Community wealth building: tackling inequality and poverty locally

Many local places face significant challenges. On the one hand, sluggish or no growth, coupled to rising inequality and poverty is placing significant pressure on public services. On the other, austerity and cuts to local government and public services are reducing the ability by which the public sector can act. There is a lot of commentary about the causes of inequality and poverty but a lack of real action.

For the Centre for Local Economic Strategies (CLES) there is much we can DO if we harness the power of local public sector and other anchor institutions within place to think and work differently. We believe that by getting all actors within a locality across the public, commercial and social sectors working collaboratively we can make a real difference to peoples’ lives.

CLES are currently working in Preston with the City Council and five anchor institutions based in the City to embrace such place based thinking. Using public procurement as a starting point, we are seeking to harness and maximise the benefit that the £800m plus spend of those six anchor institution brings for the Preston and wider Lancashire economies. The work is being driven by a local political priority to address social exclusion in the City but also a drive by the local authority to steward more progressive thinking across anchor institutions and their supply chains.

Our objective is simple: to use public spend across anchor institutions to bring wealth to Preston in the form of jobs, business development, the alleviation of poverty, and potentially the formulation of new cooperative models of service delivery. To meet this objective, we are and will be undertaking a number of activities.

We have already analysed the supply chains of each of the six anchor institutions and particularly the extent to which spend is with Preston and Lancashire based organisations. The findings are revealing with just 5% of spend across the anchor institutions being with organisations with a base in Preston and 39% with organisations with a base in Lancashire.

The above provides a baseline through which we will seek to effect change in the behaviour of anchor institutions to maximise community wealth and alleviate poverty through spend. We are doing this through a number of means. We are identifying spend which leaks outside of Lancashire and assessing whether it is ‘influenceable’ or not. For sectors where spend is ‘influenceable’ we are developing a database of Preston based businesses which could potentially deliver those services in the future. We are also scoping the potential for whether certain services can be potentially delivered by new cooperatives.

Finally, we are working with Preston City Council as a starting point to identify ways in which they can adapt their commissioning and procurement practices in order to maximise benefit.

The project draws upon the progress which has been made internationally in places like Cleveland in the United State and Mondragon in Spain which have focused upon creating community wealth through cooperatives; and we believe Preston is the founder of a new place based approach to public service reform, which can advance local jobs and social justice in a UK context.

By Matthew Jackson, Associate Director of the Centre for Local Economic Strategies (CLES). CLES is the UK’s leading research organisation dedicated to local economic

This is a guest blog and the views of the author are not necessarily those of The Equality Trust.