Changing local economies to work for people who feel excluded

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A link has been received to a Guardian report about the ‘Preston model’ – for background information see Clifford Singer’s interesting article on the Next System Project’s website.

Councillor Matthew Brown, Preston city council cabinet member for social justice, inclusion and community engagement, devised this model. 12 of the city’s key employers were helped to reorganise their supply chains and identify where they could buy goods and services locally, stopping 61% of their procurement budget being spent outside the Lancashire economy. The employers included ‘anchor institutions’ such as:

  • the county constabulary,
  • a public sector housing association,
  • colleges
  • and hospitals

Since 2011, Lancashire council’s central government grant had been reduced from £30m to £18m, leading to cuts in everything from community engagement to parks and the leisure centre. “The intention was to devolve cuts and blame it on us,” Brown says. “But you can become more self-sufficient.”

The Public Services (Social Value) Act 2013 now allows public bodies in England to take into account the social, environmental and economic impact of their commissioning. A key step was to redirect lucrative contracts, such as printing services for the police and food for council buildings, towards local business and the city council doubled its procurement spending with Preston companies from 14% in 2012-13 to 28% in 2014-15.

Brown and his colleagues want to build a city where workers are in control of wealth, improving people’s sense of citizenship. “We’ve got the public pension fund to invest in student housing, we’re looking at setting up a local bank to give business loans and for the local authority to become an energy provider,” he says. “You put all that together and you can see how we are developing the infrastructure for a new economy.”

The model was inspired by cooperatively run communities in Cleveland, Ohio and the world’s largest co-operative group, Mondragón, in the Basque region of Spain, and has been cited in speeches by the shadow chancellor John McDonnell and other councils, including Birmingham, Rochdale and Sheffield have taken an interest in the initiative.

Matthew Brown has worked with the Centre for Local Economic Strategies, a Manchester-based think tank with considerable experience of working collaboratively with local authorities and other institutions to boost local economies.

CLES is  working in Birmingham with Localise West Midlands because for many years LWM has made the case for more inclusive, ‘locally grown’ economies – see its ground-breaking report, Mainstreaming Community Economic Development. The focus is on those ‘anchor institutions’ which have a major impact on the city.  As part of a separate initiative, LWM is working with the New Economics Foundation, CLES and New Start. They have brought together a group of local practitioners from the region which has suggested a focus on health and social care. Read on here.

Brown believes that as a result of the financial crisis and its aftermath people are ready to hear a radically different way of thinking about politics and that Corbyn can win a Labour party victory in 2020. Until then, Preston is backing the northern powerhouse initiative to secure devolution, allowing it to build what Brown believes are the foundations of a new economy away from the City and Westminster.

“The days of getting huge inward investments are over, so the sensible way is looking at how you can do that through your local area to make something new,” he says. “This is it.”

 

 

 

Localism: a rescue plan for British democracy

A notable omission from Localise West Midlands’ extensive range of articles about, or with references to localism, is a review of a book by Simon Jenkins: Big Bang Localism: a rescue plan for British democracy.

big bang localismIn this book he attributes the decline in British voter interest and participation to the over-centralisation of power in Whitehall, ‘one of the most centralised governments in the West’. As turnouts in elections are dwindling, he notes, many are turning to ad hoc pressure groups and direct action.

Centralisation has not worked well, Jenkins believes; levels of satisfaction with health care, education and policing are lower in Britain than almost anywhere in the developed world. He notes a change in public opinion which once, on the whole, believed that the British government works well and is now shifting to a belief that it needs improving, citing contemporary YouGov polls showing a rise in discontent with public services and health care

Twelve years later the need to heed Jenkins’ pre Corbyn message has never been greater as the established on the political left and right frantically attempt to discredit and unseat a democratically elected party leader.

He noted that Britain’s local councillors are outnumbered three-to-one by 60,000 unelected people serving on roughly 5,200 local quangos, managing various functions that may be local but are no longer under local democratic control. Examples include health service, housing, prisons, training and economic development.

