Social Innovation in the Community Asset Market
Lead Research Organisation:
University of Liverpool
Department Name: Management School
Abstract
The community asset 'market' causes problems to the three main stakeholders. First, an insufficient supply to meet the demand for space from social enterprise. Second, anchor institutions committed to asset transfer find the current process inefficient and high risk. This is because many social enterprises have what is regarded as a weak balance sheet history. For the same reason, social investors who are keen on seeking social impact from their investments, are concerned with the means of investing into individual social enterprises. We propose a solution to these problems.
We aim to broker asset transfer, significantly reducing the risk of transfer and investment. We will use detailed local knowledge to provide assets of an appropriate size and location, co-designed with social enterprises, ensuring development fits the resources available. The community asset holding company will generate revenue through rental income for assets and services needed by social enterprise, developed on the expertise of the partner Kindred-LCR. We assist the social enterprise in building its balance sheet and ensure the asset as security for future development.
Our 2017 research identified two areas that prevented growth in the social enterprise sector in Liverpool City Region. First was the adequate provision of appropriate social finance and second, was the supply of commercial and community space. This research was developed in 2019 and again in 2021 with further insights showing how growth and financial sustainability could be achieved amongst social enterprise. In 2023 we looked specifically at asset ownership and outlined a blueprint for successful community asset transfer.
Our research has shown that 53% of social enterprises are in communities defined as the most deprived, including the hardest to reach groups in migrant and BAME communities. We demonstrate that if £32m of assets were made available to city region social enterprises, from the £8bn worth held by anchor institutions in the city region, then up to £100m of extra income and 2,750 additional jobs could be created.
By holding the asset, the company will provide a more effective use of currently under-utilised assets, and commensurate generation of significant social impact. The company will negotiate a transfer of assets for below-market, and where possible nominal, values. The company will charge affordable rents (for the new space) to social enterprises and provide business services that closely match their needs. This will ensure rental income is stable and voids are minimised.
Demand for property from social enterprises provides a market to enable fixed costs to be spread across multiple properties, revenues to be generated from a range of different property types and tenures, and scope for significant economies of scale to be realised by the company. As a not-for-profit organisation, any surpluses will be reinvested for the benefit of LCR's social enterprises with no distribution of dividends to external shareholders. The company will operate sustainably, while investors providing loans to the company will achieve stable income from a sizeable asset-backed organisation and significant social impact.
We aim to broker asset transfer, significantly reducing the risk of transfer and investment. We will use detailed local knowledge to provide assets of an appropriate size and location, co-designed with social enterprises, ensuring development fits the resources available. The community asset holding company will generate revenue through rental income for assets and services needed by social enterprise, developed on the expertise of the partner Kindred-LCR. We assist the social enterprise in building its balance sheet and ensure the asset as security for future development.
Our 2017 research identified two areas that prevented growth in the social enterprise sector in Liverpool City Region. First was the adequate provision of appropriate social finance and second, was the supply of commercial and community space. This research was developed in 2019 and again in 2021 with further insights showing how growth and financial sustainability could be achieved amongst social enterprise. In 2023 we looked specifically at asset ownership and outlined a blueprint for successful community asset transfer.
Our research has shown that 53% of social enterprises are in communities defined as the most deprived, including the hardest to reach groups in migrant and BAME communities. We demonstrate that if £32m of assets were made available to city region social enterprises, from the £8bn worth held by anchor institutions in the city region, then up to £100m of extra income and 2,750 additional jobs could be created.
By holding the asset, the company will provide a more effective use of currently under-utilised assets, and commensurate generation of significant social impact. The company will negotiate a transfer of assets for below-market, and where possible nominal, values. The company will charge affordable rents (for the new space) to social enterprises and provide business services that closely match their needs. This will ensure rental income is stable and voids are minimised.
Demand for property from social enterprises provides a market to enable fixed costs to be spread across multiple properties, revenues to be generated from a range of different property types and tenures, and scope for significant economies of scale to be realised by the company. As a not-for-profit organisation, any surpluses will be reinvested for the benefit of LCR's social enterprises with no distribution of dividends to external shareholders. The company will operate sustainably, while investors providing loans to the company will achieve stable income from a sizeable asset-backed organisation and significant social impact.
Organisations
People |
ORCID iD |
Alan Southern (Principal Investigator) |
Description | A spin out company will be established in the spring of 2025 that will broker the transfer of assets from anchor institutions (ie local authorities, housing associations) to social enterprises. This company is to operate within the Liverpool City Region. It will work with social enterprise - anchor institution - and social investor to enable the transfer. |
Exploitation Route | By the registration of a Community Asset Holding Company. When formed, later in the spring of 2025, the work it will engage in will bring social impact and economic inclusion. It will be an integral part of a wider £50m investment into Liverpool City Region social enterprise sector (the social economy). |
Sectors | Communities and Social Services/Policy Construction Creative Economy Education Energy Financial Services and Management Consultancy Healthcare Leisure Activities including Sports Recreation and Tourism Government Democracy and Justice Culture Heritage Museums and Collections Retail Transport |
Description | Yes. The findings have encouraged social investors to bring their investment into Liverpool City Region. This is because a key output from the project is the formation of a new start-up business, a Community Asset Transfer Holding Company. Our findings were irrefutable in that it showed (i) the value of dormant assets (ii) the desire to transfer these assets by the holders (iii) the need for the assets from social enterprises (iv) the social and economic impact to be garnered when asset transfer took place over a period of time. Ultimately, the main non academic impact is the formation of HoldCo, the Community Asset Transfer Holding Company. |
First Year Of Impact | 2025 |
Sector | Communities and Social Services/Policy,Construction,Creative Economy,Digital/Communication/Information Technologies (including Software),Education,Energy,Environment,Financial Services, and Management Consultancy,Healthcare,Leisure Activities, including Sports, Recreation and Tourism,Government, Democracy and Justice,Culture, Heritage, Museums and Collections,Retail,Transport,Other |
Impact Types | Societal Economic Policy & public services |
Description | Work with the Liverpool City Region Combined Authority |
Geographic Reach | Local/Municipal/Regional |
Policy Influence Type | Contribution to new or improved professional practice |
Impact | Through the impact of our research and wider work on the 2,000 social enterprises in the Liverpool City Region, who are now able to access social finance in a more efficient manner and are in the process of being able to access assets for transfer or purchase to support their work. The impact from this is to build financial resilience in individual social enterprises. Collectively, across the city region, this means higher levels of employment, enhanced access to services contracted from the public sector to social enterprises, greater productivity and increased opportunity for wealth creation. |
Description | Community Asset Holding Company Reference Group |
Form Of Engagement Activity | A formal working group, expert panel or dialogue |
Part Of Official Scheme? | No |
Geographic Reach | Regional |
Primary Audience | Industry/Business |
Results and Impact | We established a Community Reference Group to advise us on our work to establish a Community Asset Holding Company. We meet on a regular basis over a 12 month period and continue to meet as the business start up is to be launched. |
Year(s) Of Engagement Activity | 2024,2025 |
Description | Social Investment Pathfinder |
Form Of Engagement Activity | A formal working group, expert panel or dialogue |
Part Of Official Scheme? | No |
Geographic Reach | Regional |
Primary Audience | Industry/Business |
Results and Impact | The Social Investment Pathfinder included the PI as a critical component to bring in up to £50m into the Liverpool City Region for social investment. The group included social investors, social business support agencies, housing associations and our partners in the work, Kindred-LCR. We have played a crucial role in this partnership and expect to see impact in the format of new social investment into the city region. |
Year(s) Of Engagement Activity | 2024,2025 |