Our towns and cities operate in a straight-jacket, but community wealth building offers hope These are exciting times to live in. We have the opportunity to implement transformative change so that richer and healthier lives are the preserve of the many, not just the few. Matthew Brown Leader of Preston City Council 7th June 2018 Share 32 Tweet Our towns and cities operate in a straight-jacket. Neo-liberal economic culture is so ingrained there is often little locally elected representatives feel they can do to bring about systemic change to put communities in charge of their own destinies. We now have a potential solution with the growing support for community wealth building. Much of its focus has been from the work Labour and the Co-operative Party has promoted in Preston and elsewhere. However, its inspiration derives from work in American and European cities like Cleveland, New York and Barcelona forging a new global movement. Questions avoided for so long around the structure of our economy and whether we can gradually move to a much fairer, devolved and democratic economic system are finally being addressed. This is essential after the 2007/8 economic crisis caused significant damage we have yet to recover from. At the heart of wealth building is the need for systemic change and not to simply acquiesce to a failed economic model offering little hope of transformation. This means the democracy we take for granted at election time must move into the local and regional economic sphere. The Co-operative Party was one of the first to acknowledge the potential of this approach as it addresses key issues around ownership and control, in its latest report Ownership Matters. Preston’s longstanding work with the Centre for Local Economic Strategies (CLES) and others will continue to apply this transformation. In post-crash Preston, we couldn’t rely solely on inward investment, so we increased the amount spent on goods and services to Preston based suppliers by an extra £75 million in 2016/17 by working across our local public sector. This collaborative approach has seen over 80% of this extra public wealth redirected from mainly large corporations in the South East to many local SME companies who will keep 63p of every public pound in the community compared to 40p for a large or multinational company. We realised also the £7bn public sector pension fund we are a part of spent little in the Lancashire economy, so the fund agreed to invest £100m in the Preston and South Ribble economy with the potential to go much further. 30 years ago, public sector pension funds invested 60% in the UK. This has reduced to 30% with the value of these funds falling dramatically at a time of economic crisis especially when they are dominated by city investments. Impact investing in regional economies is commonplace elsewhere and should be expanded here to ensure the best long-term return for public sector pensioners along with added economic and social benefit. We know the damage the behaviour of some major banks caused to our communities across the country. Preston was one of the worst hit for the amount lent by large banks to small companies and we want to free ourselves by establishing a fully licensed community bank to lend to small businesses, cooperatives and individuals failed by the mainstream banking system. It is why we have also re-established a credit union Clevr Money and support Lancashire Community Finance as another not for profit alternative. We knew wages needed to be higher and became the first accredited living wage employer in the north of England in 2012. This has seen the Council joined by most of our local anchor institutions and other employers in our community. Applying this principle to local purchasing also has helped us become the best out of 14 local authority areas in Lancashire for people receiving £8.75 an hour or better who work here. Other strategies have been applied including Preston entering into an energy supply partnership selling fairer tariffs as a not for profit alternative to the Big 6 inspired by the excellent work by Robin Hood Energy and our anchor strategy has deepened with organisations such as Community Gateway as a tenant led cooperative housing association insourcing work and even offering employment opportunities to their own tenants. Finally, we are excited about the potential to expand worker ownership in Preston. Work with Dr Julian Manley and others at the University of Central Lancashire (UCLan) will see the University Business School support new cooperatives and cooperative education into the curriculum. We want to fill gaps in the local economy by establishing worker owned cooperatives to compete for public sector contracts initially. This year we will have our first two in food and IT, with us committed to establish more when we can. Put together these approaches can be transformative to our communities and realise a radical but sensible alternative to the systemic failings of the current economic model. This has been acknowledged by Jeremy Corbyn and John McDonnell by endorsing Labour’s new Community Wealth Building unit. Here also organisations like the NHS could begin becoming extremely powerful economic actors rooted in place and buying, hiring and investing for social benefit improving health outcomes. The work of The Democracy Collaborative in the United States and the new wave of radical municipalism in Europe shows a powerful international movement is emerging to build social justice from the ground upwards we are now a significant player in. These are exciting times to live in with the opportunity to implement transformative change so richer and healthier lives are the preserve of the many, not just the few.