By Marcus Leach

A new challenge prize and guide to enable communities to realise the benefits of community buying was launched today (Wednesday) by the Department for Business, Innovation and Skills and Co-operatives UK, the trade association of co-operative enterprises.

Community buying involves groups of people combining their buying power to purchase goods or services together and get better deals from shops and other suppliers. This can help businesses spread their overheads and in turn lowers costs for consumers.

The ‘Buy Better Together Challenge’ is aimed at raising awareness of the benefits of community buying and sharing best practice amongst communities. BIS and Co-operatives UK are each contributing £30k to the prize fund.

Support will be awarded to schemes that best demonstrate new and different models of group buying and which deliver real deals and social benefits for communities. Any group or organisation within the public, voluntary or business sectors is eligible to enter the competition.

Launching the Buy Better Together Challenge at a community buying conference in London, Consumer Minister Edward Davey said there are great benefits from community buying.

"I am really encouraged by the experiences of the existing groups we’ve heard from today, who have realised significant benefits from community buying," he said.

"And not just in monetary terms, but also through the huge social payback these schemes deliver, such as opportunities to develop new skills, increase confidence and build closer communities.

“This is another strand of our consumer empowerment strategy; giving consumers the tools and guidance they need to take more informed choices and get better deals. I look forward to seeing the new and exciting ideas that will be put forward for the prize and the benefits that it will bring for the wider community.”

There are many examples of communities across the country - from food co-operatives to heating oil groups - which have experienced tangible benefits from running collective buying schemes.

For example the Social Innovation Lab for Kent (SILK) has worked with local residents in Maidstone to help them establish their own community buying group. The R Shop Bulk Buying Project sees savings of up to 30 per cent on individual items for its members as well as giving opportunities for volunteers to gain confidence and learn new skills.

The Guide for Community Buying Groups, also published today, is aimed at people who might be thinking of setting up schemes in their community. In particular it sets out:

* the benefits of community buying groups;

* practical advice on how to get started and organised;

* business planning and dealing with finances;

* marketing, legal and tax considerations;

* other resources for sources of advice and information, including Business Link and www.mentorsme (the BIS supported mentoring scheme).

A dedicated website has also been set up for people to come together and discuss different ideas. The emergence of new technologies, such as web and mobile applications, has opened up new possibilities for consumers to find, recommend, compare and purchase products and services. It is envisaged that these digital platforms will have a large role to play in developing new approaches to community buying.

The Buy Better Together Challenge will be open for applications from January 2012. In May, shortlisted applicants will be asked to prepare a detailed business plan for the final stage, aided by a business mentor if they need it. The overall winner of the prize will be announced in October 2012.

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