One City’s Experiment with Building a Democratic Economy

Stories of Community Wealth Building in Preston, England 

Tuesday, March 5 - Preston, England 

For the last 14 years, England has been awash in a sea of policies designed to slash tax rates, gut social systems, and erode corporate regulation. While many progressive local governments tacked to the center under this pressure from Parliament, one remarkable city has managed to do the exact opposite.

Sandwiched between Manchester to the South and the Scottish border to the North, in the historic heart of the industrial revolution, sits the City of Preston. It’s a place of anomalies. Nearly 10 years ago, Preston embarked on an ambitious program of ultra-localism that sought to redirect wealth back into the local economy, and place control back into the hands of people

So far, these policies have kept hundreds of millions of pounds in the local economy, strengthened small businesses, drastically improved the standard of living, and much more. The success of their policies even garnered recognition from PriceWaterhouseCoopers, which named Preston the UK’s “most improved city” in 2018. 

Today known as the “Preston Model,” this approach has been used as a template by city officials from Cleveland, Ohio, to Sydney, Australia, and sparked an international movement for a more people-centered approach to economic development. But sailing against the tide of national policy hasn’t been easy for Preston, and their success has been a double edged sword. 

Ever since deciding to apply for the Watson, Preston had been at the top of my list. So when I finally had the chance to spend four weeks there as my last stop in the UK, it was a dream come true. While my first two months in England had been focused on hands-on organizing with Citizens UK, my time in Preston strayed further into the policy realm. But more specifically, it was a place to see where policy and organizing met. In Preston, my question above all else was: in a “community-focused economy,” what is the role of community organizing in developing a people that wants to, and is capable of, being at the table? 

To answer that question, there are two important stories worth sharing. One showcases the enormous potential of a community-focused economic development approach, the other is a cautionary tale about what happens when such an approach puts creating programs ahead of developing people. 

The Harris Museam, one of the central anchor institutions in Preston worked with local contractors to ensure their funding stayed in the community. 

Story 1: A New Way of Economic Development

It began with the banking crash. For more than a decade in the early 2000s, the Preston City Council had bet everything on the construction of a massive shopping mall: the Tithebarn. The mall would sprawl across the entire city center and cost a staggering £700m to build. In a beaten-up city most notable for it’s empty shop fronts and having the highest suicide rate in England, Tithebarn was supposed to be the lifeline. 

But when the fallout from the 2008 recession reached Preston, the cranes stopped moving and businesses began pulling out. By 2011, the entire scheme was dead and the lifeline cut.

With public officials grasping at straws for what to do next, this crisis created an unexpected and unique space of opportunity. Into it stepped a newly elected council member with an unusual idea. 

Councillor Matthew Brown was – and still is – an anomaly himself; a member of the liberal Labor party whose commitment to economic democracy had seen him sidelined even among progressive colleagues. Taking advantage of the vacuum that was created with the mall’s collapse, his proposal was simple: pay people in Preston a fair living wage and put the government’s full support behind local businesses to grow and reinvest locally. I.e. invest in Preston’s people rather than trying to lure outside industry.

Councillor Matthew Brown, now leader of the Preston Council

Against all odds, his proposal succeeded and in 2012 the City of Preston became the first living wage employer in the North of England. To stop more money from leaking out of the economy the Council also took on predatory lenders and helped families sign up for community credit unions that invested savings locally. 

The biggest change, however, came when the Council began organizing the other major economic actors in the area. 

Preston has no shortage of big public institutions: the area boasts a top-level hospital, the regional university, a major public housing association, and the municipally owned Harris Museum. In contrast to large for-profit businesses, these “anchor institutions” are tied to the community and unlikely to leave the minute a better tax-break comes their way.  

With patience and persistence, Councillor Brown and his team gradually began working with these institutions to increase their local purchasing. As more and more anchor institutions joined this alliance, the results were remarkable. Local procurement in Preston’s County increased from 39% of the total money spent in 2012 to 79.2% in 2017 (their latest study was interrupted by the pandemic). In dollars and cents, this means an additional $254 million stayed in the community.

The strategies they used to make this happen are so seemingly self-evident that they tend to make listeners react with an exasperated “why isn’t everyone doing this already?” 

In one brilliant move, the county’s pension fund was moved from stock market portfolios to local investment. Money that would have gone into a general index fund, was instead used to build student accommodation in the city and refurbish a local hotel. 

In 2015, the county government wanted healthier meals for kids in local schools. They turned to the community. Because no one local business could handle the responsibility on its own, the council worked with them to break contracts into bite-size chunks. As Senior Economics Correspondent for the Guardian, Aditya Chakrabortty, documented: one “provided yogurt, others sandwich fillings, eggs, cheese, milk, and so on. One contract was split into nine different lots. It meant officials actually shaping a market to fit their society – and it worked. Local suppliers using Lancashire farmers won every contract and provided an estimated £2m boost to the county.” 

