By Rhian E. Jones
In May’s local elections, the North-West city of Preston was one of the few councils to resist the national swing that saw heavy losses for Labour. This echoed results in the 2019 General Election, where Labour in Preston again defied national trends.
Underlying this success is the development of the ‘Preston model’, a corrective to the failure of previous models of post-industrial regeneration which relied on the outsourcing of local services and external investment by private developers.
Taking inspiration and advice from places around the world which have implemented their own alternative forms of economic development, including Mondragon in the Basque Country and Cleveland in the US, Preston City Council has worked to build strategic alliances with local public bodies – known as ‘anchor institutions’ – to redirect their spending and investment from external suppliers to local producers and businesses.
Beginning in 2012, the council worked with six of the anchor institutions on their doorstep to reorganise their supply chains and open them to local competition, identifying where they could buy goods and services locally. Contracts covering a range of supplies, from office equipment to school dinners, were redirected from multinational firms towards local businesses with the aim of keeping more money in the local economy.
In 2013, six of the institutions that signed up for the effort spent around £38 million in Preston and £292 million in Lancashire as a whole. By 2017 this had grown to £111 million and £486 million respectively.
This strategy reverses decades of neoliberal doctrines which prioritised outsourcing and chasing inward investment from large multinationals through financial incentives, rather than investing in local infrastructure and development. Preston’s approach also brings in social and environmental goals, through embedding clauses in contracts that ensure the use of ethically sourced materials and hiring practices that target areas of high unemployment.
The central components of the Preston Model – identifying anchor institutions and redirecting their procurement processes – are part of an institutional strategy that other local authorities can also choose to adopt. But there are additional aspects to Preston’s “community wealth-building” approach which focus on greater economic democracy.
This includes strategically filling the gaps where no local businesses exist to bid for public contracts, through encouraging the growth of worker-owned cooperatives – both through support for start-ups in new sectors and through employee buy-outs, where business owners are selling their enterprises when retiring.
By 2020, Preston had achieved its highest employment rate and lowest levels of economic inactivity for over 15 years, and in 2018 had been voted the UK’s most improved city in which to live and work. Preston Labour Party has further pledged to expand the Preston Model to create a regional cooperative bank, North West Mutual, and to engage with the Lancashire Pension Fund to invest more in the local economy.
In places outside Preston – like Salford – where councils have also chosen to focus on local investment in services and infrastructure over outsourcing, Labour also performed significantly well on May 6th. With the material improvement delivered by these local strategies also delivering electoral results, Labour nationally could do well to learn from their success.
Rhian E. Jones is co-author with Matthew Brown of Paint Your Town Red: How Preston Took Back Control and Your Town Can Too, published by Repeater.
Attend the launch of Paint Your Town Red: How Preston Took Back Control and Your Town Can Too, on Thursday May 27th. Tickets here
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