A project to explore how the commons transform public action in Europe
Community Wealth Building in the UK : resilience by relocation of the economy

How have cities in England built their resilience after the 2008 crisis, notably by relying on the relocation of the economy, civic empowerment and a new social contract between the administration and local players? What parallels can we make with the approaches to developing the local economy in France? What inspirations to draw from it for the period we are going through, in resonance with calls for a more territorialized approach to the economy ?

We took advantage of this still confined month of May to share with our members the Community wealth building approach – CWB, which we discovered during our learning trip to England as part of the Enacting the Commons project.

Part of the municipalist current, this approach was designed to help cities victims of radical crises to recompose their model from an “extractive” economy to a “regenerative” economy, ensuring that the economic system creates wealth and prosperity for everyone, locally. It has thus developed in the United States and in Great Britain in former industrial cities such as Cleveland or Manchester, where the local economic and social crisis has been coupled with successive waves of privatization and a drastic reduction in the means of local authorities.

Last February, we met in Manchester Neil McInroy and Matthew Baqueriza-Jackson from the Center for Local Economic Strategies – CLES, one of the spearheads of this approach in Great Britain. They both agreed to speak at this webinar to present their work to us, in England, Scotland and Europe.

Community wealth building, or the economy through the lens of social justice

The Center for local Economic Strategies is a “think and do tank” that advocates for an economy serving social justice, efficient public services and local resilience. They help British cities and communities such as Wigan, Preston, Islington, as well as certain Scottish territories to appropriate the CWB approach. Close to British Labor and carrying an ambition for radical transformation, CLES also advised Jeremy Corbyn in the context of the 2019 general elections. They work in close partnership with Democracy Collaborative, an American public transformation laboratory which seeks to promote a systemic approach to the relocation of wealth in the service of more democratic economic models.

By way of introduction to Community wealth building, Neil takes as a starting point the observation of the failure of the liberal market economy to reduce inequalities: “The usual development theories explain to us that economic growth reduces poverty; in reality, we observe that wealth is extracted from the territories in which we live. In the UK, for example, the 5 richest families hold the equivalent of what 13.2 million of their poorest citizens have. In the 1960s and 1970s, thanks to the work of the unions, redistribution was more important, but recently, this concentration has intensified and the Covid-19 crisis only highlights the weaknesses of our model and its lack of resilience.”

Based on this observation, the Community Wealth Building approach seeks to open new perceptions in the way we think about the economy, by proposing to re-organize the wealth of a territory on a new “social contract” in the service of inclusion and community. The goal is no longer growth, but social justice. “In essence, the approach is very simple: taking the territory as a starting point : where does wealth come from and where does it land? How to make sure that it does not evaporate, that there are no leaks, captured by the richest? In three words, we seek to Localize, Socialize, Democratize. ”

A systemic approach

Concretely, CWB is organized into 5 pillars:

i / an alliance of local public institutions (communities, universities, hospitals, etc.) to redirect public spending locally;

ii / stimulating the capacity for initiative and the emergence of a plural and democratic local economy – notably based on a fabric of local or social enterprises, workers’ cooperatives, etc. ;

iii / Local redirection of investment from local banks and pension funds;

iv / decent conditions of employment and wages for workers;

v / the use of land and property in the service of local residents and groups.

It is based in particular on the mobilization of local public institutions (anchored institutions) and on the re-appropriation of issues of general interest by them. Universities, local administration, hospitals, … indeed have an interest in the territory and its development, of which they are also economic actors, as an employer, buyer, etc. They can thus, in a regenerative approach, contribute to democratizing the local economy by relying on local actors, businesses of the territory and the SSE, who are less likely to extract wealth from it; users and employees are more systemically involved, and governance is shared. Conversely, an extractive economy tends to have a weaker relationship with the territory, users are passive, employees work for shareholders and governance is vertical.

Among the CLES partners, the city of Preston (150,000 inhabitants, north of England) has become a textbook case. In 2011, a major development project based on significant foreign investment was abandoned. How to re-think the development of this former industrial city which is struggling to recover from the decline of its activity? The CLES notably helped them to analyze their spending, to rethink their public markets and to develop public services rooted in local entrepreneurship. The contracts were to create new jobs on the territory, cooperatives have developed. The results are largely positive: Preston saw the creation of more than 1,600 jobs, 4,000 additional people paid a living wage, an additional 70 million pounds for the city’s economy, as well as a marked improvement in living environment. “Today, because of the Covid-19, public procurement rules have evolved in Europe and we believe that this constitutes a real window of opportunity to relocate public purchasing.” the city’s success has been widely publicized, including in media such as the Guardian, or even … on France inter.

