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.”

 

 

 

Has Secretary of State (Elizabeth Truss) visited the LWM site?

A Lancashire farmer sends news of a ministerial statement made by the new Secretary of State for Environment, Food and Rural Affairs, Elizabeth Truss.  On 21st July she launched “A Plan for Public Procurement of Food and Catering Services”, which includes an emphasis on Government procurement opening up the public sector market to small and local businesses:

truss plan local procurement“It will allow more locally-sourced food to be served in our public sector organisations, which means more money into the local economy. It is also good for the environment, as the approach supports UK farm production standards and measures to reduce food waste. It will encourage healthier eating, foster a great connection with food, and celebrate local food”.

LWM’s MCED report (links via Mainstreaming Community Economic Development) includes a section on public procurement – ‘Realising the potential of local economic power’, which refers to the consortium approach used in Italy which permits local SMEs and social enterprises to overcome minimum turnover requirements etc in order to bid for major contracts while retaining local identities and maximising local benefits.

It also mentions a Buy for Good non-profit scheme being set up in the city, which awards contracts that “have a positive impact on the local economy’. Does this relate to Birmingham’s Business Charter for Social Responsibility, awarded by the city council?

Follow the link to read about the Charter’s emphasis on creating employment and training opportunities, buying locally when commissioning and contracting, protecting the environment, minimising waste and energy and employing the highest ethical standards in their own operations and those within their supply chain.

The ministerial statement may be read in full here: http://www.theyworkforyou.com/wms/?id=2014-07-21a.107.0

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Exploring the systems by which we organise our livelihoods

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In this Barrow Cadbury Trust blog, the co-ordinator of Localise West Midlands gives feedback on the opportunity to research the assumption at the heart of Localise West Midlands’ mission offered by the Trust.

The assumption is: “. . .that in a more localised economy, more people have a stake, which redistributes economic power and resilience, reducing disconnection and inequality . . . in need of exploration in the face of growing inequality and economic failure”. She continues:

“There are plentiful ideas around what we have been calling community economic development: social inclusion as CSR, community-led job creation, co-ops and social enterprises, local procurement initiatives. To many economic development practitioners these are very nice projects that go into a little box labelled “voluntary sector” and have little to do with the real economy, which is about big sites, tax breaks for multinational corporations – “prostituting ourselves for inward investment” as the Centre for Local Economic Strategies‘ Neil McInroy colourfully puts it.

“Our project, Mainstreaming Community Economic Development, is an attempt to take localised economies out of this little box. Firstly, to see the social potential not only of voluntary sector initiatives with social objectives, but also of private sector activity that is locally controlled and based, where the community’s participation is as owners, investors, purchasers and networkers . . . ”.

To read the whole article go to the Barrow Cadbury Trust blog