Perhaps the best example came during the first months of COVID-19, when 80 employees were set to be laid off from a local manufacturing plant during lockdown. Instead, the Preston Council worked with the employer to repurpose the manufacturing plant to make masks and other Personal Protective Equipment (PPE) that was then purchased by the anchor institution network - especially the hospital. The company made money, people kept their jobs, and the spread of the virus was slowed. 

Talk about an economy that actually works for people! 

So what’s the flip-side?

Story 2: Where Are The People? 

When I sat down with Councillor Brown for lunch, he was upfront about the challenges facing their work going forward: “ask your average resident what they think about the Preston Model or the philosophy of ‘community wealth building’ that it’s based on and 9 out of 10 wont have a clue what you’re talking about.” “That’s a problem,” he continued, “for an economic idea that says it puts people at the center.”  

Where the Council has had remarkable success organizing anchor institutions to keep their money local, it has struggled to truly engage local people. And it needs local people to be engaged. Small business creation and growth is the other side of the coin.

So far, several new cooperatives have been built, but most communities are resistant to both the business-model and the workload of co-ops. When I asked one of the administrators of the cooperative development network how much interest there was in the tools they had built to help communities launch co-ops, her grudging response was: “let’s just say my inbox isn’t overflowing with requests.”

Chris Davis is one community leader who is taking advantage of these tools. Working out of a community center that he co-founded, Chris and a team of neighbors from across the working-class neighborhood of Brookfield run Retrofit+, a cooperative business that improves the energy efficiency of local buildings and creates new employment and training opportunities for members of the community. 

The work the team is doing is extremely impressive. They have local builders who are knowledgeable about the retrofitting process, a grant to pilot a retrofit in their own community center which they will use as a model for others, and they even have a pipeline of folks in the community who are already being trained in highly skilled, high wage jobs.

When I asked Chris why he is one of the few to take advantage of these tools, he said it was simply because he had the chance to be in the room when they were being developed. “I would hop into zoom calls and the screen was full of professors, officials, and non-profit employees, but I was one of the few regular folks from the community.” 

(L-R) Dr Ali Al-Assam of the NewsSocial Cooperative, Chris Davis from Brookfield Spaceplace and University of Central Lancashire project assistant Alina Belousova presenting a new community asset mapping tool.

I call this problem the ‘if you build it they will come’ fallacy – and it is far from unique to Preston. It involves a group of well-meaning experts or enthusiastic individuals coming up with a program to address a very real community need only to find that when everything is put in place and polished up nobody wants to use it (it’s a trap I have fallen into myself).

Many brilliant programs and policy initiatives have ended up in the graveyard of abandoned ideas not because they are ineffective, but simply because the designers created a program before they had built a constituency.  

In reality, the more appropriate axiom is: ‘if they come, you should build it.’ Start with where people are at and if there is energy, move forward together.

One Cooperative Development consultant I met in Preston hit the nail on the head when he said “we’re beginning to turn the corner from saying ‘cooperatives are great and you should make one,’ to instead asking ‘what are the challenges in your community? Maybe a cooperative is one of the tools that we can help you use to fix it.’” 

The Preston Model: Not a silver bullet, but the right direction

Throughout this experience, I couldn’t help but compare Preston with Barcelona. Objectively, the work going on in the two cities has the same goals: use corporate investment to strengthen the common good, enable people to have a larger say in politics and the economy, invest in things that people actually need, not just what will turn a quick profit. But the way they go about it couldn’t be more different. 

In Barcelona, they didn’t start by creating a suite of tools or a handbook for how to found a co-op. Instead, organizers went into neighborhoods and asked “what are the issues facing your family?” In the neighborhood of Sants it was childcare and fresh groceries. So they issued a challenge: “do you want to do something about it?” And when people emerged from the woodwork to take on those challenges only then did they present the cooperative as one possible tool. Now, however, there are over 35 community-run co-ops in the Sants neighborhood alone as a result! 

From what I saw in Preston, people seem to be learning from the limitations of their original top down approach and there is a growing interest in incorporating more of these community organizing practices. It is a slow, relational work, but I truly believe they are capable of doing it – especially with the help of the talented organizers like Chris Davis and Davinia Jackson (from Citizens UK) who are already laying the foundations.

In answer to my guiding question, it seems that a community-focused economy will never be possible without the kind of political education and agency that good community organizing provides. And at the same time, the Preston Model offers community organizers a novel vision for new policies to push for in their own local context that have the potential to pay dividends far into the future. 

In the end, however, I think the best lesson to walk away with is one that Guardian Columnist Aditya Chakrabortty shared with me: The most important thing about the Preston Model, is that it exists at all - that one city had the courage to do things differently."

Fun fact! Wallace and Gromit's roots lead to Preston through their creator Nick Park who was born in Preston's Brookfield Park in 1958. 

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