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| Version 1 | Version 2 |
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| People power: how cash-strapped councils are turning to crowdfunding | People power: how cash-strapped councils are turning to crowdfunding |
| (5 months later) | |
| As local government budgets are stripped back across the UK, city councils are turning to crowdfunding as a way for communities to support major projects | |
| John Keenan | |
| Tue 5 Sep 2017 07.15 BST | |
| Last modified on Tue 5 Sep 2017 16.47 BST | |
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| The Victorians built their public structures to last, but they didn’t lose a lot of sleep over the cost of long-term maintenance. | The Victorians built their public structures to last, but they didn’t lose a lot of sleep over the cost of long-term maintenance. |
| The Madeira Terraces on the east of Brighton’s seafront were built in the mid-1800s and have formed the backdrop to the National Speed Trials, Brighton Marathon and a host of other public events. But over the years, the cast iron has taken a battering from storms across the channel and has been sorely neglected, leading to their closure in 2013. | The Madeira Terraces on the east of Brighton’s seafront were built in the mid-1800s and have formed the backdrop to the National Speed Trials, Brighton Marathon and a host of other public events. But over the years, the cast iron has taken a battering from storms across the channel and has been sorely neglected, leading to their closure in 2013. |
| The dangerously decrepit terraces are a sad contrast to Brighton’s glitzy attractions, such as the i360 observation tower on the main drag. This vital restoration work is the council’s responsibility, and the final bill could be as much as £30m. | The dangerously decrepit terraces are a sad contrast to Brighton’s glitzy attractions, such as the i360 observation tower on the main drag. This vital restoration work is the council’s responsibility, and the final bill could be as much as £30m. |
| Last year, Brighton and Hove council lost out in a bid for government funding to fix the problem and has now launched a crowdfunding appeal. At the time of writing, it has raised £157,193 of its £430,669 target, including a contribution of £100,000 from the council. The closing date for the campaign is 30 November. | Last year, Brighton and Hove council lost out in a bid for government funding to fix the problem and has now launched a crowdfunding appeal. At the time of writing, it has raised £157,193 of its £430,669 target, including a contribution of £100,000 from the council. The closing date for the campaign is 30 November. |
| By 2020 168 councils in England will have lost 75p out of every £1 of central government funding that was able in 2015 | By 2020 168 councils in England will have lost 75p out of every £1 of central government funding that was able in 2015 |
| Anyone who pledges £2 or more will become a “friend” of Madeira Terraces and will be eligible to vote on which businesses will move into the first three restored arches. A pledge greater than £5,000 will earn a name on a large plaque on the terraces. The crowdfunding scheme is organised by funding platform Spacehive, which will be paid around £15,000 if the campaign is successful. No money will be taken from donors until the total is reached. | Anyone who pledges £2 or more will become a “friend” of Madeira Terraces and will be eligible to vote on which businesses will move into the first three restored arches. A pledge greater than £5,000 will earn a name on a large plaque on the terraces. The crowdfunding scheme is organised by funding platform Spacehive, which will be paid around £15,000 if the campaign is successful. No money will be taken from donors until the total is reached. |
| Like many councils across the country, Brighton and Hove is under huge financial pressure. By 2020, 168 councils in England – almost half the total – will have lost 75p out of every £1 of central government funding that it was able to spend in 2015, according to the Local Government Association. Local authorities are left facing a £5.8bn funding gap in the next three years. | Like many councils across the country, Brighton and Hove is under huge financial pressure. By 2020, 168 councils in England – almost half the total – will have lost 75p out of every £1 of central government funding that it was able to spend in 2015, according to the Local Government Association. Local authorities are left facing a £5.8bn funding gap in the next three years. |
| Many councils are now turning to civic crowdfunding to fill the gaps. In Manchester, for example, a council-led initiative is raising money for a range of projects from a community orchard (where £12,195 was pledged) to restoring the derelict Grade II-listed Ancoats Dispensary (which reached its £368,283 funding goal). | Many councils are now turning to civic crowdfunding to fill the gaps. In Manchester, for example, a council-led initiative is raising money for a range of projects from a community orchard (where £12,195 was pledged) to restoring the derelict Grade II-listed Ancoats Dispensary (which reached its £368,283 funding goal). |