Jenkins points out that, across Europe, countries have spent the past two decades refreshing their local democracy – even traditionally centralised countries like France have devolved. The USA operates the most decentralised system of government and in these countries, public services are delivered more locally than in Britain – and win greater public trust as a result.

He sets out a programme for a ‘democratic Big Bang’, to return power to the local level, including control over health, police and education services, to re-enfranchise the British people:

Counties and cities should run:

  • health services
  • secondary schools
  • policing
  • the prison and probation services
  • youth employment and training
  • planning.

Municipalities and parishes should run whatever gives a community its pride and visual character:

  • primary schools
  • old people’s homes
  • nurseries and day-care centres
  • clinics and surgeries
  • parks and sports centres.

Local services should mostly be funded by local taxation, which should be raised from a combination of:

  • residential property tax
  • business rates
  • local income tax.

Jenkins proposes that central government funding of local services should take the form of a block grant, determined by the Local Democracy Commissioner and paid to local authorities with no strings attached.

The “enemies of localism” are vested interests and the national media, but devolution in Scotland and Wales shows that people prefer decisions about local services to be made locally. Simon Jenkins recommends that the Big Bang should start with a “bonfire of central controls” and an end to targets and official league tables, adding “Big Bang Localism is the answer to the failure of Britain’s public services and the loss of faith in British democracy”.

Will beneficial alternatives emerge from the Greek crisis?

nefAndrew Simms of the New Economics Foundation thinks so, commenting: “While disaster reveals a society’s economic and social weaknesses, it also reveals where true resilience and real value can be found – in the ability of people to cooperate at the local level to meet a community’s needs”.

Localise West Midlands’ Localising Prosperity programme suggests that approaches to economic development that concentrate more on ‘locally grown’ enterprise, supply chains and investment are more successful in creating successful places, well-being and social justice.

lwm loc  prosp graphic2

In a diverse, localised economy, more people have a stake, which redistributes economic power, reducing disconnection, inequality and vulnerability to ‘too big to fail’ institutions.

Greek survey questions could include some of those LWM listed for the West Midlands:

  1. What sectors and types of economic activity could be localised?
  2. By how much could economic activity be localised?
  3. What quantifiable benefits might it bring?
  4. Decentralising capitalism and capital outflows from the region.
  5. Localising money supply and markets.

Two relevant developments

Peer to peer technology [P2P]

The Guardian has reported the story of Volos, a Greek city where locals have adopted an alternative currency, known as the Tem. As the country struggles with its worst crisis in modern times, with Greeks losing up to 40% of their disposable income as a result of austerity imposed in exchange for international aid, the system has been a huge success. Although locals insist the Tem, which is also available in voucher form, will never replace banknotes they say it is a viable alternative. The mayor of Volos says that the alternative currency has proved to be an excellent way of supplementing the euro: “We are all for supporting alternatives that help alleviate the crisis’s economic and social consequences. It won’t ever replace the euro but it is really helping weaker members of our society. In all the social and cultural activities of the municipality, we are encouraging the Tem to be used.”

Parallel economies

Elsewhere, Andrew Simms reminds us, in the wastelands created by recession in Detroit in the United States, unemployed people have turned to urban gardening to grow their own food and reclaim abandoned plots of land. People have done the same in poor parts of New York.

After the financial crisis that wrecked Argentina’s economy at the turn of the millennium, community gardens sprang up alongside community kitchens. Things went much further in Argentina as whole arms of government ceased to function properly. El Movimiento de Trabajadores Desocupados, the movement of unemployed workers, brought groups together to do everything from making food, to building shelters, creating markets for people to sell their products, schooling and, also, demonstrating. They created, in effect, a parallel economy. Panaderia, bloquera and ropero – bakeries, block making, and clothes making and selling were a particular focus which is perhaps unsurprising being the basics of a livelihood: food, shelter and clothing.

