Revitalitalizing Preston and Community Wealth Building in the UK (2012–present)

In an effort to revitalize a post-industrial town and tackle poverty amid reduced local public finances, Preston City Council adopted a strategy of community wealth building by incorporating principles of a circular economy, encouraging local production and consumption, to drive local economic development. This approach focused on increasing local investment and ownership through initiatives such as cooperative development, local procurement, and the re-alignment of local supply chains. Over the course of a decade, Preston’s strategy has lifted the city out of the bottom 20 percent of the UK’s most deprived local communities, and earned it recognition as one of the ‘Best Places to Live’ in England.¹

Preston is a city in Lancashire county, northern England, the home and workplace of approximately 338,446 people.² In 2011, Preston ranked in the bottom 20 percent on the Index of Multiple Deprivation, with stark inequalities—including a 16-year gap in life expectancy between its wealthiest and poorest neighborhoods.³ Between 2011–2017, the Lancashire council’s central government grant halved from 30 million to 18 million,⁴ due to the implementation of austerity (cuts to public financing) by the central government. In addition, in the wake of the 2008 global financial crisis, Preston saw the collapse of a GBP 700 million Tithebarn shopping mall development scheme⁵ highlighting a need to become more self-sufficient.

Community Wealth Building (CWB) was first introduced into Preston (often referred to as the “Preston Model”) in 2012 and has become a “catalyst for self-sufficiency.”⁶ CWB is a collaborative localized economic development policy approach that focuses on local partnerships to prioritize local investment, local procurement, strengthen local supply chains and community ownership for the benefit of the local community. This is in contrast to subsidizing or prioritizing transnational firms or foreign direct investments. CWB mobilizes existing local assets and builds human, social, environmental, institutional, and physical capacity to spur local economic development and ensure gains from investments are owned and controlled by local communities.⁷

Core to CWB are the partnerships. The local government, Preston City Council, is the central actor and coordinator, albeit with low resources, working together with other, and more resourced, local institutions (known as “anchor institutions”) to enact CWB strategies. Anchor institutions are organizations with fixed assets that are specific to the locality, and cannot easily move (e.g., schools, hospitals, universities, trade unions, large local businesses, and local authorities).⁸ Much of the control, action, and success of the model remained in the hands of Preston’s anchor partners.⁹

Strategies for CWB can be categorized into five main pillars according to the Democracy Collaborative. The following table also shows how those CWB pillars look like in Preston.¹⁰

Implementation

In the wake of austerity cuts and the collapse of the Preston Tithebarn Partnership, the Preston Council invited Ted Howard, Co-Founder and President of The Democracy Collaborative, in 2012 to talk about the Cleveland Model to apply it to Preston. Inspired by worker-cooperatives in the Basque region of Spain when the Modragon Corporation initiated a worker co-operative in 1956,²⁴ Ted Howard first coined the term ‘community wealth building,’ rooting the principles of worker co-operatives from Spain for its application in Cleveland, Ohio, United States.²⁵

In 2012, Preston began its network-building approach by becoming the first local authority in Northern England to become accredited by the Living Wage Foundation as a Living Wage Employer.²⁶ In 2013, the council employed the Centre for Local Economic Strategies (CLES) to adapt the Cleveland Model to Preston, and identify 12 significant anchor institutions.²⁷ From 2013–2015 the CLES exploration led to the Preston Procurement Practitioners Group set on determining where a leakage of GBP 450 of 750 million spent from anchor institutions was leaving the local economy and how to re-direct procurement and supply chains.²⁸ Post-Brexit and without the European procurement law, it became easier for public institutions to pick local over international suppliers.²⁹

From 2017, CLES’s repeat analysis finds that local procurement has increased economic spending in Preston, and the city council continues its cooperative sector building work. By 2019, ‘the Preston Model’ achieved widespread recognition for its successful local economic development.³⁰ Today, Matthew Brown, Leader of Preston City Council, continues to move forward CWB work in the UK alongside the Democracy Collaborative.³¹

Assessment

Preston has been empowered to build a local economy based on inclusion.³² Between 2012–2017, six anchor institutions (Preston City Council, Lancashire County Council, Lancashire Constabulary, Preston’s largest social housing association Community Gateway, Preston’s College, and Cardinal Newman College)³³ were able to double their investments from 39 percent to 78 percent with local suppliers.³⁴ The successful implementation of numerous initiatives ultimately affirms the effectiveness of CWB in Preston.

