Anchoring community wealth

Preston’s skyline: Carl Ji, a Chinese student, at the University of Central Lancashire

Austerity has been devolved to local councils and, perversely, areas with higher levels of poverty have been hit hardest, councils have on average faced 40% cuts in their budgets.

In the face of adversity councils such as Preston have responded by bringing together anchor institutions and working with them to drive through a local programme of economic transformation. The government’s Commission for Employment and Skills defines an ‘anchor institution’ as “one that, alongside its main function, plays a significant and recognised role in a locality by making a strategic contribution to the local economy” and ‘tending’ to be non-profit.

By changing their procurement policies, these anchor institutions were able to drive up spending locally protecting businesses and jobs. They are looking at the council pension fund to see if its investment can support local businesses keeping the money circulating in their town.

A study by the Centre for Local Economic Strategies found that six of the anchor institutions in the area are now spending 18% of their budget in Preston, up from 5% in 2013. So an extra £75 million a year is being spent within the city, with the top 300 local suppliers creating an extra 800 jobs last year alone. And others are watching: Manchester city council has now increased its local spend from 44% of its budget to 70%; Lowestoft and Salford are also interested.

Last year this blog reported that Birmingham City Council was to work with Centre for Local Economic Strategies, with funding from the Barrow Cadbury Trust and support from Localise West Midlands, to see how anchor institutions in the non-profit and private sectors, including Birmingham University, Pioneer Housing and the QE hospital, could use their spending power to increase economic opportunities for Birmingham’s communities, businesses and citizens. Read more on the council website here.

In a separate project, Localise West Midlands has been working with the Midland Metropolitan Hospital (under construction, artist’s impression) which will be the closest adult hospital to the centre of Birmingham. The Sandwell & West Birmingham NHS Trust and LWM are partners in Urban Innovative Actions supporting the development of the local economy. The Trust hopes to spend 2% of the new hospital’s annual budget with local suppliers, adding £5-8m to the local economy. It will provide locally sourced meals and the builder has a target of 70% local employment, aiming to source 80% of construction materials locally.

Alice Thomson in The Times pointed out that making a legal requirement that councils buy and hire goods and services locally is banned by EU law at the moment, so it should be noted that the Preston project operates on a voluntary basis.

She commented: “The government should take the idea and encourage it, particularly in hollowed-out market towns where out of town shopping centres have crushed their sense of identity” adding “But (procurement policies) could also be used for more high-profile programmes such as the rebuilding of Big Ben, where the steel has had to come from Brazil, Germany and the United Arab Emirates, or the V&A which showcases Britain’s greatest designs but where the tiles for the new forecourt came from Holland”.

 

 

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A strategic alternative: localised and labour-intensive food production

LWM’s co-founder Colin Hines, in his latest book, Progressive Protectionism, asks: “In a sustainable system, would not each country aim to produce its own staple food? Surpluses and exotics could be exported, speculation in food by unproductive middlemen would be outlawed and vitally important food producers encouraged at every turn”.

He notes that at present, the UK feeds only around 60% of its population of 65 million. The EU was the next largest supplier at 27%. The distribution of UK imports from Europe has changed relatively little over the last 15 years. Other food travels much further: click on the link for a larger picture: http://www.coolgeography.co.uk/A-level/AQA/Year%2012/Food%20supply/Changes%20in%20food%20supply/Food%20Miles%20Britain.png

There is no guarantee that these supplies would continue under the same terms following the outcome of the Brexit negotiations and there are other potential threats, such as drought, floods and/or increased global demand.

A 2007 study ‘Can Britain feed itself?’ by Simon Fairlie estimated that it could, but that the dietary changes would be significant including:

  • far less meat consumption,
  • feeding livestock upon food wastes and residues;
  • returning human sewage to productive land;
  • dispersal of animals on mixed farms and smallholdings,
  • local slaughter and food distribution;
  • managing animals to ensure optimum recuperation of manure;
  • and selecting and managing livestock, especially dairy cows, to be nitrogen providers.

Hines notes that these measures would demand more human labour and a more even dispersal of livestock and humans around the country.