Decentralising capitalism and controlling capital outflows from the region

Greece shut down its banking system, ordering lenders to stay closed for six days starting on Monday, and its central bank moved to impose controls to prevent money from flooding out of the country. This might lead to a process of domestic investment, reversing the process of the Thatcher government’s legislation which starved British industry of investment funds.

Whatever the causes of the crisis: over-spending on German military equipment, high public expenditure, failure to collect taxes, lack of ‘due diligence’ on the part of lenders or the single currency, many hope to see the emergence of creative ways of developing a stable Greek economy.

Described as a “small quasi-closed economy” by the director of the Centre for European Policy Studies – with 12.4% of the country’s labour force employed in producing food and cotton, one of the world’s leading fishing industries and the substantial revenue from tourism and shipping – Greece seems to have a ‘head-start’.

Is a quiet political revolution getting under way?

As the old order with its class and gender hierarchies gave way, George Monbiot points out that the void filled with junk could have been occupied by a better society, built on mutual support and connectedness, without the stifling stratification of the old order.

The feast to which we were invited is only for the few’

foe logoInstead, as the developed world – saturated with advertising, the handmaiden of market fundamentalism – became reliant on rising consumption to avert economic collapse, he notes that Friends of the Earth has begun to explore how we might reconnect with each other and with the natural world. New models for urban living are based on sharing rather than competitive consumption:

  • the sharing of cars and appliances and tools,
  • of money (through credit unions and micro-finance) and power.
  • community-led decision-making, over transport, planning and, perhaps, rent levels, minimum and maximum wages,
  • municipal budgets and taxation.

Such initiatives, facilitated by the state can bring people together with a sense of shared purpose, ownership and mutual support that centralised decision-making can never provide. But in some areas, non-party political movements are achieving this without that elusive government facilitation

Independents

Peter Macfadyen, Kate Bielby and Mel Usher of Independents for Frome
Peter Macfadyen, Kate Bielby and Mel Usher of Independents for Frome

Today, a neighbour gave the writer a cutting about Frome’s declaration of independence.

This Somerset market town has developed “flatpack democracy”, taking political power at a local level and enabling people to have a greater say in the decisions that affect their lives.”

Independents for Frome took all 17 seats on Frome’s town council, with vote-shares as high as 70%, and support from people who cast their other votes for the main political parties.  

Localism in action

Though local Conservatives were convinced that austerity had to apply even at the most local level, the council has borrowed around £750,000 to invest in buildings and land:

  • green spaces have been spruced up
  • game-changing help has been given to the local credit union
  • he council is involved in a new renewable energy cooperative,
  • and has put money into the setting up of a new “share shop”

In Devon the Buckfastleigh Independents group have followed a similar path. the town’s new deputy mayor, Pam Barrett says the town is ”a working-class town that’s been suffering from a real loss of services.” After fighting – successfully – to keep open a library and swimming pool, she and other residents stood for town council seats that had not been contested for “20 or more years”. One of the catalysts, she says, was a box of 10 copies of the Flatpack Democracy booklet, which was brought in by one of her colleagues. On 7 May, they also took nine of 12 seats, and started running the show.

Flatpack Democracy ideas are being shared with other groups in Devon and Somerset and though people in Alderley Edge, Cheshire were not aware of developments in the West Country, their thinking is much the same: as one newly elected councillor, Mike Dudley-Jones, said: “our basic mantra is that there is no place for mainstream party politics at this level”.

On election day, Conservatives lost all nine of the parish council’s seats to this group – Alderley Edge First – which also took the village’s one seat on Cheshire East council.

Is the term ‘localism’ used by government to promote outcomes that contradict its original meaning?

james robertson headerA thoughtful appraisal of localism by Ekklesia’s staff writers was brought to our attention by James Robertson’s December newsletter. To read it in full click on this link.

