Whoever wins the Labour leadership will be trapped in a maze of bewildering complexity. Voters in Scotland are highly aspirational, but for an anti-austerity, social democratic nationalism – not at all what aspiration means in the Home Counties. In London, the party appeals to cosmopolitan voters, who might flirt with the Greens, while in the north Ukip is breathing down its neck in search of white working-class support. Labour needs fresh thinking but also to rebuild a reputation for competence, especially among older voters, where it trailed the Tories badly.

To complicate matters George Osborne is like a fiendish political version of Monty Don planting new lines of hedge complete with vicious and unexpected twists and turns: large companies compelled to offer apprenticeships, a living wage and city devolution among them. Freed from coalition, the Conservatives have not just moved right but become more heterodox, borrowing from across the political spectrum. Meanwhile, much of the Labour party does not seem to want to move very far from where it is, marooned, slightly sulky, uncomprehending, fighting itself in a cage mainly of its own making.

Faced with putting together an electoral coalition under these conditions, whoever becomes leader will need to be curious and imaginative, unafraid to mix up ideas that create unorthodox hybrids. Ideas that will work will have to appeal to left, right and the non-aligned; those who embrace modern ideas of bottom-up, digitally enabled networks of power as well as those who favour traditional social democratic measures of social justice; create a fairer society through a more inclusive, innovative and productive economy, rather than redistribution. Labour needs to stand for the social self, where the desire for individualism and choice meet an appetite for collaboration and sharing. Creating ideas with that appeal will be like playing with a Rubik’s cube.

Of course, what Labour most needs is to take a step sideways, to become a party of inquisitive researchers, to learn more about how people’s lives are changing. That would mean disengaging from electoral politics and focussing on how the party can become a movement for change, within society. A good first step would be for every Labour MP to spend a week a year travelling by public transport and staying in B&Bs across a constituency the party has to win in 2020.

Labour could easily spend another five years in a downward spiral as a failing former incumbent offering a form of politics of interest to a dwindling band of diehard supporters, or it can reinvent itself, Stella Creasy style, as a kind of political start-up, pivoting to find new ways to connect with people as a social movement. The stage-managed, underwhelming and increasingly anachronistic annual party conference should be cut back to two days, and subsumed within a much larger Festival of Ideas for Better Living, providing a mixture of talks, debate, innovation, culture, music and food for anyone interested in how to live well for less in a cooperative spirit. The Daily Mail is famous for the Ideal Home exhibition; why doesn’t Labour find partners to do the Ideal Community festival? The party needs to stop complaining, talking to and about itself and instead start learning how to back solutions that offer people a tangible sense of a better, shared future.

It will not be impossible for Labour to get out of the maze. But it will take qualities that the party, and most of its aspirant leaders are not known for: ingenuity, agility, experimentation, imagination, curiosity and above all a delight in blending thinking from unorthodox sources to create new political recipes.

Here are just some ideas Labour will need to engage with if it is to break out of the trap Ed Miliband led it into.

1. Schools of life and work

Education has become a 16-year apprenticeship in diligently delivering the right answers at the right time, when it needs to prepare young people to be adaptive, persistent, collaborative problem solvers, capable of coping with uncertainty with only limited resources. Above all, young people should go to school to make things – films, software, food, products, art – and learn how to earn a living while also passing exams. That’s why at School 21 in Newham and the Big Picture schools in the US young people spend large chunks of time on properly structured work placements. Labour needs to stop playing catch-up in the standards game and change the game by talking about what education should be for with a massive expansion in creative, vocational learning.

2. Eco wealth fund

The National Trust is a huge, respected membership organisation which looks after physical assets, often donated by the wealthy, for the benefit of the nation. We should create a forward looking sister organisation, the National Trust Wealth Fund, which could for example invest in green economy solutions such as combined heat and power systems. It could be financed in part by drawing on some of the “dead money” being hoarded in cash by corporations; through contributions from “non doms” who want to show they are committed to the country and augmented by crowdfunding. The National Trust Wealth Fund would be a sovereign social development fund, with a combined social and commercial purpose, like Khazanah, the highly effective and innovative Malaysian fund.

3. The £36-a-year utility bill

In the German city of Freiburg are hundreds of three- and four-storey shared apartment blocks,baugruppen, which are beautifully designed, self-built and in shared ownership. They use energy from renewable sources, combined with high standards of insulation, to allow a family of four to heat their apartment for about €50 (£36) a year. This is green, collaborative innovation making life affordable for people on median incomes. Freiburg is a prime example of the heterogenous recipe Labour needs: public leadership promoting a mass of green, social and commercial innovation letting people live well for less.

