Wales needs a new approach to local economic development – Community Shares are a proven solution to the challenges we face

26 March 2024

Cwmpas is delighted to publish the Community Shares Impact Report, outlining the impact of one of our recent projects, the Community Shares Wales Resilience project. The stories in this report are positive examples of what can happen when communities are empowered and given specialist support to develop local ideas and solutions.

Welsh communities are facing significant challenges. The latest economic crisis means that vital community assets like pubs, shops and music venues are being lost. This comes at a time when they could be vital for people already facing the human impact of a cost of living and public health crisis.

The fundamental issue is that the way our economy is currently structured means communities often don’t have the wealth, power or resource to have genuine control over the future of their local area. That means key vital assets that are hugely valued by their communities can be lost – whether because of decisions made in HQs far removed from the communities they serve, or the financial crisis facing local government in Wales.

How community shares can help

Despite this stark context, through our work we have seen inspirational communities coming together to protect key assets and develop community-led businesses. Cwmpas has supported these groups through our Community Shares Wales Resilience project, funded to run over three years by the National Lottery Community Fund Wales. The project was launched in October 2020 to support our communities to create and invest in businesses serving a community purpose.

Co-operatives UK defines community shares as a user-friendly name for withdrawable, non-transferable share capital: a form of equity uniquely available to co-operative and community benefit societies.

All businesses need capital to start, grow and be sustainable and community shares are an ideal way for communities to invest in them. Our team of passionate, experienced advisors has helped over 500 people and 18 communities throughout the process of setting up community shares offers, raising a collective £4,959,840. This has helped to build community wealth, save vital assets and develop the resources needed to tackle the challenges we face.

Promoting equality in the community

Community Shares can be run by Community Benefit Societies. This democratic legal model gives equal control, as each member has one vote regardless of how many shares they own – giving everyone a fair voice in how the business run. The model is attractive to funders and many businesses have successfully used it including Tafarn Y Vale, a community-owned pub in Ceredigion that was saved from closure by local people.

In our report, you will find more data and stories about the difference community shares projects have made in Wales, and the vital role that specialist support plays in making this possible. Y Ty Gwyrdd is another example of the positive impact the model and the project has had.

Y Ty Gwyrdd

Y Ty Gwyrdd, a zero-waste shop and community hub in Denbigh, received support from Cwmpas  – including help choosing the right business model for them, which involved generating investment by inviting the community to become shareholders. “It’s because of that support that I’ve kept going,” said Operations Manager Marguerite Pearce. “We’re very lucky… I’m over the moon.”

As well as supporting and promoting local businesses, they are occupying a previously empty property, helping to drive footfall in the town centre. More local people have asked to become shareholders and they are planning their second community share offer – to support the sustainability of the business through buying a community-owned building.

We are confident that the learning and impact from this successful project means Wales is well-placed to continue to benefit from the community shares model and will use this as a model of choice when financing their social ventures in the future.

Supporting communities to create sustainable prosperity

Communities need to be supported through the challenging period ahead. Facilitating community shares can be at the heart of a new approach to economic development in Wales that prioritises well-being and makes sustainable prosperity possible. It is one way we are supporting the re-balancing of local economies so that it puts people and planet first.

This report is an opportunity to celebrate the project and the inspirational communities and social enterprises it has supported, while demonstrating what Wales could look like in the future – with an economy and society that works differently, for our collective social and economic benefit.

The Community Shares Wales Resilience Project came to an end in January 2024. Cwmpas is still offering support to those in Wales who want to set up a community shares scheme through our Pembrokeshire Community Asset Transfer programme funded by UK Government’s Shared Prosperity Fund. Get in touch.