A new research project, Localism Watch, examines the impact of the coalition government’s ‘localism’ initiatives, which they say have helped to privatise local services, weaken local government and force voluntary groups to pick up the pieces.

localism watch header

The editor, Laird Ryan (below left) has held several senior roles in government, academia and the voluntary sector. His findings: many local councillors, charity organisers, community groups and trades unions have a limited and confused idea of what new powers they have gained or lost from recent laws that supposedly promote localism:

“Officially, the Localism Act 2011 will “shift power from central government back into the hands of individuals, communities and councils”, through new community rights and planning powers” but, to date, few communities have successfully claimed them, due to complex and expensive bureaucracy.

laird ryan“True localism goes against the grain of Britain’s ruling culture”, argues Laird Ryan. “Whether left or right-leaning, national policies are more likely to benefit people at the centre than people at the grassroots.”

Language is being manipulated – using ‘localism’ to describe policies that centralise power and maximise corporate profits. One example supporting this assertion is the 2013 Growth and Infrastructure Act; though even its explanatory notes were not helpful to the writer.

Ekklesia’s staff writers say:

  • it curtails citizens’ rights to have a say in major planning proposals such as HS2 allows larger home extensions without planning consent
  • and permits drilling under property without the owners’ consent for fracking or oil extraction.

And several developments have confirmed Ryan’s summary: “Under Cameron, local communities can challenge councils to run public services, but they have lost their right to challenge proposals for nuclear proliferation, fracking or HS2”.

True devolution? Has localism merely meant passing power to unelected micro-quangos?

prof richard batleyProfessor Richard Batley, University of Birmingham (School of Government and Society) writes in the FT: “Constitutional devolution, convincingly argued, could be attractive in England, as well as Scotland, Wales and Northern Ireland . . . Westminster seems not to appreciate that irritation at the centralisation of power and wealth in London is not confined to the Scots”.

A historical perspective is given by the LSE’s Professor Tony Travers: “At the turn of the 20th century, local government ran nearly all public services in Britain . . . Parliament, with an empire to run, busied itself dealing with the colonies, dominions and war . . .” He continues:

prof tony travers“By common consent, the UK is (now) a highly centralised country. Most taxes are set by the chancellor, while decisions that in most democracies would be made in town halls are handed down from desks in Whitehall . . . In countries as diverse as the US, Sweden, Germany and France, municipalities play a far greater part in democracy. . .

“The northeast wisely rejected a toothless regional assembly in 2004. The current government, like its predecessor, has struggled to deliver “localism”, which has generally meant passing power from councils to unelected micro-quangos such as schools, clinical commissioning groups and local enterprise partnerships”.

philip hoskingFollowing an earlier contribution on devolution the writer asked, “Will it happen?” Philip Hosking answered: “It already has: in Scotland, Wales, Northern Ireland and London. If we want it enough we will get it”.

He continued: “There is much movement in English regionalist circles at the moment with Yorkshire First, Yorkshire Devolution Movement, Northumbria People, Hannah Mitchell Foundation and more besides.

“Perhaps now is the time to relaunch Mercian / Middle England’s aspirations for devolution. What with the referendum in Scotland I think England’s regions (plus Cornwall) together need to make a clear, coherent case for a decentralised England that’s not just city regions, LEPs or government zone regions”.

Continuing the good work on mainstreaming stronger & more inclusive local economies

I’m pleased to report that Localise WM has secured funding from the Barrow Cadbury Trust for 2013-14 to progress our work on Mainstreaming Community Economic Development.

BCtrust logoYou may be aware of our previous Mainstreaming CED project, which amassed a remarkable body of evidence around the social and economic benefits of localised economies (see our literature review or its summary) and then outlined how a local and community orientated approach can be integrated into conventional economic development to maximise these benefits.

