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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 8 basic principles, however the UK has focused on four main elements:
It is about ensuring that workers are paid a Living Wage, that employers invest in skills and training, that financial institutions invest in the productive economy rather than financial speculation and it is about exploring alternative methods of economic organisation and economic governance.
You can find articles addressing issues around community wealth building and the role of co-operatives at the London school of Economics and Political Science and Co-operatives UK.
Anchor institutions are those institutions in the local area that cannot relocate to another part of the country. They are things like local councils, universities and colleges, local housing associations, and the local emergency services, which are all invested in their local area and promote community well-being for that area.
They 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. The question is, how can they best co-operate to ensure this happens?
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) on various activities, in particular analysing the spend of anchor institutions. Together we have published two publications, which track and review this work. These two publications can be found in the download section on this page.
There is also a summary of the outcomes from our work with anchor institutions between 2012/13 and 2016/17 and a useful infographic on our progress towards the Fairness charter page.
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.
The baseline report and the technical report of procurement law for the project can be accessed in the documents section on this page, under creating a good local economy through procurement.
Utilising procurement is partly dependent on the application of the UK’s Social Value Act.
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.