Community wealth building has emerged as a powerful tool that seeks to democratise the economy and create wealth for all through broad-based local ownership. This is a growing area of interest for political stakeholders in the UK and an area that Miller Research is beginning to develop , in particular through our work in Blaenavon on behalf of the Torfaen Public Services Board. This blog, the first in a five-part series, will examine how community wealth building principles have been adopted in the UK and consider the implications of its techniques in ensuring that local economies become more prosperous.
Community wealth building as an idea originates from the Democracy Collaborative at the University of Maryland. The think tank worked in Cleveland, Ohio, to create an economic inclusion strategy for the city’s low-income communities. It successfully demonstrated how community-based worker cooperatives, with the support of what they called anchor institutions, could create green jobs and boost the local economy in an urban community which has long suffered from economic neglect.
The work of the Democracy Collaborative influenced the Centre for Local Economic Strategies (CLES) in the UK. In order to transform the relationship between communities in the UK with the wider economy, CLES have encouraged a people-centred approach to local economic development. They have done so by shifting the balance of control of the wealth to local people, businesses, communities, and organisations. This work has seen a transformation of the places who prioritise building community wealth, with the most famous example being that of Preston.
The ‘Preston Model’ is a holistic framework for integrating community, cooperative, and public assets into a supporting system that is mutually owned to create local economic prosperity. Guided by city councillor Mathew Brown, Preston council began mapping out opportunities for local procurement amongst ‘anchor institutions’. These organisations are locally rooted and embedded in the local community, as well as a large resource base for local purchasing. In Preston this included the hospital, the university, and Lancashire County Council, among others. Wherever possible, these anchor institutions were encouraged to shift spending towards local procurement. This approach has seen the city named as the most improved city in the UK by PWC.
The local wealth retained within the city since it began working with CLES has also been increased significantly. Since 2012/13, the six anchor institutions involved have sent over £750 million on goods and services, of which almost a fifth (19%) was procured from businesses based in Preston and over four-fifths (81%) from businesses based in Lancashire as a whole. This is a dramatic increase from before a community wealth building approach when 5% was spent in Preston and 39% in Lancashire as a whole.
The community wealth building approach has developed an alternative strategy, which has focused not just on the anchor institutions and changing procurement practices, but also on growing social businesses and co-operatives. Over the coming weeks this blog series will examine these strategies in more detail and consider how these approaches can be applied to other towns and cities in Wales and the rest of the UK.
