The Week UK - 29.02.2020

Briefing NEWS 13

29 February 2020 THE WEEK

WhathasPrestondone?
Toputitsimply,ithasspentpublic
moneylocally.Theofficialtermfor
thisis“communitywealthbuilding”,
whichmeanskeepingmuchofthelocal
economyinthehandsofinhabitants
andpreventingthe“leakage”ofmoney
elsewhere.Primarily,themodelrelies
onpersuading“anchorinstitutions”
–bodieswithlargebudgetssuchas
councils,hospitalsanduniversities–
touselocalbusinesseswhenprocuring
goodsandservices.Italsofocuseson
buildingaskilledlocalworkforceand
handingcitizensmorecontrolof
businessthroughtheuseofcooperatives,
communitybanksandthelike.Itaimsto
buildbusinessesthatinvestinthearea,
andarelesslikelytoupstickswhentimes
arehard.It’s“apracticalexampleof
takingbackcontrol”,saysTomKibasioftheIPPRthinktank.

Wheredid the Prestonmodel originate?
Workers’cooperatives havebeenaroundfordecades.The
MondragonCorporationinSpain’sBasqueregion, forexample,
wasestablishedin1956;it now consistsof 266 independent
companies,employsmorethan80,000peopleandhasannual
revenuesexceedings 12 bn.But the idea ofcommunity wealth
buildingwasinitiallycoinedbyaUS thinktank, the Democracy
Collaborative,whichfirst appliedit inthecity ofCleveland,Ohio,
in America’sdeindustrialised “rust belt”.There, itsetup the
EvergreenCooperative–agroup ofworker-ownedbusinesses
includingalaundryandamarketgardener–andpersuaded local
institutionstobuy goodsandservices from them.

WhathappenedinPreston?
Preston,acityof142,000, wasonceathrivingmilltown, butit
deindustrialised sharplyinthe 1970 s,andhassince sufferedfrom
entrenchedpoverty. In theaftermathofthe 2008 crash,one in
threechildrenlivedbelowthepovertyline, and itwasinthe
bottom 20%intheindex ofmultiple deprivation. Totryto
reverse itsfortunes,Prestonwentdown the traditionalrouteof
regeneration,pinningits hopeson anew shoppingcentre; butin
2011 theflagshipstore,John Lewis,pulled outand the scheme
collapsed.Meanwhile,the council
wasbeingravagedbythe coalition
government’sspendingcuts;between
2011 and2017, itsgovernment grant
almosthalved,from £30m to £18m.
The city’s Labour-run councildecided
it wastimetot hink again.

Whatdid the council do?
Councillors identified seven large
anchorinsti tutions all basedin the
city, including Preston City Council,
Lancashire County Council,alarge
housing association,Lancashire
Constabularyand theUniversity of
Central Lancashire.Coll ectively, these
institutions spent£750mongoods
andservices –but only 5% of that
money wasgoingtoorganisations
based in Preston, andjust 39% was
goingto those basedin La ncashire as
awhole.The waytheysaw it,£458m
was “leaking out”ofthe Lancashire
economy, mostlyto theSouth East.

Toredressthis,theyworkedwiththe

institutionstoencouragethemtospend

locally.Localsuppliersweregivenadvice

onhowtopitchfortenders.Tofillgaps

inthesupplychain,theynurturedthe

growthofcooperativestosupplypublic

bodieswitheverythingfromfresh

vegetablestosolarpanels.

Whatdidthisachieve?

Anchorinstitutionsincreasedspending

onprocurementwithinPrestonto

£112m–ariseof£74mbetween

2012/ 13 and 2 016/17–evenasausterity

meanttheiroverallspendingfellfrom

£750mto£616m.ForLancashireas

awhole,theincreasewasevenbigger

(upabout£200m).Thecouncilledthe

way;from 2 012/1 3 to2014/15,it

doubleditsprocurementspendwith

localcompanies.LocalsuppliersusingLancashirefarmerswon

everycountycouncil contractforschool meals.Theinstitutions

alsocommittedtopayingalivingwage; Preston City Council

becamethe North’s firstlivingwageemployerin 2 012.

Isit helpingrevivePreston’sfortunes?

Itcertainlyseemstobe.In2016,thecitywas rankedbytheGood

GrowthforCities indexasthebest innorthwestEnglandin

whichto live andwork,based oncategoriesincludingjobs, work-

lifebalance,skillsand environment. In 201 8, Prestonwasnamed

themostimproved city inastudycarried outbythe think tank

DemosandPricewaterhouseCoopers.Thecityhas 4,000 extra

employees receivingthelivingwage since the project’sinception,

andunemploymentfellfrom6.5%in 2014 to3.1%in (^2) 017.
Preston hasbeeninfluential:itwas hailedasJeremyCorbyn’s
“model town”,andhas inspiredinitiatives acrossBritain.
Iseveryone convinced?
No.Somehave called itamere “protectionistconjuringtrick”.
Money thatwasoncespentelsewherein theUKisspentlocally;
as ProfColin Talbotof CambridgeUniversityargues, “thereis
no valuebeingadded”,onlypublicmoneybeingshuffledaround.
In fact,it almostcertainlyraisesprices, byreducingthe number
of firms able tobid forcontracts and economiesof scaleinvolved.
WhatimpactisPrestonhaving?
Itiswidelyrecognisedas asuccessful
attempt in “levellingup” adepressed
regional economy. The Labour Party
is applyin gthe model in about
localcouncils itcurrentlygoverns;
it hasalsoattra cted interest fromthe
Scottishgovernment and theWelsh
National Assembly.However, the
appetite foriti nWhitehall appears
to be limited.Inaspeechto the
Conservativeconferencein2018,
Boris Johnsonsaid: “I amsure they
are anestimable bunch,butPreston
Councilarenot the locomotiveof
the UK economy.WeConservatives
know that it is onlyastrong private
sectoreconomy that ca npay for
superb publicservices.”Then again,
the greatthing about the Preston
modelist hatitd oesn’ tneed central
government. It canbe donewith out
extra moneyoreven legislation.
Preston: the city that took back control
Inthepastdecade,theonce-depressedcityofPrestoninLancashirehastransformeditsfortunesbyadoptingitsowndistinctivepolicy
The“mostimprovedtown”of 2018
Prestonmarket:the model inaction
To advocates of the Preston model, the regeneration of
the city’s 19th century covered market shows how it
can transform public spaces. The £3m project was
handed to Conlon Construction,afamily-owned firm
based in the city. “We’ve landed quiteabit of work in
ourhome town,” said its chairman, Michael Conlon.
“It’s allowed us to take people on.” The market was
transformed intoamodernist glass box which sits
beneath the building’s original canopy. In 2018, the
year it was completed, it won the Royal Town Planning
Institute’s top regional award for planning excellence,
which hailed the involvement of local businesses and
people in the project.
Now the building is home to dozens of local
businesses and cooperatives. The city is funding and
providing rent-free premises to ten new firms owned
and run by their workers–apackage worth up to £1m
–using grants from billionaire philanthropist George
Soros’s Open Society Foundations to get off the
ground. The council now hopes the market will
becomeabreeding ground for new cooperatives and
help the city develop its own sustainable economy –
the “next phase” of the Preston model.