Local Trust: The Community Wealth Fund

The proposal for a Community Wealth Fund (CWF) grew out of learning from Big Local: that residents need time, resources and support to share lasting change in their neighbourhoods. It sought to apply that learning more widely, using investment from the expanded Dormant Assets Scheme to strengthen social infrastructure in England’s most deprived communities, with local people deciding how money should be used.

The eventual creation of a CWF was the outcome of a sustained, cross-sectoral campaign led by an Alliance of 800 organisations from across civil society, the public and private sector, alongside a small group of local and combined authorities. The Dormant Assets Scheme (DAS) transfers unclaimed financial assets – for example, from bank and building society accounts – to good causes. Originally, funding had benefited three named causes: youth, financial inclusion, and social investment.

The case for the creation of a Community Wealth Fund as a fourth named beneficiary of the DAS started to come together in 2018, when Local Trust, with support from Church Urban Fund, Barrow Cadbury Trust, Paul Hamlyn Foundation, Lloyds Bank Foundation, the City of London Corporation’s charitable funder, City Bridge Trust and NCVO, published Strong, resourceful communities: The case for a Community Wealth Fund.

The report set out what would become the CWF campaign’s core principles:

1. Long-term, patient funding (10-15 years)
2. Investment directly to neighbourhoods (c. 10,000 people)
3. Targeting places where social infrastructure is weakest
4. Decisions over how money is spent put directly in the hands of local people
5. Appropriate support provided to build community confidence and capacity.

Big Local provided practical experience on which to build the proposal. As a founding member of the Community Wealth Fund Alliance, Local Trust acted as secretariat over the course of the campaign.

Local Trust’s role extended beyond developing the evidence. It helped bring organisations together around a shared set of principles and sustained the campaign through successive consultations and changes of government. This continuity helped the Alliance respond to policy opportunities while maintaining its focus on long-term funding, neighbourhood-level investment and resident control.

In 2019, Local Trust published Left Behind? Understanding Communities on the Edge. It described new research by the Oxford Consultants for Social Inclusion (OCSI) which introduced the Community Needs Index and presented new, granular analysis of the location and characteristics of so-called ‘left behind’ neighbourhoods. The research showed that deprived neighbourhoods with fewer places to meet, weaker infrastructure for community participation, and poorer transport and digital connectivity tended to experience worse social and economic outcomes than other deprived areas.

OCSI analysis showed that deprived areas which lacked these assets had higher rates of unemployment, ill health and child poverty than other deprived areas. And they appeared to be falling further behind them. These findings helped identify neighbourhoods facing the combined disadvantages of economic deprivation and weak social infrastructure. It also confirmed a trend observed by Local Trust in early delivery of the Big Local programme: residents needed accessible places to meet, strong local networks and sustained support to turn their priorities into collective action.

In Left Behind? Understanding Communities on the Edge the CNI was overlaid with the Index of Multiple Deprivation to identify 206 neighbourhoods which suffered from the ‘double disadvantage’ of high socioeconomic deprivation and the lowest levels of social infrastructure in England. This was updated to 225 neighbourhoods when the research was refreshed in 2020. In the report, the CWF was envisaged as an independent fund which could, through providing support and funding over the long term, reinvigorate the social infrastructure and improve outcomes in England’s ‘left behind’ neighbourhoods.

While the contribution of social infrastructure to kickstarting neighbourhood activity, building community pride and resilience was being increasingly recognised, the economic case for investment needed strengthening. At a time of low economic growth and productivity, with the country still emerging from the Covid-19 pandemic, government was forced to make challenging decisions over where limited resources should be invested. In response, Local Trust commissioned Frontier Economics to produce a paper on The Impacts of Social Infrastructure Investment.