| This year, the mayor of London, Sadiq Khan, launched Crowdfund London as a way for communities to come up with ideas to regenerate local areas with the support of City Hall. Crowdfunding is inspiring “a new generation of civic leaders and helping them unlock creative and innovative ideas for their communities”, Khan said. | This year, the mayor of London, Sadiq Khan, launched Crowdfund London as a way for communities to come up with ideas to regenerate local areas with the support of City Hall. Crowdfunding is inspiring “a new generation of civic leaders and helping them unlock creative and innovative ideas for their communities”, Khan said. |
| Among the 25 projects in the pipeline is the Southall Light Show, which will receive £12,500 from the mayor to help create a series of light installations and workshops to celebrate Southall’s diversity and heritage. The project raised £29,907 from crowdfunding. | Among the 25 projects in the pipeline is the Southall Light Show, which will receive £12,500 from the mayor to help create a series of light installations and workshops to celebrate Southall’s diversity and heritage. The project raised £29,907 from crowdfunding. |
| Meanwhile, the Ladywell Self-Build Community Space in Lewisham will receive £30,000 from City Hall to support a space for local people to learn about community-led housing and sustainable living. The Camden Highline will also be funded £2,500 for the conversion of a disused overground rail line between Kings Cross and Camden. | Meanwhile, the Ladywell Self-Build Community Space in Lewisham will receive £30,000 from City Hall to support a space for local people to learn about community-led housing and sustainable living. The Camden Highline will also be funded £2,500 for the conversion of a disused overground rail line between Kings Cross and Camden. |
| “I’m calling on Londoners to join me and help make these projects a success,” Khan said. | “I’m calling on Londoners to join me and help make these projects a success,” Khan said. |
| In Brighton, councillor Warren Morgan argues that raising the money for the Madeira Terraces through “people power” will help to persuade the Heritage Lottery Fund to back the work with the millions of pounds needed. | In Brighton, councillor Warren Morgan argues that raising the money for the Madeira Terraces through “people power” will help to persuade the Heritage Lottery Fund to back the work with the millions of pounds needed. |
| “Saying what should be done is easy and usually involves stating the obvious. The ‘how’ is more difficult,” he says. “As a listed structure, any changes are problematic and would need the consent of English Heritage. It will need some imagination, innovation and flexibility to make the kind of investment in the terraces which might generate sufficient funds for the required work and future upkeep.” | “Saying what should be done is easy and usually involves stating the obvious. The ‘how’ is more difficult,” he says. “As a listed structure, any changes are problematic and would need the consent of English Heritage. It will need some imagination, innovation and flexibility to make the kind of investment in the terraces which might generate sufficient funds for the required work and future upkeep.” |
| Morgan is adamant that the council’s aim is to save the structure, rather than make a return for investors. | Morgan is adamant that the council’s aim is to save the structure, rather than make a return for investors. |
| This idea of “people power” as a model for funding major projects provides an alternative to the much-criticised private finance initiative (PFI) model, where a private company provides the up-front costs. | This idea of “people power” as a model for funding major projects provides an alternative to the much-criticised private finance initiative (PFI) model, where a private company provides the up-front costs. |
| “The problem with PFI was the contracts were often complex and people couldn’t see the real cost,” says Bruce Davis, founder and managing director of Abundance Investment. “Through crowdfunding, the capital for a GP surgery, for example, could be provided by ordinary people.” | “The problem with PFI was the contracts were often complex and people couldn’t see the real cost,” says Bruce Davis, founder and managing director of Abundance Investment. “Through crowdfunding, the capital for a GP surgery, for example, could be provided by ordinary people.” |
| He says the company is talking “to a number of councils about expanding the role of crowdfunding to a range of social infrastructure projects which would allow the community to invest directly in their local quality of life, economy and environment”. | He says the company is talking “to a number of councils about expanding the role of crowdfunding to a range of social infrastructure projects which would allow the community to invest directly in their local quality of life, economy and environment”. |
| “Councils need help to build knowledge and capacity in this area to make sure that projects are structured in a way which fits with their own financial requirements and in the interests of citizen investors,” Davis says. | “Councils need help to build knowledge and capacity in this area to make sure that projects are structured in a way which fits with their own financial requirements and in the interests of citizen investors,” Davis says. |
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