For three years Preston City Council has been solidifying its commitment to an alternative approach to economic development through co-operative enterprises. Over that time the Labour-run council has designed a number of projects to raise awareness of the co-operative model.
One of these initiatives is the Guild Co-operative Network, which brings together members of existing and prospective co-operatives to provide mutual support and advice. Notably, the council has said it has not opted into the agenda of the Co-operative Council Innovation Network and, thus, it does not call itself a ‘co-op council’.
Labour Councillor Matthew Brown, said the council has “taken a different approach to the advancement of co-operatives by avoiding the outsourcing of services which in the vast majority of cases function extremely well in local authority ownership”.
He added: “Instead we have sought to influence the local economy through promoting worker led co-operatives especially with strategies to promote succession planning, support potential new start ups and through procurement strategies. This is in addition to supporting a local food co-operative and establishing a new credit union.”
The Guild network supports those interested in forming or developing co-operatives. Every two or three months, members get together to promote their co-operative or receive one-to-one business advice. More recently, the council organised a workshop where senior managers responsible for procurement from local anchor institutions discussed how to support local businesses.
The workshop featured a presentation by professor Richard Wilkinson, co-author of The Spirit Level: Why Equality is Better for Everyone. “Local authorities are important local actors for building economic fairness from the ground up,” said Professor Wilkinson.
The council does not provide grants or enhanced business support for prospective co-operatives. Its priority, it says, is to publicise the benefits of the co-operative business model for the local economy.
Over the past six months, the Centre for Local Economic Strategies (CLES) has been working with anchor institutions in the city, including Preston City Council, Lancashire County Council, Community Gateway Association, the Policy and Crime Commissioner, Preston College, Cardinal Newman College and the University of Lancashire to analyse procurement practices. CLES is looking at how much of the procurement of these institutions actually stays in the local community.
Another speaker at the event, Matthew Jackson, head of research and associate director at CLES, revealed some of the findings of the research carried out by CLES. So far, the findings suggest that institutions could spend more locally. According to CLES’ research, the seven anchor institutions spend £750m every year on their top 300 suppliers.
“A lot of this wealth is not being spent within the local economy. It’s leaking out of the local economy,” explained Labour councillor Matthew Brown. He added that the aim of the conference was to put forward a unified statement across these anchor institutions, to show their commitment to the local economy.
The council said it will continue to work with CLES to assess the viability for increasing local purchasing and creating co-operatives to fill this need. Its approach to co-operative development is inspired by the Cleveland Model in the United States. Through the Preston Community Wealth Creation Initiative, the council aim to focus the purchasing power of anchor institutions in Preston, such as universities or hospitals and to encourage them to use the services of local co-operatives.
Unlike conventional businesses, co-operatives are rooted in the local community. “It is very unlikely for a co-op to move. They are more likely to grow in that area,” said Gordon Benson, european funding manager at Preston City Council.
As part of its campaign to promote co-operatives, the council has also worked in partnership with Co-operatives UK on Simply Buyout, a guide to employee buyouts and becoming an employee owned business. The council will use this pack to promote employee ownership to employers through the local Chambers of Commerce, employee organisations and trade unions.
“The main challenge is the culture – people don’t think that this is an option, but look at successful enterprises like John Lewis,” said Cllr Brown, adding that the council will continue to raise awareness of employee ownership and co-operatives.
“It’s going to take some convincing because we’re talking about a completely new way of thinking,” he said. The Labour councillor hopes that other local authorities will follow Preston’s example, replicating the wealth-building model. In 2008, Preston City Council was the second council in the country to propose the living wage. Now over 100 councils have adopted the living wage. Matthew Brown hopes the wealth building initiative will get the conversation going across the UK. “We’re quite forward thinking in Preston,” he added.