In 2020, West Berkshire Council launched the UK's first Community Municipal Investment (CMI) bond providing residents and community groups with a unique opportunity to invest in West Berkshire. These investments have been used to fund projects outlined in our Environmental Strategy, including urban tree planting and energy efficiency upgrades to traffic signals and street lighting.
The bond was an innovative way for the council to raise funds at an affordable borrowing rate while providing our community with an opportunity to directly and positively impact the local area. Although the scheme attracted investment from across the country, 23% of total investment came from West Berkshire.
We received funding from Horizon Europe – a fund supporting European research and innovation – to carry out the due diligence, auditing, and legal work needed to underpin the scheme. The West CMI Berkshire initiative launched in July 2020 with a series of online events and early feedback was incredibly positive. We hit our goal of raising £1M in October 2020, saving £15,000 in costs compared to standard borrowing options.
Investors can put a minimum of £5 into the bond at a fixed 1.2% interest rate with returns paid through an annuity. This means investors receive a tenth of their principal plus interest twice a year. Investors can also choose to donate their interest, with all donations being used to fund our Wild Verges project – supporting the creation of a pollinator-friendly network of wildflowers on our roadsides.
We used the funds raised through the CMI bond to accelerate previously identified green projects. Half of the funds went to roof-based solar projects with the remaining monies used across a variety of local schemes, including supporting the local Wildlife Trust. It was important to find a balance between generating income and contributing to visible local projects that our investors could see in the community.
West Berkshire Council won several awards for this pioneering project. These include a Sustainability and Social Value Award at the Public Finance Awards 2021 and an IESE 2021 Silver award for Green Public Service. The initiative also featured in a range of national and local media, including BBC South Today, The Times, and Financial Times.
Keep it simple – Community investment is a great mechanism for councils to raise funds at an affordable rate and to help communities to invest in something that has meaning to them. However, if you try to create a scheme that addresses every challenge you have as a council or try to fund projects which are too complex or difficult to visualise then you may face significant barriers.
Engage with the community – Although almost of a quarter of investment in the bonds came from local residents, it would have been great to increase this proportion. As the CMI bond was launched in the midst of the pandemic it was tough to engage people face to face, and we would definitely look to increase community engagement if we ran a similar project in the future.