What is Preston Model?
The "Preston Model" is a term applied to how the council, its anchor institutions and other partners are implementing the principles of Community Wealth Building within Preston and the wider Lancashire area.
So this isn't just Preston City Council?
No. The city council is committed to implementing this approach and, as the "place leader" for the city is promoting the concept to other anchor institutions in and around Preston and to the private sector.
The implementation is something which is being shared across a range of Preston based anchor institutions, including
- Lancashire County Council
- University of Central Lancashire
- Preston's College
- Cardinal Newman College
- Community Gateway Housing Association
- Lancashire Constabulary.
This is important as many of these institutions have significantly greater spending power and assets than the City Council and by working together we can have a significantly greater impact on the future well-being of the city.
Local people taking back control
Community wealth building offers an opportunity for local people to take back control, to ensure that the benefits of local growth are invested in their local areas, are used to support investment in productive economic activities and that people and their local institutions can work together on an agenda of shared benefit.
So you've got it all sorted then?
Not at all. We may have started well, but we have only begun to explore how, for example, the wider benefits of procurement spend can be tracked down the value chain. Our work to date has concentrated on getting those letting the contracts within anchor institutions to change their perspective and approach.
We now need to do more work with businesses in the supply sector, to encourage them to raise their game and to engage more with anchor procurement. And, where there are gaps in the supply chain to explore the opportunities for setting up co-operatives or new businesses to meet that untapped demand.
Is it happening just in Preston?
Not at all. While we think the principles of community wealth building can be applied in any city or locality across the country, it is also true that because areas, issues, politics, resources and opportunities differ widely, the way in which different areas might apply those principles might differ from place to place.
Some places might find it easier to start with issues around local currencies or LETS (Local Exchange Trading Schemes) schemes, community banking or asset transfer to stimulate new business growth for example.
While some media attention has focused on Preston, we are conscious of our debt to Manchester who pioneered the principles of progressive procurement several years before we started. For more information see CLES - Manchester's progressive procurement
We are aware of lots of other good work being taken forward in places like Birmingham, Oldham, Salford, Kirklees, Islington, Enfield, Southampton, Wakefield and Bristol. We think that is evidence of the fact that there is a hunger and a desire to find practical ways to rebase local economies so that they operate in ways which are more inclusive and share the proceeds of growth more fairly across our communities.
How does this approach comply with EU Procurement Directives?
Yes, it is true that the European Union has some detailed directives which govern how procurement should operate. Firstly, these are largely based on rules previously developed and passed into UK law by UK governments and, secondly, the rules are not as onerous as you might think.
Primarily, these rules are focused above £180k for goods and services and above £4 million for works. A primary concern is to avoid institutions favouring national service providers at the expense of other contractors providing better value for the tax-payer. For more information see Tenders Direct - UK Public Procurement Thresholds
Legislation.gov - Public Services (Social Value) Act 2012 which is fully consistent with EU procurement rules, allows anyone letting a contract to operate a "weighting" system which scores a number of other criteria as well as price. These can include things like quality, commitment to apprenticeships, attitudes to skills and training, local labour recruitment, approach to sub-contractors and length of supply chains.
The UK government has said that, while it is committed to leaving the EU, it will passport into UK law the existing procurement directives.
Preston has been working, through our Procure (URBACT) project over the past three years with the European Commission and ten other cities across Europe on how to develop best practice on procurement which works for local residents and local businesses as well as for those anchor institutions letting the contracts.
You can find more information on how to let contracts in a way which is fully compliant with EU and UK procurement law in the final report of the project . Sections 2.2 and 2.3 provide a summary of the legal position.
So are you taking back control?
We are trying to. We know that the existing political, financial and economic systems are not delivering for our residents and our businesses.
Power and media attention are concentrated in London and the South East. Investment in housing, transport, the arts, culture, the media all these are disproportionately focused in one area of the country.
While the government has been making some welcome noises and moving forward about devolving power and doing more to encourage growth outside GLSE compared with examples in other parts of the world, these are pretty limited.
In addition, the government's ability to promote devolution is constrained by the amount of time and capacity taken up by the Brexit process. So we need to take what steps we can on our own rather than looking to government for permission all the time.
To think in that way is liberating as well as challenging.
But haven't I heard progressive procurement described as a "zero sum game"?
It's true that some commentators have criticised this approach as "protectionist" and suggested that, if every part of the country were to adopt this approach then we would be no better off in terms of net economic growth.
Three main reasons why this critique does not work
- First, no one can suggest with any credibility that all of local government, or the local public sector, will swing into action in the same way and at the same time.
- Second, it would only be "protectionist" to offer a contract to an inferior local contractor to shield them from competition of better performing and more keenly priced competitors. That isn't the case here. Under a community wealth building approach a local contractor may only be awarded a contract if they can show that they can credibly compete on price, performance and quality. It's about boosting local competitiveness not about sheltering local businesses from competition
- Third, the evidence to date suggests that this approach within Lancashire has enabled SMEs to compete with multi-nationals or other large firms based in Greater London and the South East (GLSE). We know from lots of research that this is not only the area of the country whose growth is outpacing that of all other regions, and has been doing so for decades, but is also best placed to withstand business and economic shocks. For more information see What Works Growth - Policy challenge: Responding to Brexit
- Fourth, by strengthening the capacity of SMEs to bid for contracts, this helps them to become more proficient and competitive across all areas, not just Preston and Lancashire.
We hope our approach to boosting our economy is helping to strengthen the economic bases of other UK regions and enabling the UK's economy to fire more effectively on more cylinders than before. For example, this presentation by Professor Phillip McCann highlights the UK's chronic economic regional imbalances - and what can be done about them: YouTube - City Horizons: Prof Philip McCann on the UK's regional economic problem