What has the Preston model achieved so far

With community wealth building on the agenda at the Co-op Party and CCIN conferences, here is an update on the Preston model

The Preston model of community wealth building has prompted widespread interest in and outside the co-op movement, with its use of local spending and people-led employment models to lift the local economy.

The model was developed by Preston City Council and the Centre for Local Economic Strategies (CLES), working with local anchor institutions to play a collective role in delivering better outcomes for workers and service users. The model drew inspiration from the work of the US Democracy Collaborative in Cleveland, Ohio.

At the Co-op Party conference last weekend, delegates heard of efforts by the Co-op Councils Innovation Network to spread the model, while Labour/Co-op AM Huw Irranca-Davies said the Welsh government was also looking to adopt its principles.

But, six years on from the start of the project, what results has the Preston model had in its home city?

An analysis of anchor institution spend – from organisations such as the University of Central Lancashire (UCLan), and the city’s police force and hospitals – found the procurement spend retained within Preston was £112.3m, a rise of £74m from 2012/3. Taking in the wider Lancashire economy, the retained spend is £448.7m, up £200m.

After researching local businesses, the council found there was a lack of local suppliers to provide certain services, and worked with UCLan to encourage worker-led businesses to fill the gap.

Between them, they set up the Guild Co-operative Network and Preston Co-operative Development Network, which helped to develop worker co-ops in the catering, tech and digital sectors.

Individual anchor institutions have taken their own steps to drive inclusive development. The city council pays all staff at or above the Living Wage, and is pushing for all employers in the city to do the same. And it helped develop CLEVR Money, a credit union operating in Preston, Blackpool and Fylde, with which council workers can make payroll savings.

Lancashire Constabulary has also become an accredited Living Wage employer and is using its procurement process to drive social value. It has put social value requirements into its tender and contract process, is developing mechanisms to monitor the application of social value, and hosts ‘meet the buyer’ events for local suppliers.

This led to several small and micro local businesses taking part in the construction and fit out of the new police station in Blackpool.

The Office of Police and Crime Commissioner’s local spend rose from 52% of the total in 2012/13 to 71% in 2017/18.

Preston College had already been incorporating social value into its procurement process, but after the anchor institution work began, it has focused on creating employment opportunities by bringing in local suppliers to redevelop its premises.

And it works to improve the local economy and society, delivering English as an additional language as part of Preston’s City of Sanctuary status, offering voluntary experience in the local fire and rescue service and working with local SMEs to provide employment pathways for students and community members.

Cardinal Newman Sixth Form College introduced the Living Wage for all its staff in 2014, later extending this to staff working for its
catering contractor.

This process has seen Preston named most improved city in the UK in Good Growth for Cities 2018. It has moved from 143rd to 130th in the Social Mobility Commission Index (out of 324 local authority areas) and has seen 4,000 extra employees receive the Real Living Wage.

The council has two new worker-owned businesses, the Larder and Preston Digital Foundation, and is now working with Liverpool and Wirral to create a fully licensed North West Community Bank. 

“It is close to securing the £20m in initial funding which is needed to begin the process of applying for a banking licence.

“We’re keen to enable the financially excluded – people and businesses who find it difficult to borrow money – to get access to banking services,” council leader Matthew Brown told the Lancashire Evening Post.

“To support people locally, we have got to change the current economic model – and to do that we have to establish alternatives and make them popular with the people who live here.”

The plan – would see the bank open high street branches, with accounts and loans limited to individuals and businesses in the north west.

Cllr Brown added: “If 2% of people move their accounts to the new bank – or open their first accounts with us – then we can lend half a billion pounds to local people.

“But if you could get real grassroots uplift and support for the concept and encourage 10% of people to bank with us, then we could recirculate £4bn locally.”

He said the bank would offer extra resilience to the region’s economy, insulating it from the domino effects brought by financial crises like that
of 2008.

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