The World Trade Organisation (WTO) promotes a global economy which requires agricultural commodities to be transported for long distances, processed and packaged to survive the journey. As global food production and trade probably consume more fossil fuel than any other industrial sector, substantially increasing greenhouse gas emissions and making climate objectives much harder to achieve, i ts Agreement on Agriculture should be superseded by a World Localisation Organisation (WLO), under which all countries would be encouraged to reach maximum self-sufficiency in food.

Trade in food which cannot be grown domestically should be obtained, where feasible, from neighbouring countries. Long-distance trade should be limited to food not available in the region and countries exporting food should use the revenue to increase their own level of food security.

Hines ends by endorsing – as the answer – Tim Lang’s injunctions in the Foreword to the report of the Sustainable Development Commission (above left): calling for significantly less food wastage, more produced from less land and dietary change – eating more plant-based foods, less meat and dairy.

 

 

 

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Cargonomia: shrinking the distance between producers and consumers 

Planet Local, which highlights examples of localization in action all over the planet, is a project of Economics of Happiness/Local Futures/The International Alliance for Localization. In March thumbnail sketches of three ethical local banks were published here.

The local food movement is about growing food and also shrinking the distance between producers and consumers — and a new initiative in Hungary is doing just that.

In Budapest, an organic vegetable farm, a do-it-yourself bicycle cooperative and a self-managed bike delivery company teamed up to create Cargonomia, an urban food distribution hub which uses locally-manufactured cargo bikes to deliver locally-grown food across the entire city. And the project continues to grow: Two local bakeries have joined Cargonomia which now delivers bread across the city as well as vegetables.

Read more about this one-of-a-kind collaboration here. Within the team of partners, there is expertise in designing and constructing different types of cargo bikes and trailers.

It’s a business model which utilises each partner’s strengths: vegetable deliveries from Zsamboki Biokert are coordinated by Kantaa’s distribution experts and made using Cyclonomia’s bikes. In this way, Cargonomia goes beyond ‘local food’ to encompass the entire local economy. It aims to help local food producers: organic food producers, vineries, apiaries.

It hosts a community centre where local residents can borrow, rent, or buy their own cargo bikes, organise or attend activities focusing on the transition to a local-scale economy and events to connect with other social and environmental initiatives in the city.

Localise West Midlands is a member of IAL, a cross-cultural network of thinkers, activists and NGOs from 58 different countries.

 

 

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A local alternative to Uber?

Transport for London has decided not to give Uber a new license, though its app (Uber requires drivers and users to have a smartphone) will still be operational in London while Uber appeals against the decision.

More information about its problems and bans in several cities and countries may be seen on the West Midlands New Economics site.

The New Economics Foundation has called for a mutually-owned, publicly-regulated alternative to Uber, providing better working conditions for drivers and higher safety standards for passengers.

Stefan Baskerville (NEF: Unions and Business) said:

“Digital platforms are here to stay and technology cannot be reversed. The question now is how they should be controlled and by whom, as well as the standards they set and how they treat people. It is time to develop alternative models which put people back in control”.

As NEF points out, drivers in different parts of the UK are developing their own platforms.

In 2015 Cab:app was co-founded by London taxi driver Peter Schive, who said: ‘Cab:app draws on the heritage and expertise of the black cab industry and translates it for the digital world.

Other early examples included the Bristol Taxi App – abbreviated to Braxi – which will only employ drivers licensed by Bristol City Council. Farouq Hussain, ‘one of the brains behind the app’, described it as being “just like Uber, only local”, with no surcharge and 25% pay cut. He added: “Our app takes the best of Uber and makes it local”.

The most recent: in June Anlaby-based 966 Taxis in Hull designed and launched its Uber-style app which they believe could transform the service. Alice Martin (NEF: Lead for Work) said: “TFL’s move will send ripples across the country where there has been a recent surge in private hire licenses given out to support Uber’s growth, particularly in the Midlands, Yorkshire and the North West” adding:

We’ve been working with drivers in different parts of the UK who are developing their own platforms. The time has come for the Mayor to back a better alternative to Uber and lead the way for other local authorities to do the same”.

 

 

 

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Complexity or resilience?

