Millions of pounds have been allocated to socially trading organisations in Liverpool, a sector employing 50,000 people across the city region,
The £5.5m funding to establish a new body called 'Kindred' was announced by Metro Mayor Steve Rotheram following approval from the combined authority at its meeting last week.
Kindred is a social investment vehicle aiming to support the growth of the social economy in the city region, and has been established with the help of a further £1m boost from independent trust Power to Change.
The sector employs one in ten of the city region’s workforce, with 1,300 socially trading organisations generating £2.9bn per year for the city region economy.
Speaking about the funding, Mayor Rotheram said: “Our region’s social businesses are the often under-appreciated engines of our economy, delivering economic and social value worth almost £3bn every year.
“Our recovery has to be built from the bottom up – as a combined authority we can act as an enabler, but we do not have the monopoly on good ideas.
"Because of devolution, we are able to work alongside our socially trading sector to understand their needs and challenges and have been able to tailor our response around that.
“The result is Kindred. Owned and managed by the sector, it will offer social investment and peer-to-peer support for other community businesses, with the aim of generating good growth whose benefit is felt most by the people at the heart of their communities.
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“The pandemic showed everyone how vital the socially trading sector is – we are determined to protect and grow it as part of our economic recovery plans.
"We cannot Build Back Better without building with our socially trading sector.”
The combined authority said on Monday its Building Back Better scheme, the economic recovery plan for the city region, "clearly identified" socially trading organisations as having a "clear and important role" to play in generating growth while also helping to achieve a fairer and more inclusive economy.
Since October 2019, the authority has worked with a founding team to develop Kindred as a new investment and development vehicle, owned and run by the sector, that will provide business support and funding to community businesses.
After consulting with more than 150 socially trading organisations, Kindred was created earlier this year, and will be developed by and owned by the sector.
Throughout the pandemic, Kindred has provided business support for around 200 socially trading organisations across the city region, as the combined authority and Power to Change fast-tracked plans due to launch in the autumn.
Businesses already being supported by Kindred include cycling firm Peloton and brewing firm Homegrown Collective.
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Vidhya Alakeson, CEO of Power to Change, strategic partner and co-investor in Kindred, said: “Kindred is a bold, innovative initiative that puts a vibrant social economy at the heart of the City Region’s economic plan.
"Community businesses and other socially trading organisations are not a nice to have, they are an important contributor to a more inclusive economic recovery.
"By investing in Kindred, Liverpool City Region is spearheading a new approach that has the potential to reinvent local economic strategies across the country.”
Erika Rushton is director of the Baltic Creative, and has been commissioned to deliver the set up and delivery of Kindred.
She said: “Approval for Kindred couldn’t have come at a better time, or a worse time.
“Despite improving prosperity in the city region, the pandemic highlighted just how fragile our economy was and how reliant we had become on large organisations and long supply chains that couldn't, or didn't, respond to our everyday needs.
"Socially-trading organisations stepped in and stepped up. Collectively they now offer Liverpool City Region the means of finding new purpose for redundant buildings, new roles for unemployed people, of reinvigorating our high streets and harnessing the inherent social entrepreneurialism that flows throughout the city region’s heritage to deliver a kinder and more inclusive economy.
“Kindred was designed by, is collectively owned by, and will invest and reinvest in socially-trading organisations in the Liverpool City Region. I look forward to the day when Kindred and social trading is the norm.”