This has given us a really useful body of material we can use to support progressive economic development, so we’re pleased to be able to develop it further, working with others to generate practical outcomes and building on our 2012-13 research findings:

  • Engaging and discussing the opportunities of Mainstreaming Community Economic Development with project managers, policy makers and politicians
  • Developing an informal learning network of  practitioner to provide the opportunity for shared learning and wider implementation
  • Working with partners to mainstream community economic development by testing its feasibility and ease of implementation in the West Midlands
  • Monitoring and evaluating the impact of the mainstreaming community economic development approach and the implications for future learning and implementation

Conrad Parke portraitIn particular we are planning to work with a hospital regeneration and supply chain project, a group of SMEs and other organisations aiming to establish a SME co-operative to facilitate joint winning of contracts;  and one or two local authority strategies on specific issues. LWM colleagues for this project are excellent new additions Conrad Parke and Sarah Longlands, and longer-standing LWM members Jon Morris and myself.Sarah Longlands pic

Local authority cuts of course make this an incredibly challenging time for public services including economic development – and likewise for communities. But it also necessitates a rethink about how we deliver ‘more with less’ and less unequally. Some public bodies are exploring these ideas, and we hope our MCED work will help that trend to become more widespread.

We are also happy to talk to anyone about potential opportunities to progress this strand of work elsewhere.

The MCED project webpage is here, with links to the previous research page, reports, briefings and related work, and we’ll be posting update blogs here as the year progresses.

Karen Leach

Is ‘disintegrated localism’ part of a hidden agenda?

Alister Scott, Professor of Spatial Planning and Governance at Birmingham City University, asks:

 what is the problem pp scott

In the Birmingham Post, Scott examined the localism ‘tablet’ , looking critically at Eric Pickles’ rhetoric, commenting: “there is something politically attractive in giving people the right to determine their future and shape the kinds of places they want”.

Lying behind the rhetoric he perceives an uncomfortable truth: “English localism is cloaked behind a carefully designed set of government rules and interventions that control the localism agenda, preventing the wrong kind of localism being pursued”.

Amongst several points made illustrating this control:

  • Local communities involved in neighbourhood planning cannot object to developments.
  • The housing and employment land allocations in the local plan are fixed and non-negotiable.

In practice, the rhetoric of local people being able to shape their places is being contradicted by centrally imposed regulations that risks producing outcomes contrary to the needs of local people.

Disintegrated localism – a ‘get out of jail’ card?

Scott sees a ‘disintegrated localism’ with government reluctant to let communities, local authorities or LEPS have the necessary resources or delegated powers to shape their places, reflecting:

“Of course the cynic in me views the government’s localism rhetoric as a ‘get out of jail’ card, as by claiming there is no big government intervention then the government is free of blame when the desired growth doesn’t appear on the horizon. So cue the renewed attack on the planner as the enemy of enterprise”.  He ends:

We cannot and should not let this this government’s localism subterfuge go unchallenged.

Those who wish to know more about Scott’s approach will find clues in his Rebuilding Planning to Help Build a Better Britain,  noting the Holistic Treatment Plan powerpoint slide.

A new social revolution – an emerging trend “a million miles away from the fantasy localism agenda espoused by David Cameron”?

David Thorpe, news Editor at Energy and Environmental Management (EAEM) writes about “An emerging trend that, if allowed to develop its potential, could transform society for the better by increasing democracy and individual responsibility”.

Its roots: “(A)nger with the banks and corporate greed (last month, vitriol was directed at water companies and the month before, energy companies; this week it’s pharmaceuticals) and a desire to create practical alternatives at grassroots level.”

He gives some recent examples of positive expressions of this trend:

  • A report released a week ago recommending that the Labour Party adopt as policy the re-nationalisation of the rail network and its incorporation as a mutual rather like the Co-op
  • Tory MP Tim Yeo pursuing a call for personal carbon trading, saying he will trial it in his own constituency
  • Vince Cable calling for more banks to be ethical and mutual like the Co-op bank and old-fashioned building societies
  • the growth in community renewable energy co-ops.

