UK unemployment currently stands at a 4.8%; and in places like the North East it's as high as 6.7%  [1] .These are shocking figures but perhaps not surprising given the unparalleled challenges of 2020. The challenges will intensify next year as government support for businesses and employees is withdrawn, but it is fixable.

Tackling it is going to require some radical approaches; local communities and authorities need the opportunity and investment power to tackle it from the ground up, starting with community businesses.

A new report from Power to Change, Employment and Skills – the role of community business, written by the University of Plymouth, suggests 18% of community business employees were out of work before starting their roles; and community businesses employ 7% more staff with long-standing physical or mental illness or disability than other businesses. They also employ a higher percentage of those with caring responsibilities.

With these groups representing some of those most disadvantaged in the labour market, it's clear to see the important role community businesses can play in tackling unemployment in their local communities. Unlike big corporates, community businesses are well positioned to respond immediately to local community need – they're embedded in their local areas and have a deep understanding of the motivations and challenges of local people.

Until the coronavirus pandemic hit in March, one such community business, Old School Wolverton, located on the outskirts of Milton Keynes, had been helping deliver work-related training to local young people with special educational needs through its partnership with a local school. From Monday to Thursday, students worked in an on-site café trying out a range of roles to help them acquire on-the-job training that would set them up for employment when they finished their studies.

Since the pandemic their vision has grown, as has their offer. They now seek to help the local community build back stronger by offering support to anyone in the community who's struggling to find employment - whether they've lost their job due to Covid-19, are a new mother wanting to return to work, or are a young person looking for a first job.

For community businesses such as Old School Wolverton to continue to provide these vital opportunities and help contribute to post-crisis recovery, they need proper support at a local level. Whilst there have been some efforts by central government, current proposals don't go far enough in giving communities the tools they need to help their economies thrive and unemployment fall.

In its recent Spending Review, the Government announced its new Levelling Up Fund, which aims to invest in local infrastructure that supports communities and local economies. Whilst the spirit of the fund is welcome, it's delivery mechanism, controlled in Whitehall, risks shutting out many communities and community businesses which could most effectively play this role in driving local economic regeneration.

Similarly, I'm pleased to see government commit to replace and match EU economic funding with the Shared Prosperity Fund (SPF), and its focus on civic infrastructure and community-owned assets. As the government further develops how it distributes both the SPF and Levelling Up Fund, it's crucial that communities are able to access some of these funds directly, so that they can play a more active role in supporting their local economies in a post-Brexit and post-pandemic world.

Placing this funding directly in the hands of communities, in partnership with local authorities, will ensure that those with the greatest understanding of their local economies can enact change and play a central role in tackling the jobs crisis and support those furthest from the labour market back into work.  

Community businesses like Old School Wolverton, and hundreds of others across the nation, are tackling some of our knottiest public policy issues. They are developing locally sensitive approaches to the provision of employment opportunities and wider economic development which will be vital in the years to come. Give them the power and support to play an even bigger role.

For more information on how central and local government can support community businesses, and to read our full Employment and Skills report, visit www.powertochange.org.uk

Vidhya Alakeson is chief  executive of Power to Change

[1] www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/november2020