The timing could hardly have been more perfect.
On the first anniversary eve of the Financing for Society report being published, last night (30 April) West Berkshire Council voted to approve the UK’s first Community Municipal Investment (CMI) – the new model of public finance co-created through research led by Dr Mark Davis in partnership with the crowdfunding platform, Abundance Investment.
Individuals both in and outside of West Berkshire will now be able to invest in a new ‘community bond’ from as little as £5 to support specific projects that align with the council’s declaration of a Climate Emergency in July 2019 and its subsequent Environment Strategy.
The community bond will allow residents to invest in green infrastructure projects – such as installing rooftop solar panels on a building at Greenham Common and on the rooftops of local schools. In return for supporting the council’s aims to become carbon neutral by 2030, investors will receive a long term, low risk return.
As developed in Dr Davis’s research, the CMI is a bond or loan mechanism issued by a council directly to the public and administered by Abundance, who are regulated by the Financial Conduct Authority.
CMIs can be used to supplement, diversify or replace sources of borrowing to fund specific infrastructure projects, or to refinance existing debt.
On the announcement, Dr Davis said:
“First of all, I congratulate the council team at West Berkshire for having the ambition to pursue a Community Municipal Investment to support their climate targets. We know that local authorities are on the front line of some of the biggest social and environmental challenges our communities face. At the same time, they have lost around 60p in the £1 of central funding since 2010 and had their usual borrowing channels impacted by rate changes and the COVID-19 pandemic. As high-street banks continue to cut interest rates for savers to near zero, the ‘community bond’ we developed in our research with Abundance is intended to get a better long-term return for people, at the same time as helping to finance local projects that otherwise wouldn’t happen and that will directly benefit communities.”
Ross Mackinnon, West Berkshire’s Executive Member for Finance, said:
“The Community Municipal Investment is a unique way to invest in West Berkshire. It puts residents’ money to work where it will make a positive contribution toward our target to be carbon neutral by 2030.”
Steve Ardagh-Walter, West Berkshire’s Executive Member for the Environment, said:
“This scheme has great potential and will enable the council to take on additional green projects and enable us to move towards carbon neutrality sooner. This is a priority for each and every one of us.”
To find out more about the specific investment opportunity being offered by West Berkshire Council, visit the Abundance platform by clicking here.
To learn more about the underpinning research that created the Community Municipal Investment, and to use the decision-tool developed for councils to assess the model against their own project delivery scenarios, visit the Financing for Society website by clicking here.