In the Times, Ed Conway (right), economics editor of Sky News, describes problems arising from the complexity of ‘the hallmark of 21st-century life’ and the International Alliance for Localization records examples of new modes of development and progress.

Conway writes about the vast supply chains, financial instruments and legal structures ‘sitting beneath every industry’:

  • Where once a company made its products in one country, these days most sophisticated goods are the product of many hundreds of contractors from around the world, eventually assembled into one unit and quickly shipped to your door.
  • Where once a bank manager would know to whom he lent money, these days debts can be packaged and repackaged so many times that the link between borrower and lender is effectively lost.
  • Financial globalisation — the ability to move money seamlessly from country to country leaves countries even more vulnerable to banking crises.
  • And in much the same way as companies outsource non-core production and services, the public sector delegates responsibilities to private operators.
  • By replacing tightly knit relationships with impersonal complex structures we lost something — consider the 2008 financial crisis,

The complexity of the regulatory system played a part in the Grenfell Tower disaster tragedy. Not only were regulations extensive yet oddly vague — allowing builders to use various loopholes — they were not even checked by government officials. These days contractors in England can instead hire “approved inspectors”, private outfits which provide a bit of advice and tick the appropriate boxes.

Globalisation, once a means of boosting everyone’s income, has instead evolved into an excellent vehicle to help the rich get richer.

The International Alliance for Localization sees that the building of more resilient economies will require a rethinking of the financial system, and its Planet Local series has been turning the spotlight on some inspiring examples of ethical banking:

* In Maine, USA, a local resident with money to invest  is providing nearby small farmers with loans whose interest is paid exclusively in the form of farm products.

* Brazil’s Banco Palmas, governed and managed by residents of the impoverished Palmeiras neighborhood in the city of Fortaleza, has issued a local currency, dramatically shifted spending patterns to keep money circulating locally, and extended basic financial services to people shut out of the mainstream banking system.

* In Croatia, the democratically-owned Ebanka functions as a non-profit bank, in stark contrast to most financial institutions worldwide. Their loans are given without interest, and every member has an equal voice when it comes to voting on big decisions, regardless of the value of their deposit.?

Visit IAL’s growing library of localization initiatives

 

LWM is a member of IAL, a cross-cultural network of thinkers, activists and NGOs from 58 different countries.

 

 

 

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Localising new-build housing

Architect and writer Clive Aslet (left) writes about a development of 4,000 houses on 500 acres – houses, small apartment blocks, schools, surgeries, mixed income housing, shops, business premises and leisure facilities and green spaces – on the edge of Newquay. There is an emphasis on local labour, materials and procurement.

“How society chooses to house people is every bit as important as how it chooses to feed people,” says Tim Gray, estate surveyor and chief of operations “If you can get those two things right, you will be happier, healthier and better able to engage socially. the ambition is to build community and engender civic pride, to live so that you can meet your daily needs conveniently on foot, not to differentiate between homes of different tenures, and to be connected socially with the adjacent settlements — this should provide good foundations for deciding how the nation should build homes in the future. There really is an alternative.”

Aslet describes a number of features:

  • a core commitment to spend the money in Cornwall, using local labour and materials and a pattern book with typical Cornish vernacular details, e.g. roofs are made from Cornish slate from a nearby quarry
  • The plans include setting up a town farm in some listed buildings to provide food for residents of the development.
  • There will be mixed-use neighbourhoods, in which the car is subservient to the pedestrian.
  • There will be a community orchard, allotments and ‘edible gardens’.
  • Low-cost rented homes are scattered among the more expensive owner-occupied ones 30% of the housing is affordable.

The area has been given a new lease of life. The quarry provides jobs, and so do the builders responsible for the work — all firms are from the southwest, whose work not only requires local labour, but also helps to establish local supply chains. They form what Gray calls a “consortium” a method that ensures the architecture is practical and appropriate for the local market.

Newquay is poor and homes are particularly needed by young people. Judging from conversations with a number of people in their twenties and thirties and young families met in the area, they like the designs, the edible gardens (herbs and fruit bushes are planted next to houses), espaliered pear trees and bee bricks (bricks with holes laid into the eaves of houses to welcome threatened bee populations), they’re all part of the philosophy — as well as local style, local materials and local employment . . . local food.

