What is Community Wealth Building?
Community wealth building is about creating a resilient and inclusive economy for the benefit of the local area.
Key areas of work
For Preston City Council, it is about providing value for our communities wherever possible. While the principles of Community Wealth Building cut across the entire organisation, key areas of work currently include:
- Progressive procurement
- How we spend money
- Social Value
- Benefits for the local area, such as employment, skills, real living wage, environmental impact, and greater wellbeing.
- Democratising the economy
- Cooperatives, economic inclusion, greater opportunities for all.
- Preston Real Living Wage
- Paying all employees a fair and reasonable wage.
To achieve the most value and benefit for the local area, we work closely and collaborate with Preston's anchor organisations and local partners wherever possible.
Four basic principles
Community Wealth Building is an approach, developed initially by the Democracy Collaborative in the United States, which aims to ensure the economic system builds wealth and prosperity for everyone.
The US approach is built around Five Pillars described on Democracy Collaborative - How is community wealth building practiced, however the UK has focused on four main elements:
1. Wealth that's there
Harnessing the power of the money that anchor institutions are spending on procuring goods and services. Aiming to localise as much of that spend as possible, securing investment in local supply chains and improving local economic competitiveness
Maximising the benefits of investment in staff by building a skilled and committed workforce and providing an exemplar to local businesses. Paying at least the Living Wage to all employees and encouraging staff to spend local and save local, including through Credit Unions.
3. Land, Property and Investments
Using anchor institution assets to lever in additional investment, to encourage the development of new businesses and support new methods of financial intermediation. To consider asset transfer to community or private sector interests where this best serves the interests of the wider community.
4. Economic democracy
Supporting the growth of alternative models of economic governance which give citizens greater investment in and control over their economic future. This can mean the development of new co-operatives as well as other ways of helping people feel ownership of assets and decision-making processes.
What are anchor institutions?
An anchor institution is a place-based organisation that that is invested in its local area and cannot relocate to another part of the country. Examples include local councils, universities, colleges, local housing associations, and local emergency services.
By their very nature, these organisations also spend substantial amounts of money that is retained within the local area. While most of their employees are likely to live within the local area, and spend their wages there, they also have significant procurement and investment spend which can also be spent locally.
They have a collective interest in seeing their local area improve and we are always looking for more opportunities to advance collaboration with them.
What is the 'Preston Model'?
The 'Preston Model' is another term used to describe Community Wealth Building, often used in the press when talking about how the council, its anchor institutions and other partners are implementing the principles of Community Wealth Building within Preston and the wider Lancashire area.
Where can I find out more information?
Preston has been at the forefront of implementing the principles of community wealth building in the UK.
We have collaborated with our colleagues at the Centre for Local Economic Strategies (CLES) since 2013. In May 2019 Preston City Council and CLES produced, CLES - How we built community wealth in Preston, which provides an overview of our progress and achievements.
A key aspect of our work with CLES has been the analysis of the spend of anchor institutions.
Together we have published two publications, which track and review this work.
Procurement and the URBACT Partnership
Procurement is just one tool that can be used to benefit the community.
We have developed our work on procurement through leading the Procure URBACT network involving 10 other European cities.
The project has sought to develop best practice on procurement and social value, consistent with both UK and EU procurement law.
Utilising procurement is partly dependent on the application of the Legislation.gov - Public Services (Social Value) Act 2012.
How Community wealth building works video
The Centre for Local Economic Strategies has made this video to explain how Community Wealth Building works.
They say too many people are facing rising poverty, inequality and financial insecurity while the powerful few get wealthier. Although rivers of wealth flow through local places, traditional economic development, focused on investment, diverts it, with profits and dividends often being extracted by investors.
Local wealth building is an alternative; it is a collaborative approach that builds locally controlled economies which put communities first.