Facebook Twitter Pinterest The public defeated plans to privatise forests because of what trees symbolise about a community. Photograph: David Noton/The Travel Library

4. The sharing state

Not every platform in the sharing economy – Uber meets Airbnb and Couchsurfing – is socially progressive. But the pace at which these mass, dispersed solutions have spread suggests there is a huge appetite for shared solutions which mobilise otherwise idle assets. Airbnb in particular is creating a relationally rich economy, which helps those with limited resources find better solutions. This should be prime Labour territory, applying these approaches to big social challenges.

We Work, the shared New York-based workspace provider, has become a $15bn (£9.6bn) company by providing community workspaces for small companies, in the process providing an alternative to traditional landlords. How about a We Homes approach to co-housing solutions to create affordable, aspirational social housing? Or We Care, a national programme based on the brilliant Shared Lives Plus programme in which people with spare rooms and time provide adult social care at home?

5. A party for public spaces

Defeat of the coalition government’s ill-considered plans to privatise the national forests was an example of the force of “public love”: people did not defend the forests out of calculation for the services they provided but because of what trees symbolised about the community they wanted to be a part of. Labour spends too much time talking about politics as a combination of rights, policy and process when it needs to engage with expressions of public love, starting with how we design and develop small public spaces, especially in cities. If people can muster 30 supporters prepared to commit time and money to caring for a public space, they should be eligible for matching state support from the Objects of Public Love Fund. Then we might see gardens, allotments, benches and playgrounds flowering in towns around the country: small places where people can be convivial, little engines of empathy and social connection. The Routemaster bus, both new and old, is a prime example of an object of public love: we need many more of them, especially in cities where commercial development of high-rise rabbit hutches threatens to smother public space.

Facebook Twitter Pinterest Shutting a road for a party is a brilliant example of the power of small ideas and an experience in democracy. Photograph: Janine Wiedel/Rex

6. The streets party

In 2011 a group of parents in Bristol decided to use legislation for street parties to close their street to traffic for a day to turn it into a playground. That spawned a charity Play Out, which has helped to create hundreds of play street events all over the country. If there were five per primary school, there would be about 20,000 a year. Nothing is stopping Labour building this movement now, with every Labour council committing to children taking over the streets of their town one day a year. The idea of shutting a road to traffic for the sake of children playing out is a brilliant example of the power of small ideas, especially if they are simultaneously old-fashioned and progressive. It’s not just the health benefits of taking children away from screens, or the community benefits of people on the same street bothering to talk to one another that make play streets so attractive. Taking over the streets is a powerful experience of everyday democracyy: everyone feels a little better as a result.

7. Sixty not-out: time for your second career

The Encore movement was started by Marc Friedman, a remarkable US social entrepreneur, to help people over 60 to start second, third and fourth careers doing work that matters to them and offers social good. He promotes the movement through an annual Purpose Prize, which invests in entrepreneurs aged over 60 who are changing the world in small yet inspirational ways. Mauricio Lim Miller, one of this year’s winners, for example set up the Family Independence Initiative which enrols groups of families into a support programme so they help one another achieve their goals. It has helped to create 40 lending circles in Oakland, San Francisco, Fresno, Boston, Detroit and New Orleans, pooling over $1.5m in interest-free loans. Labour did badly among older voters. It should create a Purpose Prize and go a step further with an Encore Investment Fund providing very low-cost loans for older entrepreneurs, commercial and social, to set up projects. It does not need to wait until it is in government to do this. It should do it now, while it is out of government, using its own fundraising capacity to create something of lasting value for older voters.

Facebook Twitter Pinterest Party for public spaces: Whether it’s the new or old version, the Routemaster bus is a prime example of something that people love. Photograph: Justin Kase ztwoz/Alamy

8. The anti-loneliness party

Labour needs to become a movement again, a community with a cause, which can make a difference to society without being in power. An obvious target is loneliness, which is a cause and a symptom of ill health and depression. One of the most impressive models is the 10,000-strong volunteer Network for Neighbourhood Palliative Care in Kerala, India, mainly comprised of students. Its target is to make sure no old person confined to their home is ever completely alone. A very high proportion of older people in the UK regard the television as their main contact with the world. The Labour party should become an anti-loneliness movement, proving itself by making a direct contribution to society rather than self-obsessing about re-election. Make a difference, now and people might start listening to you again.

