At a national level, there is already a well-established model that keeps money delivering for the UK. The various incarnations of National Savings & Investments (NS&I) have been a mainstay of the national finances for 150 years, and still provides more than 8% of central government borrowing through its premium bonds and investment products.
The idea that people might invest even closer to home, in the places they live and work, is also not new – it is the origin of building societies and credit unions. Plus, in the late 19th and early 20th centuries, municipal bonds were also a routine part of local authority finance. At their peak, around 15% of council borrowing came through this route.
Since 2020, a number of councils have begun to revisit this model. Using our regulated digital investment platform – Abundance Investment – they are raising capital directly from citizens while building a deeper connection between residents and the infrastructure being delivered in their communities on their behalf.
The early evidence is encouraging. Eighteen councils have launched citizen investment programmes, with more than 3,000 people investing more than £25m so far. This approach has also demonstrated clear financial value, with average savings of 21 basis points compared with the Public Works Loan Board certainty rate, inclusive of platform costs.
It is now possible to imagine a future where a meaningful share of local authority borrowing once again comes directly from citizens, bringing significant benefits to local government – both in terms of financial savings and in building deeper civic engagement. The councils who are pioneering this change have a vision of an ‘NS&I for local government' – a vision that is within reach as our centuries-old tradition of citizen led finance is updated for the digital age.
Karl Harder, Co-founder and joint managing director, Abundance Investment