This independent assessment of the economic case for social infrastructure confirmed that investing £1m in each of England’s 225 ‘left behind’ neighbourhoods could generate a significant payback to the Treasury (HMT). Building on the Big Local model, Frontier Economics assessed the likely payback from a typical basket of community investments in social infrastructure at the neighbourhood level. Using a very conservative approach to developing its estimates, consistent with economic appraisal processes used by HMT, they concluded that £1m in investment in the most disadvantaged neighbourhoods in the country would likely generate £3.2m in social and economic benefits over a 10-year period.

The widening evidence base on the value of social infrastructure to regenerate the most disadvantaged neighbourhoods helped to build support for the CWF campaign. The formation of the All-Party Parliamentary Group for ‘left behind’ neighbourhoods in 2020 brought together a cross-party group of MPs and Peers who wanted to bring residents’ experiences and priorities into parliamentary debate. Members of the APPG built a strong base of parliamentary support for the campaign, highlighting the potential of the Community Wealth Fund to improve and transform the lives of residents in these neighbourhoods.   

After the Dormant Assets Bill entered parliament on 12 May 2021, a cross-party group of Peers stepped forward to press for the creation of a Community Wealth Fund in the House of Lords. They successfully amended the legislation to include the CWF as a beneficiary of the dormant assets scheme. Although the government removed the CWF amendment when the Bill returned to the House of Commons, as a compromise it agreed to introduce its own amendment committing to consult on a CWF becoming a new beneficiary of the scheme.

In 2022, the government published the Dormant Assets Consultation paper, seeking views from the public on the causes that should benefit from an expanded scheme. The CWF Alliance responded to the consultation, evidencing how a CWF would meet the government’s social and environmental objectives for the dormant assets scheme. It also sought to address one of the major concerns of policymakers at the time: how a resident-led, neighbourhood level funding programme like the Community Wealth Fund could be evaluated.

As part of developing the evidence base for the development of the CWF, Local Trust again commissioned Frontier Economics to draw from its expertise in rigorous evaluation and outline how the CWF could be measured for impact. Drawing on guidance from the Magenta and Green Books, the Community Wealth Fund think piece highlighted an evaluation approach which would enable accountability, continuous learning and improvement of the CWF as it developed.

In September 2023, the CWF Alliance celebrated when the government responded to the Dormant Assets Consultation with a commitment to create ‘Community Wealth Funds’ as a fourth beneficiary of the scheme. But when a snap election was called eight months later for July 2024, parliament dissolved before the government could announce its final plans for design of the CWF.

Following the change of government in July 2024, the Alliance worked to secure the new administration’s commitment to the Fund and its founding principles. In December 2024, the Department for Culture, Media and Sport (DCMS) announced that £350 million of Dormant Assets Scheme funding would be equally allocated across the four named causes in England – meaning that the CWF would receive £87.5 million over the following four years. The National Lottery Community Fund also announced that it would contribute an additional £87.5million, matching funds allocated from England’s Dormant Assets Scheme over 2024-2028 and taking the total investment to £175million.

Nine months later, DCMS and the Ministry of Housing, Communities and Local Government confirmed that the CWF would provide funding for ‘doubly disadvantaged’ communities in England. This was a term that Local Trust had been increasingly using to describe ‘left behind’ neighbourhoods – that in practice were doubly disadvantaged by high economic deprivation and low levels of social infrastructure. In a joint response to the CWF technical consultation, both departments also confirmed that the Fund would be delivered in line with the campaign’s original principles: long term investment and support provided to neighbourhoods of between 5,000 and 15,000 residents, with decisions over how the money is spent put directly into the hands of local people.  

After seven years of committed, cross-sectoral campaigning, the CWF Alliance achieved its objectives and succeeded in securing long-term investment to renew the social infrastructure in England’s most disadvantaged neighbourhoods. The CWF is an enduring legacy of the Big Local programme and has the potential to shift the dial in doubly disadvantaged neighbourhoods, building resident confidence and capacity for enduring, tangible change. With the campaign complete, the National Lottery Community Fund have been tasked with design and delivery of the Fund on behalf of government.

You can view a timeline of the CWF Alliance here.