The story of local government today can be summed up in one word: cuts. Brutal, life-changing, future-cancelling cuts. As many as 1,000 children’s centres have been closed by English councils since David Cameron took office in 2010. Almost 130 libraries closed across Britain last year alone. That’s people with disabilities trapped in their homes, grandparents denied adequate care and lifeline bus services scrapped.
This is news that rarely makes the news. It is announced through notices tied around lamp-posts, rather than in the national newspapers. When Cameron and George Osborne designed their historic spending cuts to fall most heavily on local government, this was the outcome they wanted: private tragedies delivered through tens of thousands of brown envelopes plopping on to doormats across the land, rather than one glaring public outrage. Yet stack them all together and you can make two big bets about this country’s future.
First, our councils will emerge from this decade unrecognisable from how they entered it. They will be shrunken in size, in scale and in scope. Second, one of the great casualties of our decade of austerity is likely to be imagination – the sense that alternatives to this broken regime not only exist, but can be built by us. Of those predictions, it is too late to avert the first. Yet the second, I believe, can still be fought off. And for those desperate to preserve a spark of hope in a political system that feels so hopeless, let me suggest this: watch Preston.
Perhaps you already know something of the city. You may have read on these pages about its guerrilla localism, bringing tens of millions in public spending closer to home, so as to create more jobs and prosperity. How it has been praised by Jeremy Corbyn and how all the fuss prompted none other than Boris Johnson, the great silverback himself, to take a swipe at last autumn’s Tory conference: “I’m sure they’re an estimable bunch but Preston council are not the locomotive of the UK economy.” A jab swiftly parried by a study showing it to be most improved city in the UK.
The first fruits of this hard graft are there to see. Right outside the town hall is the new and award-winning covered market, a £4m contract filled almost entirely by local firms employing workers on the real living wage – public money that would otherwise in all likelihood have trickled down from Lancashire to firms headquartered in London and the south-east before no doubt winging their way offshore.
That’s the story so far, and for most councils it would amount to a good ending. Conference speeches, column inches, feet up. Not in Preston, as I discovered on a return visit last week. Instead, it is embarking on an even more radical adventure. First, we can exclusively reveal that the council is today launching a programme to incubate worker-owned cooperative businesses.
Think of it as a socialist Dragons’ Den. Using cash largely provided by George Soros’s Open Society Foundations, the city will fund and provide rent-free premises to 10 new firms owned and run by their workers. The scheme, worth up to £1m in cash and kind (compare that with the council’s annual budget of about £20m), will be run independently; and after their kickstart, the co-ops will be required to stand on their own two feet. Although given advice and expected to work together, none of the new enterprises will be told what to do.
The inspiration comes from Mondragón, in Spain’s Basque Country. What is today the world’s biggest cooperative began in the 1950s, after the devastation of the civil war. Now employing almost 80,000 workers, it ranks among the largest companies in Spain, runs a vast chain of supermarkets, and exports around the world. The employees are the bosses, and no one earns more than six times what anyone else does(at British housebuilder Persimmon, by comparison, ex-CEO Jeff Fairburn got paid over 3,000 times his most junior staff. Yet every venture has paid its way. Those are the same values that Julian Manley, heading Preston’s cooperative scheme, wants inculcated among the 10 new businesses. Within a decade, he hopes Preston will be a mini-Mondragón – a city that gave birth to an entirely new economy.
By the time the first co-ops are up and running, Preston’s council leader, Matthew Brown, also plans to launch a new people’s bank for the north-west. Its branches will be on high streets from the Wirral to Cumbria, and it will lend about £500m, of which one-third will go to small businesses in the region. Again, it will be run as a co-op, and with values that run entirely counter to the banking system that crashed in 2008. Rather than giving bonuses, making multinational deals and screwing over punters, it will aim to be local, trustworthy and very boring.
In Brown’s wood-panelled office hangs a Sex Pistols poster, while facing him every day is a portrait of Tony Benn. Yet for all the firebrandery pinned up on his walls, the council leader himself says the most radical things as mildly as one might ask whether you take milk and sugar. What’s his ultimate goal? “It’s about building an alternative to capitalism – a capitalism that has failed this city and this country.”
And while the words are muttered in the direction of his shoes, there’s no doubting Brown’s ambition. Even as other councils are scrapping or selling their most prized services and buildings, a small and often-overlooked city is building bold new institutions.
There is nothing special about Preston. It is as battered as anywhere else in England. It is just as starved of cash. After a decade of cuts, admits the councillor in charge of finances, Martyn Rawlinson, an aged couple with rats in their house will be waiting weeks for the city’s pest control to come out. So why not devote every penny, every minute of municipal resources to preserving services, rather than to these experiments? “Because this is about building something different and better for ourselves,” he says.
I fully expect some of these ideas to crash and burn. Others need to be improved. Preston hosts an annual carnival, its taxi drivers can speak Urdu, and its shop signs are often in Polski. Yet its new-model economy is, so far, white and male. But as Rawlinson argues, more of the same policies will produce more of the same failure. That knowledge, and the desire to act on it, is spreading elsewhere. It’s why Hartlepool wants to take a leaf out of Preston’s book, as does Labour’s candidate for North of Tyne metro mayor, Jamie Driscoll. It’s why Bristol and the south west are also looking at people’s banks while the Welsh government has just started to fund the idea of a foundational economy focused on locals’ needs such as social care, good schools and broadband I have previously discussed.
These are bleak times for anyone who wants a more progressive politics in Britain. We are hostages to a rightwing project, Brexit, that has failed before it has even launched. Our government bursts with chancers and buffoons who are incapable of chartering a ferry service. Yet it remains a country with the imagination to try new things and the fight to make them work. As I leave Manley, I ask if he is serious about building a new economy in his hometown. The co-ops of Mondragón, I point out, benefit from tax breaks and an entirely different political culture.
“Yes, they never had Thatcher,” Manley agrees. “But they had General Franco, and they built something new among bombed-out ruins. If they did that, why can’t we? It’s tough – so what?”
• Aditya Chakrabortty is a Guardian columnist and senior economics commentator
