Community Economic Development

Present: Barnett, Donna; Bremner, Melissa; Clark, George; Peden, Bob; Rennie, Joan;

Apologies: Leece, Duncan; McKenzie, Alison; Simpson, Alison;

A Range of Community Activities
Towards a definition of CED
Support to CED – you only have to ASK
Match funding and contributions in kind
Social Capital and the Social Economy
The problem with money
The way ahead – managing change

Given the unavoidable absence of three staff members the session on ‘Effective Meetings’ was postponed and in its place Donna asked George to lead an impromptu and interactive session to explore the concept of Community Economic Development.

A Range of Community Activities

George introduced the session by suggesting that it was useful to think of community groups being active in a range of very different ways.

Community group activities – from micro to macro
MICRO		MACRO
Community development		Community economic development
small scale activities		large scale activities
needs low level skills		needs high level skills
needs little outside support		needs external support
informal organisational structure		formal organisational structure
works in isolation		works in partnership
e.g. planting a few trees round the car park		e.g. converting a harbour into a marina

Towards a definition of CED

Development involves change for the better. Economic Development involves change that is financially self-supporting (at least indirectly). Community Economic Development is about self-sustainable change for the better that is managed by open and accountable community groups operating, usually, in not-for-private-profit mode (i.e. the profits are ploughed back into the group rather than being pocketed by the boss or paid out to shareholders). [See www.CEDScotland.org ]

At first we thought that many of the micro level activities (e.g. Brownies and the WRI) should not be thought of as CED activities. But this depends on how we measure economic impact. The indirect benefit of many community activities is to make the place more attractive both to visitors and potential new residents. If the activity attracts more people and they spend money then it has an economic impact.

The fact that it is very difficult to put accurate numbers on these indirect benefits does not mean that the benefits should be ignored – although this is what many hard-nosed and short-sighted economists try to do. The more up-to-date and holistic economic paradigms embrace ‘externalities’ and give a new meaning and rigor to the concept of cost-benefit analysis. These changes in the underlying theory and policy are reflected in the increasing attention being given to Social and Environmental Auditing.

[see –

Alana Albee – Assessing impact – some current and key issues – www.caledonia.org.uk/pia.htm

George Clark - Social Auditing – feedback control for organisations – www.caledonia.org.uk/social2.htm ]

Local Agenda 21 calls for integration between social, economic and environmental issues but this is not a problem because it is in fact very difficult to separate them. CED is about making a life as well as a living and improving amenities and informal services forms a large part of making the area more attractive for living.

Support to CED – you only have to ASK

BPL does not run projects. It offers information, training and support to community groups that are designing and managing projects. But there are limits on what we can do to change the attitudes, skills and knowledge (ASK) of group members. We provide information, offer advice and sometimes provide some more or less formal training.

Some groups, especially those at the micro end of the range, are happy on their own. Several of them have an excellent track record and are very canny in what they do. Most of them gather all the funding before they begin a project and do not get involved with borrowing or lending. There is no problem with this except that the lack of strategic thinking within the groups means that they are missing opportunities for match funding.

Match funding and contributions in kind

It is rare for funders to give a group all the money it needs to complete a project. The group is usually expected to raise at least part of the funding on its own and/or from other funders.

Most funders prefer giving money for one-off, capital things like machines and buildings because it is relatively easy to ‘account’ for the spending. It is not so easy to find funders willing to support recurrent expenses such as for staff salaries or the maintenance of equipment and buildings – especially in the long term.

In match funding arrangements the community group has to raise some of the money for itself. Coffee mornings, quiz nights, discos etc can gradually provide some of this but there is also the possibility for contributions in kind and these take various forms:

When local business people provide materials and services they can invoice the project for the real cost of their contributions without expecting to be paid.
When volunteers work for the project they can keep time sheets so that their efforts can be costed at so much per hour. (Some of the EU funders publish hourly rates for different grades of volunteers)

These contributions in kind are very real and when a price is put on them they can mount to considerable sums that some external funders are willing to match.

Social Capital and the Social Economy

These days there is talk of globalization. The pattern of how things are bought and sold is changing rapidly. The rich (both within nations and between them) are getting richer and the poor are getting poorer.

