New research by Plunkett Foundation has shown that community businesses are committed to social and environmental action despite facing multiple challenges which are threatening the economic viability of many businesses UK wide.

The recently published report provides a state-of-the-sector view on how community businesses are responding to the cost of living and climate crises.

Putting People First

The sector has been negatively impacted by inflation and rising costs; however, the research shows that community businesses continue to put people first. Even though as many as 1 in 3 are concerned about the next 12 months, over 50% of businesses have awarded cost of living pay rises to staff. Whilst two thirds of businesses have absorbed costs to maintain affordability of products and services for their community.

Sector Growth

At the end of 2022, a year in which the sector had grown by 3% with 27 new businesses opening, the number of trading community business stood at 768 – with community-owned pubs by far the fastest growing business type. 35% of all enquiries received by Plunkett Foundation last year were from groups wanting advice on how to safeguard their local pub, and 14 new community pubs opened in 2022.

Climate action

Motivated by a mixture of reducing the operating costs and a commitment to climate action, the research has shown strong support amongst community businesses for installing Energy Saving Measures (ESMs) and making improvements to business premises. 85% of businesses surveyed have either installed or are currently considering installing ESMs. As a commitment to climate action 72% of businesses surveyed state that they were proactively ‘sourcing locally’ for goods and products as part of their operation. Whilst 44% are taking action to reduce their waste (e.g. reducing use of packaging).

Short-term concern

Positively, 58% of businesses surveyed state that they believe they are more resilient due to being a community-owned business. However, the report does indicate short-term concern for the sector, with the majority businesses stating that rising wholesale prices and overhead costs, coupled with lower customer spend will detrimentally impact their turnover and profitability. Plunkett remains acutely aware of this situation and will continue to offer advice and support to all businesses via the universal community business service.

Key Findings from the research

• Inflation and rising costs have significantly impacted community businesses, particularly as small businesses commonly based in rural areas.
• Despite financial pressures, community businesses continue to put people first, by providing essential services, fair employment and inclusive opportunities.
• Community businesses are proactive about improving their energy efficiency and there is appetite to do more, but they face multiple barriers.

Chief Executive of the Rural Services Network, Kerry Booth says: “This report highlights the vital role that community businesses play in our rural communities not only in delivering key services but over half of community businesses responding to the survey said they offered other specific support or activities for people who may be experiencing social exclusion helping rural communities who may have a lack of other services or transport options, feel connected.”

You can download the report at this link

Plunkett Foundation are a member of the Rural Services Partnership and a charity with the aim of assisting rural communities to crate and run community owned businesses.