Preston city council was the only Labour-led authority in Lancashire to retain all its seats in the recent local elections. Despite the losses the party experienced across the UK, Preston’s success shows what can happen when a Labour council puts forward a transformative political vision. It was a similar story in other areas where the party offered a politics that spoke directly to working people, such as Manchester, Merseyside and Salford. Throughout Britain, communities want change – and Labour must be clear about how it can deliver this.
Preston’s success lies in a strategy the council has been pursuing for nearly a decade known as community wealth-building. In the past, the council relied on global developers and the promise of major retail investment to deliver economic opportunities. In 2011, when a major shopping centre development that would have brought £700m investment to the area failed to materialise, we decided to take matters into our own hands and pursue a model that would bring resilience to our local economy, ensure wealth remained within the area and give people a say over their economic destines.
A central part of our approach is encouraging big institutions such as hospitals and universities to join this movement for economic and social progress. These “anchor institutions” are unlike conventional businesses: they’re publicly owned, won’t get up and leave, spend billions annually and employ thousands of people in the area. In Preston, the council has encouraged them to pay the real living wage and to buy much more from local businesses rather than remote corporate giants. We’ve also ensured the council and public pension fund invests locally, and we’ve used the planning system to support local employment in large commercial developments.
These policies are transforming Preston. Our city is being regenerated by common endeavour, with the public sector delivering more contracts to local companies and employing many more local workers. As well as buying, hiring and investing locally, we’re building a more democratic economy by expanding worker and employee ownership. Preston is currently planning a regional cooperative bank, providing support to food purchasing cooperatives, exploring district and community energy production and putting key city developments into municipal ownership. Our intention is to scale up the Preston model and build a popular municipal socialism.
Of course, this model isn’t the answer to everything, and the city still faces significant challenges – particularly deprivation, the historic loss of well-paid manufacturing jobs and the recent shocks of lockdown restrictions. But before Covid-19 struck, community wealth-building had contributed to our highest employment rate for decades. We had the highest number of workers receiving the real living wage of all local authority areas in Lancashire, and we’ve created opportunities for the people who live here, rather than relying solely on the investment decisions of big businesses to create jobs and growth.
As we recover from Covid-19, local governments won’t achieve the social, economic or environmental progress we need by relying on old forms of development. The pandemic has exposed how depending on property investors and high-street retailers to deliver economic growth is inherently precarious. These sectors, particularly shopping centres and retail, have taken a huge hit, and it will take years before they fully recover from the pandemic. Depending on this type of extractive growth, where wealth is siphoned out of communities for the benefit of distant shareholders, is no longer a feasible model.
Community wealth-building is a rejection of this approach. Though it was barely mentioned a decade ago, its principles are now being adopted by numerous local and regional leaders, whether by Paul Dennett in Salford, Mark Drakeford in Wales, Joe Cullinane in North Ayrshire, Steve Rotheram in Merseyside, or Sadiq Khan, who is working with London’s anchor institutions to lead the city’s recovery through purchasing and recruitment. There is also a growing number of US cities, including New York, San Francisco and Chicago, adopting these strategies to expand worker and employee ownership, introduce public banking and explore how individual data can be brought into collective ownership.
This movement is being instigated by communities and local politicians, rather than central government, and has the potential to shape the political and economic agenda in places ahead of Westminster. For Labour, this could be decisive. If the party is to capture voters’ imagination, it will need to put forward a genuine alternative to economic insecurity and inequality. After decades of disinvestment, free-market economic policies and austerity, the party needs to offer a bold and radical agenda for transforming local communities. It’s only by showing communities that it can deliver these changes that Labour will have a chance of winning.
Matthew Brown is Labour leader of Preston city council