This is symbolised by the community orchard. seven acres of land that has been turned into allotments. “Trespassers will be composted”, reads one of the signs. Orchard and allotments are visible signs of the local food web that is being encouraged. They’re also somewhere that people from the new housing can meet long-time Newquay residents.

As Tim Gray said, this should provide a good foundation for deciding how the nation should build homes in the future. There really is an alternative: Aslet sees it as the beginning of a movement that made Britain better to live in.

 

 

 

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International Alliance for Localization: Local Futures

In the Times, Ed Conway, economics editor of Sky News, describes problems arising from the complexity of globalisation, ‘the hallmark of 21st-century life’ and the International Alliance for Localization records examples of new modes of development and progress. He concludes: “Globalisation, once a means of boosting everyone’s income, has instead evolved into an excellent vehicle to help the rich get richer”.

The International Alliance for Localization sees that the building of more resilient economies will require a rethinking of the financial system, and its Planet Local series has been turning the spotlight on some inspiring examples of ethical banking:

* In Maine, USA, a local resident with money to invest  is providing nearby small farmers with loans whose interest is paid exclusively in the form of farm products.

* Brazil’s Banco Palmas, governed and managed by residents of the impoverished Palmeiras neighborhood in the city of Fortaleza, has issued a local currency, dramatically shifted spending patterns to keep money circulating locally, and extended basic financial services to people shut out of the mainstream banking system.

* In Croatia, the democratically-owned Ebanka functions as a non-profit bank, in stark contrast to most financial institutions worldwide. Their loans are given without interest, and every member has an equal voice when it comes to voting on big decisions, regardless of the value of their deposit.?

Visit IAL’s growing library of localization initiatives

 LWM is a member of IAL, a cross-cultural network of thinkers, activists and NGOs from 58 different countries.

 

 

 

 

FT: American executives turn away from globalisation towards a more localised world

Last month the Financial Times’ Gillian Tett met Inge Thulin, the Swedish-born chief executive of 3M, an American conglomerate at the Council on Foreign Relations in New York (below).

She reports that – though 60% of its revenues and 40% of 3M’s workforce are outside American shores – Mr Thulin, when discussing corporate strategy, prefers to talk about “localisation”:

“Our strategy has changed. If you go back [several] years, there was a strategy of producing at huge facilities at certain places around the world, and shipping it to other countries. But now we have a strategy of localisation and regionalisation. We think you should invest in your domestic market as much as you can.”

Instead of “free” trade, American executives are now calling for “fair” trade, along with “reciprocity” and “equalisation” of trade deals.

When Donald Trump started talking about restoring US manufacturing last year, he tapped into a subtle trend that was already emerging. As the West Midlands Producers’ site noted, the reshoring trend, successes and possible pinch points, have been systematically explored and publicised by Aston University’s Professor David Bailey since 2013; two years it quoted Professor Dr Michael D. Johnson, Department of Engineering Technology and Industrial Distribution, Texas A&M University, briefly in the FT:

“My colleagues and I have found that importing goods from China to developed countries (for example, the US) entails numerous increased costs: transportation, inventory carrying, and production and logistics oversight. The combination of these increased costs, just-in-time manufacturing needs, and increased developing country labour rates contribute to the economic viability of localised flexible manufacturing facilities serving developed country markets”.

Ms Tett recommends a survey of US companies conducted by the Boston Consulting Group which showed that as recently as 2012 American companies were busy building cross-border supply chains, 30% with China – but 31% in 2015 planned to boost production in America and only 20% in China.

  • One reason for this shift is a rise in relative wage costs in China.
  • Another is that production costs in the US have fallen because of automation and cheap energy.
  • However, a third point is that chief executives have realised that long supply chains create political and logistical risks.

“The days of outsourcing are declining,” Jeff Immelt, General Electric chief executive, observed late last year. “Chasing the lowest labour costs is yesterday’s model.” even before Mr Trump arrived in office, the C-suite (slang: important senior executives) was losing its blind faith in globalisation. For better or worse, we face a more localised world”.

