact is it takes a long time, it takes proper resources, and I think yes we’re in a difficult time for government funding at the moment, but I do think there are opportunities for seeing that kind of funding being made available in the next few years as well.
Through the Communitybuilders Fund, we’re working with a large number of clients that are doing community asset developments, all of whom are doing some really inspirational stuff and of those, around 6 or 7 of them are undertaking large deals on a similar scale to Coin Street or a similar concept. They are some enormously inspiring people who have effectively turned around and said, “we’ve had this long running problem in our community, we’ve seen successive governments, private companies, whatever it may be, come in and try and do something here and frankly it hasn’t worked – we’re going to do it ourselves.” Some of the things they’re coming up with are truly amazing. There are some really good examples coming through.
The other thing I find encouraging is the CLT community land trust model. It’s a really interesting model. It’s in it’s early days, the first few investments were given the go ahead recently. If that can scale up, and find an effective way of working in an urban setting as well as a rural setting, I think there’s really interesting stuff around community housing and long term housing supply that can be done there as well.
So generally it’s encouraging that people are starting to understand the scale of this work and despite the focus over the past few years around short leases and community centres being community assets, that’s starting to shift and people are starting to see that actually, doing this kind of work at a scale takes drive and skill and effort and I think we’re starting to see that coming through now more.
Brilliant, thank you Sara……..