Building fairer foundations

We are keen to support or work with other anchor institutions who choose to take steps of their own to support and grow the foundational economy. Based on the research we have undertaken, we have made some suggestions below, which we are currently looking at taking in Karbon Impact Areas but there are many more ways in which employers, local institutions and civic society can support the foundational economy.

1. Employers should resist any move towards zero hours contracts or at the least offer a minimum number of hours per week to employees. Without a source of secure, sustainable employment and regular wages, household finances are near impossible to manage. Households are unable to plan beyond the short term and budgeting for essentials, like rent and utilities, becomes difficult.

2. Employers can invest in ‘grow your own’ employment initiatives. These include targeted apprenticeships and placements for people in areas of high unemployment and for older candidates with limited academic qualifications. These initiatives can help address the record numbers of unfilled roles in healthcare, hospitality and retail.

3. Housing associations and major employers should look to help customers and colleagues to overcome barriers to travelling from left behind places to key employer locations such as retail parks and industrial estates. This will directly increase the residual income of employees, expand the pool of people available to work in these locations and enable those disincentivised by transport costs to find better paid jobs further from home.

4. Major employers and local agencies should consider support for childcare outside school hours, such as holiday clubs and after school activity clubs. This will make a direct contribution to the foundational economy in left behind places and increase the number of people able to add to their working hours or work further afield.

5. Focus hardship fund initiatives on left behind places. Hardship funds make a vital difference to households grappling with cost-of-living challenges. To have greatest impact and leverage the positive effects in the foundational economy, we encourage those setting up hardship funds to focus these personal interventions in specific left behind places.

6. Local authorities and major employers can support the regeneration of high streets by colocating service points together on district high streets, where there is demand for face-to-face services. This increases accessibility for local people and makes it possible for more people to work or take higher paid jobs.

7. Invest in employability support in left behind places. This can include skills training, mentoring and specialist mental health support. At Karbon Homes, we worked with a range of social housing providers and local authority partners, funded by the Community Renewal Fund, to offer a work placement scheme, called New Start, for social housing residents in the North of Tyne Area, with a particular focus on the left-behind areas of Byker, Blyth and North Shields.

8. Upgrade social infrastructure in social housing estates in left behind places. Investment in these places will bring about best returns due to the multiplier effect in the foundational economy.

9. Invest in decarbonisation measures. Ensure that homes and offices meet net zero requirements, providing warmer, more energy efficient homes that will save residents money and creating more sustainable places to live and work in the area.

There is much that anchor institutions can do to improve the prospects of left behind places across the UK. But these efforts and others would start from a better place with some changes to national policy.

1. Reform the tax and benefit system. This is difficult work, with tough political implications, but the unintended consequences of a system that disincentivises low-income households to better their circumstances is badly in need of change. Practical and immediate steps to improve residual income would be to:

• reduce the Universal Credit taper rate for low income, in-work households
• lift benefits for those unable to work, including carers and the sick and disabled, so that they can rely on a living wag

2. Rebalance investment to support more affordable housing, to provide a strong foundation for more low-income households in left behind places.

3. Provide central funding to subsidise public transport provision in targeted, left behind places to stimulate the local economy and provide more choice and opportunity to low-income households.

4. Support and encourage the development of robust social value reporting frameworks to enable more rigorous monitoring and evaluation of spending and policy interventions in housing and placemaking. This will help build understanding of the contribution housing and placemaking are making to left behind areas and help lay the ground for those bidding for public money to invest in areas where the benefits are considerable but not immediate

5. Engage with housing associations, social and institutional investors and experts in the social impact field, to identify ways in which public, commercial and impact investment capital can be better aligned to support regeneration. These might include tax incentives and government investment guarantees to de-risk aspects of regeneration projects and attract large scale institutional capital into place-based impact investing vehicles.

6. Continue and accelerate the welcome change in grant funding rules towards greater devolution and area-based criteria, rather than national financial metrics (such as the previous “80/20 rule” applied to Homes England funding)

7. Provide additional flexibility to allow Homes England capital grant to be spent on acquiring, retrofitting and refurbishing existing housing stock in places where ‘net additionality’ rules are not appropriate because of low market demand.