Another CLES partner, the National Health Service – NHS, which today no longer considers itself only as a health player but also an economic player impacting its territory, as an employer, buyer, developer, etc. Another example is the town of Wigan, following a series of crises, the most recent of which was the drastic reduction in allocations to communities threatening the sustainability of existing public services. She relied on the reading grid of the community wealth building to imagine a new co-responsibility contract between residents and administration, the Wigan deal. Each city has therefore developed its own entry point, according to its challenges, its administrative culture, etc.

Procurement, a CWB entry point

Matthew Baqueriza-Jackson, as part of the European Procure Network, tackled the issue of public procurement, through the prism of the CWB and from a European perspective. “For many, prucurement is boring. For us, the subject is particularly interesting for 3 reasons: In Europe, it is estimated that we spent more than 2000 billion euros on procurement per year. In addition, procurement can be a good lever to address social (job creation for example) and environmental issues. Finally, it is about our money: we have a democratic right to know how public spending is managed. The Covid-19 crisis gives us new opportunities to reflect on this question. Who are the city suppliers? Are they paying enough taxes in these countries? Who are the local businesses? Do they have the possibility of responding to public orders? … ”

The network brings together 11 European cities, with the objective of developing their purchasing methodologies, developing, through training, the integration of social and environmental criteria, and driving transformations at community level, with the adoption of a European agenda on the subject. The Commission, which itself still has a very bureaucratic approach, is gradually starting to integrate these questions. With each city, it involves: i / Analyzing expenses. Where does the money go (sector, geography …)? ii / to develop a strategic purchasing plan. What challenges does the community want to meet? iii / To define a framework for purchases with social value. Can they create jobs? improve the living environment?

The first step notably involves the formulation of new tools for analyzing and measuring the performance of administrations. “There are huge changes going on in this area. Four years ago, we created our own evaluation framework to analyze local spending, with rules and indicators inspired by the work of Economy for the Common Good. Wales, for example, adopted an act for the welfare of future generations a few months ago. The Covid-19 has extended our awareness of what value and efficiency are: we would like to see the end of New Public Management and cost-based efficiency, which is maneuvering in England and taking us straight to the wall . It’s a very powerful notion that is struggling to disappear. “

It is also a question of involving the inhabitants in the markets: “This can go through an association of users in the definition of specifications for public contracts for example. This is done in mental health and youth services, but should be extended to other services. When it comes to public services, it’s not just a contract between a buyer and a business. There is a very strong link between the Community Wealth Building and the new municipalism.”

What about industrial leaders and other large private players? How do you convince them to adopt such approaches? “They are well aware that there is a new demand for value and that they will have to relocate. There is a very strong momentum and those who do not seem fair to the communities will find it difficult to adapt. In Poland, companies want to highlight their CSR but I don’t really like that, these considerations should be anchored at the heart of their strategy. We need to push them to go further and get municipalities to work with chambers of commerce to change the culture of these big companies. ”

The Covid-19 crisis, an accelerator?

“In recent weeks, we have had many conversations in Scotland and Wales who are considering Community Wealth Building as a prospect for reviving their economy, in this context of globalized health crisis. We seek to overturn the current dominant paradigm in order to propose a new one where democracy works for everyone and where we are able to build new environmental models. This need to change paradigm is more and more widely shared. For several years, even the London Financial Times and other rather mainstream newspapers have argued that it is time to “reset” our thinking. ”

“Usual development theories tell us that economic growth helps erode poverty, but in reality we observe that wealth is actually extracted from the territories in which we live. The health crisis has highlighted our vulnerabilities, but it has also revealed the importance of the everyday economy: health, food, etc. This has reshuffled the cards of the professions, and because we have been confined, many ‘we have realized the importance of local life, of parks, of our local systems. As a result, the limits of growth thinking start to appear. ”

The CWB in the light of the ecological crisis

A movement of redeployment of the CWB matrix in the service of the ecological transition of the territories and a “Green new deal” is taking shape today. The city of Preston, for example, declared in 2018 a “climate emergency” situation and developed to respond to it a joint action plan with all of the public institutions in its territory (integration of environmental and zero carbon standards for spending public, etc.); cities such as Barcelona have re-municipalized the management of resources such as water in the form of public-commons partnerships, serving the best in terms of the environment or public health; the growth of local energy cooperatives in the Greater Manchester area has contributed to the creation of new ‘green jobs’, etc

Here is a recording of this discussion :


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