 

 

 

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A regenerative ‘Circular Economy’ includes more localisation of economic activity

The Circular Economy is advocated to replace and address the social and environmental damage done by the current ‘Linear Economy’ with its ‘take, make, dispose’ model, depleting finite reserves to create products that end up in landfill or in incinerators. It achieves its objectives through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling – reducing waste to zero. Some examples of such practice are presented on the website of the World Economic Forum.

The idea of circular material flows as a model for the economy was presented in 1966 by an economist, Professor Kenneth Boulding, in his paper The Economics of the Coming Spaceship Earth.

In the 70s, Walter R. Stahel, architect, economist and a founding father of industrial sustainability, worked on developing a “closed loop” approach to production processes. He co-founded the Product-Life Institute in Geneva; its main goals are product-life extension, long-life goods, reconditioning activities, waste prevention, advocating “more localisation of economic activity”.

With Genevieve Reday, he outlined the vision of an economy in loops (or circular economy) and its impact on job creation, economic competitiveness, resource savings, and waste prevention. Their Hannah Reekman research report to the European Commission, “The Potential for Substituting Manpower for Energy” (1976) was published in 1982 as a book (left) Jobs for Tomorrow: The Potential for Substituting Manpower for Energy. 

The Waste & Resources Action Programme (WRAP) a charity, which receives funding from the Department for Environment, Food and Rural Affairs, the Northern Ireland Executive, Zero Waste Scotland, the Welsh Government and the European Union was set up in 2000.  From its headquarters in Banbury it works with businesses, individuals and communities to achieve a circular economy through helping them to reduce waste, develop sustainable products and use resources in an efficient way. Below: the header for its March report:

On 17 December 2012, the European Commission published a document entitled Manifesto for a Resource Efficient Europe. This manifesto clearly stated that “In a world with growing pressures on resources and the environment, the EU has no choice but to go for the transition to a resource-efficient and ultimately regenerative circular economy” and outlined potential pathways to a circular economy, in innovation and investment, regulation, tackling harmful subsidies, increasing opportunities for new business models, and setting clear targets.

‘Resource’, the first large scale event for the circular economy was held In March 2014 and Walter Stahel joined the programme of 100 business leaders and experts. Many major stakeholders and visitors from across the globe attended. An annual large scale event is now increasing the uptake of circular economy principles. Circular Economy Examples may be seen on the website of the World Economic Forum and there are indications that some multinational companies may be cherry-picking related ideas which cut costs and increase profits.

Some will have reservations about the involvement of McKinsey & Company, which has issued two reports on the subject – one commissioned by the Ellen MacArthur Foundation.

Peter Day explored the work of the Ellen MacArthur Foundation and its associates on radio (In Business) on 23rd April 2015 – listen again here.

Ellen established this independent charity in 2010 and eloquently outlines the economic opportunity of a circular economy, giving the concept wide exposure and appeal.

 

 

 

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Localising moves in four Eastern European countries

The Romanian parliament has passed a law requiring large retailers with a turnover of 2m euros to allocate a minimum of 51% of existing space for fresh produce to products sourced locally, from a short supply chain.

The law, which came into effect last month, initially stated that products should come only from Romania but had to be amended after Brussels warned that this would be a breach of EU regulation. Under the amended text, Bulgarian and Hungarian products would also qualify as part of a short supply chain.

roamiancoop

French retailer Carrefour has founded an agricultural co-operative in a Romanian village to bring local fresh produce to its shelves. It includes 80 families of producers who own 60 hectares of agricultural land. Carrefour will source 5,000 tonnes of fruit and veg from the local co-op in the village of Varasti.

Through the co-op, which officially launches this month, farmers will be able to scale up production and have a single collection centre. The partnership with Carrefour guarantees them a production plan and price, and means they will receive fast payments for their products.

RetailEU described the legislation as protectionist but added that Romania is not the only country concerned about its local manufacturers; Slovakia  wanted to force supermarkets to inform customers at the entrance of the number of Slovakian products in the store and recently the Polish government introduced a “supermarket tax” on all major (and therefore foreign) retailers, as Hungary has already done.