There is no doubt the last decade of austerity, sluggish growth and structural inequality has been bleak for us all. But, emerging from this malaise has been some highly creative thinking on how we might re-imagine local economies. These new ideas are not only idealistic but a necessary response to a national economy that has seen trends that include poor lending to local businesses by our state subsidised banking system and large corporations sitting on billions rather than investing to create jobs and growth in our communities.
This ‘system problem’ suggests that the democracy we take for granted at a local and national level politically must spread to the economic sphere if we are going to retain wealth in our communities, so more of it can be captured by the people and institutions in them. Within Preston and Lancashire, we feel we are the first in the UK to bring together a number of distinct but proven approaches to democratise our local economy.
First, Lancashire's County Pension Fund has chosen to invest up to £100 million in Preston and South Ribble's economy developing student flats, new hotels and office space as part of our City Deal. As members of the fund we would also like them to go further by considering investing in new affordable housing in Lancashire. As John Clancy showed in his book The Secret Wealth Garden, investments in overseas equities have often underperformed and funds are actively looking for more sustainable returns locally which have the added advantage of producing a social dividend for the communities in which the employees live.
Community Wealth Building strategies are now common in many US cities. In Preston, we are working with the Centre for Local Economic Strategies (CLES) to begin a similar movement in the UK with placed based institutions including councils, the police authority, higher and further education providers and housing associations increasing spend on goods and services to benefit our local economy with an initial £4 million repatriated to it. Community Wealth Building also involves the expansion of co-operatives, employee owned and social businesses with Preston City Council working with the University of Central Lancashire (UCLan), Spain's Mondragon Cooperative Corporation and our Chamber of Commerce to grow its social economy.
Democratisation continues with Preston actively exploring the municipal generation of energy for our citizens. Last year, the council supported a new city wide credit union ‘Guild Money’ with over 450 new members since its launch and our city centre regeneration plans will see at least £5 million invested revitalising our outdoor markets to support independent local businesses and bring in further investment. Finally, the majority of our public sector employers and many private businesses have signed up to the living wage making Preston despite historic deprivation one of the best in the North West for working people receiving £8.25 an hour or more.
Cllr Matthew Brown is cabinet member for Social Justice, Inclusion and Policy Cabinet Member at Preston City Council.