Never mind the Shakespearean play-within-a-play – The Flanagan Collective are going one better, creating a festival-within-a-festival at this year’s Edinburgh Fringe. LittleFest (the Little Festival of Everything) is perhaps the ideal creation from a company that describes itself, quite simply, as doing “lots of things”. LittleFest really is “lots of things” – a microcosm of the Fringe showcasing every kind of theatrical act possible, from cabaret and comedy to poetry and plays.

LittleFest’s all-encompassing approach stems from a desire to capture the essence of communities, as artistic director Alexander Wright explains: “For me, there’s a lot to be said for community – for people being connected and making things happen together. Rural communities, or at least the ones I know, are very strong and passionate. The arts community, which I now spend most of my time working in, is also very strong and passionate, but we rarely get to see each other or spend time with each other. We meet fleetingly and only talk online.”

So Wright brought together a group of artists in his hometown of Coxwold, a tiny village in North Yorkshire, to “try out bits and pieces of work.” The artists spent the weekend chatting, drinking and presenting their work in a relaxed atmosphere – and it’s this “strong and passionate” rural atmosphere that Wright believes Edinburgh would benefit from replicating.

“The Fringe Festival is a sort of Mecca for theatre-makers. We flock each year in our thousands to try and be the best reviewed, win the most awards, and hustle down the royal mile, elbows out in force, to tempt audiences in to our shows rather than everyone else’s,” Wright says, “What we do is spend a lot of money, time, effort and energy in a grand competition. What we don’t do is work together, connect and actually have decent conversations … the Fringe is a pressure, artistically and financially, and this doesn’t seem to breed the best environment for ideas, relationships and imagination to thrive.”

In many ways, LittleFest is an opportunity for The Flanagan Collective to put into practice what they have learnt, both from the Coxwold mini-mini-festival and their previous years on the Fringe circuit (top tip: “you have to get on and do stuff [but] it’s much nicer doing those things with other people”), in an effort to encourage theatre-makers to connect rather than compete.

“The Fringe has such a strong focus on selling tickets because it is incredibly expensive to take work there, and this is what breeds the competition. But ticket sales, although necessary, aren’t what’s exciting about Edinburgh,” Wright insists. “Edinburgh is surely the most densely populated city of artists in the world over the summer. It’s a shame that we see these other companies as competitors rather than as part of our community. I know this isn’t entirely true – there are loads of wonderful encounters, relationships and friendships here – but Edinburgh offers such a unique opportunity to meet people you can only ever otherwise find online, and we should make the most of that. We should create environments which are about community and spending time with people rather than purely about box offices and queues.”

A noble vision, and one that extends to audience members as well as theatre-makers, as Wright outlines: “People are wonderful in every which way. Everything that I love and enjoy is fuelled by people. The arts are a bit peculiar, because they tend to fill in all the gaps so more people can’t access what’s going on. For example, a fourth walled piece of theatre is complete, whether an audience is there or not. So, rather than accept that as the norm, we are much more interested in finding ways for people to get involved and become a part of the heart of something.”

Wright hopes that LittleFest will do just this: remove the barriers around theatre and invite audiences to share the same space as artists, so that by the end of their run LittleFest will have “a whole bunch of people at the heart and soul of it.” This vision is being achieved by including a diversity of theatrical acts in the festival, blurring the rigid boundaries between art forms and providing a platform for emerging artists. Perhaps inevitably, then, new writing features heavily on the agenda, including a premiere of York-based playwright Hannah Davies’ Githa and a piece that immediately caught my attention: folk musical Beulah, based on the poetry of William Blake.

Wright – who, incidentally, wrote Beulah – explains his inspiration behind the piece: “I love Blake and I find some of his views about how the world is organised fascinating. I know Beulah (and Blake) has a number of religious connotations – I’m in no way religious but I find people’s various understandings of the impossibilities of the world fascinating, because parts of the world are impossible but yet they exist.” Wright highlights how poetry is inherent in our world, that beauty can be found in the way people “perceive things outside [their] experience” – such as “how we know a piece of music is beautiful even if we have never heard it before; how a sunset can take your breath away; how you know when something bad is going to happen; how we see people we have lost in our dreams.”

And talking of dreams, Wright is eager to access those of young theatre-lovers: “Young people have the most wonderful imaginations. I would love every young person in Edinburgh to come to LittleFest and tell us how we could do it better … I have no doubt they would teach us a thing or two about how festivals should work. I would love to make a venue that young people have dreamt up. It would be utterly thrilling, I’m sure.” Wright adds as a final ponderance: “Maybe we should do this next year?”

But until then, LittleFest is welcoming as many theatregoers as possible into its microcosmic community, because, as Wright continually emphasises: “People are much more important than things, whether those things are buildings, walls, lights, posters – people are what we should be focussing on. People are and should always be at the heart of it.” And there’s a lot to tempt all those people into LittleFest’s welcoming arms: music, cabaret, theatre, comedy, musicals and poetry, to name but a few. “There is a lot of good and exciting work under one roof,” Wright agrees, “But, more than that, the place needs filling with more imagination, ideas, events, conversations, singing, dancing, encounters, new friendships, drinking, talking, playing and whatever else we can squeeze in. Rather than us forcing you to come to what we have made, we’d rather you were a part of it all and make it with us.”

So if you’re struggling to decide how to spend your time in Edinburgh, it seems The Flanagan Collective’s LittleFest has the answer: a mini-Fringe within the big-Fringe, showcasing new writing, new talent, every type of theatrical act you can think of and, most importantly, a real penchant for people.

LittleFest will be setting up camp at C Venues C Nova until 27 August. For more information, see the Edinburgh Fringe website, the LittleFest website or The Flanagan Collective website. You can also join in the conversation on Twitter (@Little_Fest).