From 2017, CLES’s repeat analysis pinpointed that local procurement concretely increased economic spending in Preston. Due to CWB efforts, Preston has not only identified GBP 70 million (USD 95,415,950) of anchor institution spending re-routed to Preston since 2013, but has seen an additional GBP 200 million (USD 272,617,000) invested into the Lancashire economy, and created 4,500 new jobs.³⁵

Positive multiplier effects from the local development and investment. For example, Preston saw a reduction in unemployment from 6.5 percent in 2014 to 3.1 percent in 2017 (lower than the UK average unemployment rate in 2017 which was 4.6 percent).³⁶ Beyond that, Preston saw a reduction in poverty, as it moved out of the bottom 20 percent of UK’s most deprived local authority areas. By 2019, ‘the Preston Model’ achieved widespread recognition for its successful local economic development.³⁷

Preston has also received feedback from several ratings and indexes. According to PricewaterhouseCooper (PwC), Preston was rated as the ‘Most Improved City’ in the UK in 2018 and 2019 and the “Best Place to Live” in northern England.³⁸ In the Social Mobility Commission index looking at the ability of individuals to move between social classes (an important measurement that encompasses the ability to move out of poverty), Preston improved its position and increased its social mobility from 143 to 130 out of 324 local authority areas.³⁹ It also received an ‘Above-Average’ rating on the ‘Good Growth Index,’ which measures how well cities deliver inclusive growth, from the Rise of Lancashire Local Enterprise Partnership.⁴⁰ Ted Howard, founder of CWB, has explained that Preston is the most holistic application of CWB, where he said Preston is, “creating an ecosystem of change that will be the engine for a new, fairer economy.”⁴¹ Today, Preston remains a national example of what a devolved and localized economy can look like.⁴²

However, there are limitations to the Community Wealth Building (CWB) approach given that it is limited to maximizing reduced resources locally. One ongoing concern is that, despite Preston’s trajectory of improvement, wages remain low and there is a pressing need for greater investment in upskilling the local population, and additional investment from the central government.⁴³ Preston remains vulnerable to economic downturns.⁴⁴

Additional Information

While there is no set definition for CWB, the Democracy Collaborative first articulated CWB in 2005 and highlights that the core principles of CWB involve:⁴⁵

• Shared power and collective ownership.
• An ecosystem of partnerships and coalition building.
• Systems-level work to transform economies at their core.
• Ecological sustainability and just transitions.
• Inclusive economic transformation.
• Dismantling systemic racism and promoting racial justice.
• Fostering holistic well-being of individuals and communities.
• Mutual recognition of shared economic responsibility and solidarity.

CWB was first put into practice in Cleveland Ohio, and involved harnessing anchor institutions and building the worker-owned Evergreen Cooperatives in 2008 (alongside the city government and Cleveland Foundation), directly combating the legacies of deindustrialization in Cleveland where the departure of manufacturing jobs, high poverty, and limited service-based anchors remain.⁴⁶ Today, the laundry and energy company employs 150 people who face barriers to employment or low education, where over half of workers own a stake in the company and all are eligible for pension payments, profit sharing, and home-buying assistance.⁴⁷ After Cleveland, cities around the world began paying attention to CWB as a transformative economic development tool.

CWB addresses critical challenges related to wealth inequality. By keeping wealth local and fostering shared ownership, citizens can combat rising energy prices, fight unfair wages by corporate bosses who export jobs overseas for lower costs, and maintain direct investment towards Black and Brown communities, tackling racial justice.⁴⁸

Tags

• High-Income Country
• Income & Wealth
• Labor
• Political Participation
• Redistribution
• Social Protection
• Universal
• Urban Areas