Foreword

In this report, Neal Lawson, Director of Compass, describes Community Municipal Investments (CMIs) as a “virtuous cycle of public investment and public trust.” CMIs allow local citizens and organisations to invest in community needs while earning a financial return. Proof of concept is provided by 19 councils across the country that have already raised almost £30 million. This policy development has supported social regeneration, transport, housing, local energy, and nature projects in locations including Bristol, London, Sheffield, and Edinburgh. Lawson advocates for government backing to promote and regulate CMIs, particularly by ensuring they are built into local planning applications as a method of investment.

Introduction

The funding councils require to improve local services and build new infrastructure typically comes from the Public Works Loan Board (PWLB) or commercial banks. These borrowing channels are often hidden from public view and do not allow residents to have a real stake in projects. CMIs provide an alternative, allowing councils to raise money for local projects by enabling people to invest in them for a return. The report provides evidence of the civic impact of CMIs and calls on the UK Government and aligned organisations to promote, legislate, and advocate for the model to make CMIs a business-as-usual way for people to put their money to work locally.

Creating civic impact

CMIs offer a practical way to increase local participation by developing new forms of public engagement where residents become the “co-owners of a shared civic mission.” Instead of encountering the council in a narrowly interventionist or tax-raising way, the model offers an opportunity to invest directly in valued local projects and share in long-term benefits. A major challenge for devolved authorities is securing patient capital for infrastructure. While conventional finance cannot lend to councils below the PWLB rate, CMIs mobilise local citizen savings at an equivalent or lower cost. Footnotes indicate that the UK’s Cash ISA market is estimated to be £360 Billion in 2023-24, and moving just a fraction of these savings into a CMI offer would be transformational for local government.

Revitalising civic life

Restoring civic life is vital to the health of UK democracy and society. In the Summer of 2025, seven in ten Britons said the country was “on the wrong track,” with some describing Britain as “shattered.” Issues such as a worldwide epidemic of loneliness and the cost-of-living crisis have reduced face-to-face encounters and increased anxiety. CMIs help address this by allowing people to look beyond their own wants and become more committed to collective goals. The model is designed to be socially inclusive, achieved via a minimum investment threshold of £5. Existing CMI investors are spread across all deciles of the Index of Multiple Deprivation (IMD), demonstrating the model’s broad accessibility.

Method and evidence

This report was funded by an Impact Accelerator Account award from the Economic and Social Research Council (ESRC) as part of UK Research and Innovation (UKRI), and the Leeds Institute for Societal Futures at the University of Leeds. Between 1 June and 31 August 2026, the authors conducted desk research and eleven interviews with council officers representing diverse roles, including strategic finance, climate change, and public engagement. Working with Abundance Investment, a survey was circulated to CMI investors, generating 309 responses, comprising 140 local investors and 169 non-local investors. The qualitative data underwent two rounds of peer-review with colleagues at the Universities of Leeds, Oxford, and York.

Impact for councils

Since the pioneering pilot launches in late 2020 by West Berkshire and Warrington, CMIs have matured to finance over sixty-five local infrastructure projects with almost £30m invested across nineteen councils. In Glasgow, the first phase raised £1 million to support the installation of more than 1,700 solar panels on council-owned sites. By August 2026, Glasgow’s programme had raised approximately £3.2 million across three rounds. Sheffield City Council raised its £1 million target 55 days before the scheduled closing date, with funds earmarked for solar panels on 26 schools. Southwark Council launched the UK’s largest council-led community investment scheme for climate action, raising £3.5 million by March 2026. For councils, CMIs serve as a unique vehicle to showcase collaborative action and communicate local ambitions.

Impact for investors

Investors are primarily motivated by the opportunity to generate positive social and environmental impact beyond individual financial benefit. Survey results found that 59.2% of respondents feel more optimistic about the future of the place they live as a result of investing in a CMI. Furthermore, 66.3% want to know more about the positive community impact being made. Trust is a key driver, with 43.2% of investors trusting councils that issue a CMI more than those that do not. Additionally, 34.3% of local investors reported a greater interest in local government since investing, and 38.6% feel more connected to their community.

Financial impact

Nineteen councils have used the CMI model, raising close to £30 million at an average discount to the PWLB Certainty Rate of 29 basis points after fees. Analysis suggests that 5- and 10-year CMIs could address the borrowing needs of 25–42% of active PWLB borrowers, equivalent to £0.8–2.3 billion per year. Simulation data shows the CMI rate was lower than the headline Certainty Rate on 89% of trading days. At scale, savings of 60 basis points versus the PWLB Certainty Rate are achievable. If councils used CMIs for 50% of their 5- and 10-year borrowing, it could generate a sector-wide lifetime interest saving of up to £47 million, rising to £76 million with four maturities.

Conclusion

CMIs offer councils a cheaper, diversified source of borrowing and represent the prospect of the local government equivalent of National Savings and Investments (NS&I). The model already works in a variety of social and political contexts and has been championed by council leaders across political parties. Achieving its full potential requires consistent adoption and coordinated action across councils, investors, and the arranging platform. The report concludes that CMIs can evolve into a permanent, scalable, and resilient pillar of public finance through a permanent “Local Savings and Investment” offer.

Call to action

The report recommends that central government do three things: Promote CMIs via a national information campaign; Legislate to allow local planning applications to include local investment models and enable Public Finance Institutions to support the platform; and Advocate for the blended use of CMIs in the capital programme. In return, the authors and partners commit to driving growth by expanding CMI use across the capital programme and committing to a regular cadence of issuance. They also plan to build credibility by making impact tangible and expanding the investor base through support for secondary-market liquidity and simpler investment tools.