David Thorpe believes that a commitment to ‘fairness’  is at the heart of these examples:

“They all do away with the idea of ‘us’ versus ‘them’, where a minority own and grow rich on a collectively-used resource, and replace it with collective ownership, i.e. just ‘us’.”

Disillusionment is leading many individuals and civil society organisations to develop their own different agendas

As he notes, over the last few years, we have seen governments, corporations and their economists failing to learn from mistakes, failing to listen to public opinion and failing to come to meaningful solutions to the problems of worsening biodiversity, increasing climate change and economic chaos.

Many people are asking: what is the point in continuing with a one way dialogue and expecting change from these people?

To read about taking the railways back – the Rebuilding Rail report, taking the air back – Sharing for Survival, and taking back power, read the whole article here.

 

Now let’s have a proper dialogue on our cities’ governance

OK, so we – and all other places except Bristol – voted not to switch to an elected mayor. According to some Yes campaigners – whether through naivety or pique is I’m not sure – we will never have another chance to change.

Even leaving aside the fact that governments like to fiddle with local governance on a fairly regular basis and that political change does happen within cities, I just don’t quite get this.  If we had voted for an elected mayor, we would have an elected mayor whom wouldn’t be able to abolish without an Act of Parliament, and we might well get stuck into a similar Boris/Ken/Boris/Ken (or should that be Boris/Boris) rut as London – the novelty would wear off. Yes, there would have been positives, of course, but – last chance to change anything? Almost more the opposite. Having said no, we have more options.

While it looks likely to have had some benefits, the model we were offered was fundamentally flawed, and so was the way in which it was pushed upon us. With fairly typical arrogance, the Government never felt the need to give voters much clue as to what powers might be achievable, and never even bothered to provide information on the implications of the different systems where ordinary voters could find it (and in Birmingham neither did the council nor the campaigns). Even the day before the referendum, there was nothing on CLG’s website that told you how the system would be different under a mayor – leaving people to assume that the most alarmist ‘dictator’ version of events could be entirely true.

Meanwhile in fairly desperate economic times, the nod-wink offer of extra powers if we complied exactly with the Government’s plans for us, and never mind that this locked us out of BOTH the two other systems on offer let alone of negotiating change on our own terms – sounded to local people like blackmail; like offering an impoverished household a doorstep loan – they’ll explain the interest rates when you’ve signed on the dotted line, thank you.

As Chris Game presciently hinted in the Birmingham Post a few days ago, the Coalition could not have made it more compelling for the city’s population to vote ‘no’ if they had tried.

Now the referendum is behind us. Disappointed ‘Yes’ campaigners will, I’m sure, still want to see change. All the ‘No’ campaigners I know are deeply unhappy with the status quo and want to see change (just not government-bullied, ill-thought-through, power-concentrating change.) So would it not be better, rather than lamenting that we didn’t accept what was on offer with blind faith, to take the initiative, capitalise on the passion of people on both sides and begin dialogue on progressive politics for our area on our terms – and with better informed populations taking the decision?

For one thing, the city is still capable of re-running a referendum on elected mayors. This would be vastly improved by making more information available to voters on what they are voting for (or against). But better, we can investigate the potential for strategic collaboration – mayoral or otherwise – across local authority boundaries, leaving local authorities’ democracies intact, and push for a conurbation-sized city deal. Greater Manchester offers us one model. We can also press for urban parish or community councils. We can investigate the potential for citizen-led economic development programmes such as are successful in creating socially beneficial economies many parts of Canada and America, to balance the economically centralist drivers of LEPs. We should certainly discuss how local governance can get the best balance between diverse and decentralised representative democracy, efficient decision-making, transparency and resilience to vested interests. There may well be new Birmingham councillors keen to see change and willing to talk about new ideas.

One last point – if there had been a Yes vote, I would have written something very similar. Just as voting No is not a victory against Government bullying because change is still needed, Mayors would never have been a panacea. Whatever the outcome and however you feel about it, the referendum was only ever another beginning of another dialogue.

Karen Leach