9. Making Sundays special

Shopping absorbs more of our time and energy than ever, spreading much happiness in its wake. Yet is it also true that many people yearn for something more, beyond the meagre measure of money, which perhaps lifts their horizons, bringing people together: friends, families, lovers, fans and believers. Over the summer we trek to fields all over Britain to be caught up in festivals that offer something bigger than ourselves. Labour should give voice and form to this search for something more without being dull and dour. The Conservatives have just extended retail opening hours on a Sunday; Labour should show more imagination by reinventing Sunday as a day for culture that brings people together, reinvesting it with meaning. We might not want to go to church, but that does not mean we want to spend our Sundays in a mall. Bogota makes Sundays special by turning the city over to cyclists. In the heart of Mexico City on a Sunday morning you can take part in mass yoga sessions. The mayor of Bristol has been Making Sundays Special once a month, closing the city centre to cars, importing climbing walls and bouncy castles and inviting street performers to take over. Last year a giant water slide constructed down a main street attracted 100,000 applicants for 360 tickets. Sunday does not need to be religious, but it should be special.

10. Universal basic income

The Tories are leapfrogging Labour by bringing in a Living Wage, while also cutting in-work benefits. That leaves many people with the promise of higher wages but the reality of lower incomes. Labour is left to defend those on “benefits”, an unappealing position. The only effective response is to up the ante by being more radical: simplify welfare, eliminate means-testing and bureaucracy by introducing a universal basic income, linked to a massive increase in volunteering and access to vocational education. Most studies show that basic incomes do not undermine the work ethic but instead encourage people to study to get better-paid jobs. The RSA, led by Matthew Taylor, is about to start exploring how to revive an idea favoured by Milton Friedman and Martin Luther King, precisely the unlikely coalition Labour will need.

11. Better-business campaign

Business is one of Labour’s blind spots. Ed Miliband had a 1970s academic’s distaste for virtually all forms of business. The post-Ed rush to embrace all “wealth creators” is equally simplistic. It should not be hard for Labour to find ways to support better ways to do business. An obvious step would be to endorse the Benefit Corporation standard, the good business equivalent of a Leadership in Energy & Environmental Design certification, which companies get by delivering higher standards of transparency, accountability and social responsibility, to act for the good of the wider community as well as their shareholders. By declaring themselves a legal entity, a Benefit Corporation, these companies signal to investors that they have to organise their financial returns for the sake of social purpose. It creates a legal vehicle to give executives a degree of protection from over-greedy shareholders.

12. Liveable cities

In the bleak years of the early 1980s Labour’s renewal started with David Blunkett’s inspirational leadership of Sheffield city council. Labour again needs to make the most of its strong position in city government by creating a Fair City Movement. Since the 1970s the big urban challenge has been to resuscitate cities in danger of stagnation and decline. Many have found a growth recipe based on innovation, culture and retail. The problem is that with growth comes a sense of social division as the lion’s share of the benefits goes to the highest paid, leaving many on middle incomes left behind. That problem is most evident in London, but it is not alone. Many other cities – Oxford, Bristol, Cambridge are feeling similar pressures.

The challenge for cities is to find a more inclusive model of growth, which works not through redistributive transfers, subsidies and benefits but by ensuring that the markets that drive city growth also deliver fairer outcomes for middle-income citizens. Fair Cities would be committed to inclusive growth through a variety of tools, including a living wage; affordable childcare; a commitment from large companies to a Wagemark to limit the gap between chief executive and shopfloor pay to no more than eight times; the creation of public Land Banks such as Denver’s Urban Land Conservancy to subsidise affordable housing. Labour needs to show through its local leadership how cities can grow in a fair way: the highly participatory fairness commission run by Plymouth council was a good start.

13. One for One Welfare Programmes

Social solidarity has been reduced to a series of routines and procedures, denuded of all its human and emotional content. To revive a commitment to social justice we need to make welfare more like a relationship than a soulless system. One way to do that is to use more one-for-one models.

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Freeformers, an innovative digital training programme, is a prime example. A company which buys a place on the Freeformers training programme automatically buys a place for a young unemployed person to study alongside the corporate executives. We should routinely use one-for-one models in other areas, as the London Early Years Foundation is exploring with child care. Both parties benefit from a solution which creates a human connection.

14. Mutual banking systems

Ed Miliband liked to rail against the banks. The next Labour leader will need to show the party has tangible, shared solutions to create a better basic banking service for people. Peer-to-peer lending is gathering momentum through platforms such as Zopa and Rate Setter and in foreign exchange through services like TransferWise and Midpoint, which could become as ubiquitous as Facebook.

This should tell us what to do with traditional, mainstream banks. The Bank of England should take into mutual ownership the shared payments systems run by the big banks so this system can also be made available to smaller, innovative players, such as Ffrees and Think Money to market themselves nationwide.

Charles Leadbeater is the author of the manifesto for New Times, published in Marxism Today in 1988.