Municipal investment research

Building civic value by creating more engaged citizens

In September 2026 Dr Mark Davis and Dr Emma Hyde of the University of Leeds published “Making Places Better, Together”, which examines the case for municipal investments beyond the financial returns. They found that these investments provide a simple and practical way to increase civic participation by developing new forms of public engagement to transform residents into the co-owners of a shared civic mission.

“It’s participatory. And I think that’s a real strength of it. It gets people on board with the idea that they’re doing things in their areas […]. People often feel so separated from decisions that are taken for them, rather than by them. So, things like this break down those barriers. There’s a lot of value in it because it makes people feel like the council is theirs again.”

Cllr Minesh Parekh, Sheffield City Council

Through interviews with citizen investors and councils, they found that municipal investments have the potential to reset the relationship between local government and residents - creating a more substantive form of democratic engagement, linking public participation directly to local economic development and place-making.

“Local councils do much more than just empty the bins and fill the potholes – investing is a way to show you support the long-term investment that is needed for any community to thrive.”

Citizen investor

A citizen investor survey carried out by Abundance for this study, also found that citizens who have invested feel much more connected to their council and place, suggesting that by launching an investment programme, councils can start to deepen their partnership with citizens from day one.

What citizen investors say

55%

trust councils that issue a citizen investment more than those who don’t

64%

want to find out more about the positive difference their council is making for its community

59%

feel that their council is working in partnership with its residents

Source: Abundance 'Wider Impact of Municipal Investments' survey, August 2026, which was commissioned to support the University of Leeds research. Quoted figures for investors who had invested in their own council, or a council they had a connection to. Read a report on our survey

“Rebuilding Britain is going to require new ways of financing local infrastructure while enhancing public purpose, developing innovative financing arrangements that support productive investment rather than financial extraction.

Municipal investments provide councils and city-regions with access to locally rooted capital and strengthen civic engagement by keeping investment returns circulating within local economies. In our research we have heard directly from councils and investors how the this type of investment is a vital civic innovation that is building stronger, fairer and more robust places for the future by giving people a real stake in the places they care about”

Mark Davis, Professor of Economic Sociology at the University of Leeds, co-author of Making Places Better, Together

Municipal investments are a credible alternative to PWLB

In a companion study the Green Finance Institute (GFI), in partnership with the University of Leeds, has published a new technical paper - “Community Municipal Investments - Bringing the Benefits of NS&I to Local Government”. This analysis is the first to look at the financial value of municipal investments for councils, and explores the benefits of scaling the model for the local government sector.

The findings point to a structural shift in how councils could fund investment. To date, municipal investments have raised money consistently under the PWLB Certainty Rate (including fees), and the analysis shows that municipal investments would have been cheaper than PWLB almost 90% of the time over the past decade.

Looking to the future, the authors find that using municipal investments is not a niche opportunity. Given they require no departure from established borrowing practice, billions of pounds of annual council borrowing could be funded through municipal investments.

Key findings of the GFI report

Value for money

89%

The research found CMIs would have delivered savings for councils the vast majority of borrowing days over the past decade.

Proven savings

29bps

Since 2020, councils have raised over £30m through municipal investments at a significant saving vs PWLB Certainty rate.

Market potential

£2.3bn

Municipal investments could meet up to 42% of medium-term borrowing demand from actively borrowing councils.

Sector savings

£76m

At scale, using municipal investments can generate significant savings on borrowing costs for the sector.

“Municipal Investments are a credible, lower-cost complement to PWLB. At the same time, CMIs provide diversification away from a single funding source and open up access to a deep pool of citizen and values-aligned institutional capital.

At a system level, the opportunity is significant. Over time, municipal investments have the potential to become a long-term, citizen-backed source of affordable finance for local government. NS&I has been transformative for central government over the last 160 years, and this model offers a clear pathway to deliver similar benefits at the local level as a low-cost, patient and diverse source of borrowing.”

Miles Ashton, Associate Director, Green Finance Institute