01 Jul Everybody needs good neighbourhoods

Our new research for Local Trust, in collaboration with OCSI (Oxford Consultants for Social Inclusion), provides some of the strongest evidence to date about the specific effects of neighbourhood-based programmes compared to places with no history of neighbourhood initiatives. We hope these findings will inform investment decisions among councils in receipt of Spending Review 2025 neighbourhood investment, as well as those looking at neighbourhood-based governance in new unitary areas.

Neighbourhood investment is firmly back on the Treasury agenda with £2bn committed so far:
• This spring the Plan for Neighbourhoods announced £20m each for 75 places (although it was partly a re-badge of the Towns Fund)
• In June 25 Trailblazer Neighbourhoods were announced with £20m each
• Plus the Spending Review committed to investing in a further 350 deprived communities across the UK

Renewed policy focus on neighbourhood investment seems driven by three factors (1) the success of the resident-led Big Local programme between 2010-2025 in rebuilding social capital in left-behind communities (2) growing NHS commitment to “integrated neighbourhoods” and “local area coordination” in places like Leicester, Birmingham, South Tyneside (3) as a counterbalance to the creation of new unitaries which will for many people will mean their local government institutions become larger and more remote.

But despite this there are gaps in the evidence base. Neighbourhood initiatives have been associated with positive outcomes around the local environment and community pride – but were these outcomes the result of neighbourhood working, and what about other outcomes especially economic ones?

For the past two years we have been working with Local Trust and OCSI to answer the question “has there been a difference in outcomes between disadvantaged areas with neighbourhood initiatives and areas which are similar but with no neighbourhood initiatives” or to use HMT Green Book language, between those with and without a neighbourhood “treatment”?

After two years we can share the results, and the evidence is very clear. It was hard at times to believe that the more data we added, the stronger the findings became, but what we have found are statistically significant differences in outcomes between disadvantaged Wards that have had neighbourhood interventions, and counterfactual benchmarks that have not. How do we know the counterfactuals haven’t had neighbourhood intervention? Because we went through each and every one looking for signs of neighbourhood management – sorting them into ‘treatment’ or ‘no treatment’ buckets. Our definition of “treatment” were initiatives that were long-term or permeant, focused on a neighbourhood scale, that foster community development and advocate for community needs across a broad range of issues.

What we found:
• Business activity grew faster – areas with neighbourhood-led initiatives saw the local business numbers grow by 41 percent, compared to only 22 percent in the counterfactual areas.
• Child poverty was mitigated – while child poverty worsened everywhere between 2014 and 2021, in areas with neighbourhood working it grew by 5.5 percentage points, compared with 8 percentage points in counterfactual areas.
• Crime reduction was greater – overall crime rates fell by 19.1 offences per 1,000 population in areas with neighbourhood working compared to a fall of only 10.5 in the counterfactual areas.

Read the report here.