The Social Economy can be defined as that part of the economy which is neither private nor public, but consists of constituted organisations, with voluntary members and boards of directors or management committees, undertaking activities for local benefit. These organisations can employ paid staff (full and/or part time) and can trade in the market place, but the motivation is that of community benefit rather than the creation and distribution of private profit.

Source: www.caledonia.org.uk/social1.htm

If we view the world as multi-layered and necessarily interdependent - ranging from the trans-national corporation through national and regional enterprise to small business, the community and the household economy - it does not follow that any part is more important than any other, especially as regards contributing to human and planetary well-being. The analytical framework of the Social Economy uses this as its base, and attempts to bring all parts of the world economy under the influence of values of people-centred development.

Social Capital is the 'glue' that holds families, groups and society together. It refers to the shared beliefs, customs, and habits that help people work together effectively in formal and informal groups. It can apply at the village level but also at the regional, national and international levels.

Source = Tanzania without Poverty
www.hakikazi.org/eng

Civil Society Organisations include formal organisations that are registered by Government, and many kinds of informal organisations. They include charity organisations, religious institutions, activist groups, pressure groups, academia, and special interest groups such as trade unions and student movements. Informal organisations include Upata groups, mutual aid groups, ethnic-based welfare societies, football clubs organised by young men and netball clubs organised by young women.

Many local shops have had to close down – the pattern of retailing is changing.

For example companies with a large number of retail outlets are linking them by computer to the HQ, a small team of people then bulk buy on a massive scale. The goods are then distributed by a contracted goods carrier. The organisation has very low overheads and thrives by having a low profit margin on a large quantity of goods.

The problem with money

George, who has recently written a book called, Tanzania without Poverty, (www.hakikazi.org/eng) noted that poverty did not really begin in a big way in Africa until changes in the land laws and taxation system forced everyone to need money to survive. This removal from self sufficiency made people easy victims to trade agreements that could change the price of goods bought and sold at the whim of some policy making group more or less overnight.

Banks lend money only to those who already have it. It can be tough for people living in rural area who do not have cars, computers or credit cards. But, as Alison and Bob found when trying to justify the Quarterdeck project, it is difficult to find disaggregated figures to establish the extent of rural poverty in this part of Aberdeenshire.

Credit Unions and Local Exchange Trading Systems (LETS) have been tried with varying degrees of success in various parts of the world but have not caught on in Aberdeenshire.

[see Graham Boyd – The urban social economy sector – www.caledonia.org.uk/social1.htm

Basic cooperative principles and their social economy equivalents – www.caledonia.org.uk/comparis.htm ]

Fishing and farming are on the decline, local shops are closing and young people have to leave the area to find good jobs. Donna mentioned that in Ireland grants have been made available to young people who want to go back to their rural roots and set up ICT based businesses. There is no such policy at present for this area. Things are looking bleak and community economic development is one of the few viable options for creating jobs and providing services.

The practicalities behind CED include using the same set of buildings for many purposes so that the overheads can be shared, and making good use of part time and/or volunteer labour by way of cutting overheads. And, crucially, the CED organisations will be not-for-private-profit.

The way ahead – managing change

We saw in an earlier training session that several models for CED organizations are evolving in the BPL area. There are few failsafe blueprints and no easy answers. We must keep working at it and taking time now and again to reflect on what we are doing so that we can learn lessons and change direction if need be. (We will soon be able to report on the findings from the 16 case studies of local groups.)

It may be that our biggest challenge is with attitudes. Many people believe that the changes taking place are inevitable and designed in heaven (or hell as the case may be). But the only constant thing is change and the only certainty is doubt. Change can be managed and it is best to manage our own change. If we allow others to manage it for us we will suffer – most of the relevant decision makers are rich folk from the cities who do not understand the claims, concerns and issues facing poor folk in the rural areas.

We are a’ Jock Tamson’s bairns. We should be proud rather than apologetic about that happy state of affairs. Participants at recent BPL Tourism Forum meetings noted that visitors are invariably impressed with the people, culture and landscape of the NE. We are different and distinctive. We have a ‘product’. Can we package and sell it without spoiling it? Might this be a foundation stone of CED in the next phase of our cultural evolution?

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