On a wall in Preston’s grand, neoclassical Harris Museum there is an etching of Karl Marx addressing a crowd of the city’s workers in the shadow of a mill and a smoking chimney. “The eyes of the working classes are now fully opened,” reads an accompanying quote. “They begin to cry: Our St. Petersburg is at Preston!”
“Yep, he visited,” Matthew Brown, the leader of Preston City Council says with a smile. “You might want to take a picture of that.” Brown leads one of the most talked-about local authorities in Britain. To its proponents the Preston model represents Labour’s best chance of bringing prosperity back to those left-behind places whose voters have started to jump ship. If it can do that, the argument goes, the party will have a much better shot at grabbing the keys to Downing Street.
The Preston model is built around something called community wealth building, an economic strategy which, in the simplest possible terms, seeks to spend as much taxpayer money as possible locally – and then keep it there. For nearly a decade now, the city has been pursuing a sort of radical localism (or “municipal socialism”, as Brown puts it) which encourages ‘anchor institutions’ – like the council, university and hospital – to procure goods and services from local businesses and recruit local people.
In Preston, the city where Richard Arkwright jumpstarted the cotton trade, it was a lifeline.
“From the late 90s, the council tried to facilitate a £700 million, retail-led regeneration project,” Brown explains from across his paper-strewn desk in the city’s town hall, a binned polythene takeaway box hinting at a late night in the office. The Tithebarn would have loomed over the city, bringing with it a Marks & Spencer and an enormous John Lewis. It was, Brown admits, “the only game in town for more than a decade”.
Then came the banking crash and, soon enough, John Lewis pulled out. “We had to think again,” said Brown, a councillor at the time.
For Prestonians, “the realisation occurred that nobody is coming to save us,” says Ted Howard, an American social entrepreneur seen by many as the godfather of community wealth building. Preston borrowed heavily from the model established by Howard in Cleveland, Ohio, where he helped establish a string of worker-cooperatives – an industrial-scale laundry business among them – to supply the city’s own anchor institutions.
“These big investments from the city or international or whatever are not actually coming – we’re going to have to find a way to do it for ourselves,” Howard explained over Zoom from his sun-soaked home in Colorado. “The question became: what do we have here locally that we can leverage for benefit?” It wasn’t innovation for innovation’s sake. Preston was battered by austerity. The council saw its annual budget cut by a third; employment schemes and skills training programmes were slashed. “We didn’t have any money,” Brown says matter-of-factly.
But things are changing. Before the pandemic, the city’s employment rate was upwards of 80 per cent. More people in Preston are paid a real Living Wage of £9.50 an hour than in any other council area in Lancashire. The city itself is buzzing, too. Strolling around the city centre, it feels like something is being built on every corner – whether it’s new social housing or a publicly-owned cinema. Preston has been named the most rapidly improving urban area in the UK to live and work.
And Brown is reaping the rewards at the ballot box. Preston was the only Labour-led authority in Lancashire to retain all its seats in the locals. The party also enjoyed success in other places enacting bits-and-pieces of the community wealth building model, like Wigan and Salford – rare bright spots on an otherwise dismal day for Sir Keir Starmer.
Yet the embattled Labour leader has appeared reluctant to praise Preston publicly. “It’s peculiar,” Howard said. “I think they see it as a kind of Jeremy Corbyn and John McDonnell hangover, therefore they can’t like it. It’s cutting off their nose to spite their face.”
Brown, for his part, believes community wealth building could win over Red Wall voters. “Trying to put more of the wealth of our local and regional economies in the hands of workers through worker and employee ownership is something I believe would be quite appealing,” he said.
McDonnell, the former shadow chancellor, agrees. “It’s certainly an idea whose time has come,” he told TLE.
It’s not as if everyone in Preston is immersed in the minutiae of the Preston model. Before my visit, a press officer warned that I would be greeted with bemusement if I toured the local pubs vox-popping regulars on the intricacies of community wealth building.
Plenty of “working-class cynicism” towards politicians remains – and “rightly so”, Brown adds. “I’m trying to build the community up with the powers and levers we have, but it’s a struggle every day because the economy and policies is rigged towards the interests of the wealthy, in my opinion.”
He is doubly sceptical of a media narrative which paints the picture that “everything is rosy here – it’s not”. While eager to spread the word about the success of the Preston model, he would rather journalists come back and look around in 15 years. “We’ve got strong foundations, but the more transformative aspect of it” – a community bank, a network of worker-owned co-operatives – “is still on the way.”
Nonetheless, Preston is a ray of light on an otherwise gloomy electoral map for Labour. There are others dotted around, especially in the North West – and most of them seem to be linked by a common thread: a bold economic programme, honesty and openness with voters, and a willingness to make an argument for your ideas.
Paul Dennett, the self-described “sensible socialist” Salford city mayor, increased his vote share to 59 per cent last month, a ten per cent spike from his first election in 2016, and good enough for a first-round victory. He explained that local voters “know exactly what we’re campaigning on and what our policy offer is”.
Brown said something similar. “A lot of our success, I feel, is the quite direct and radical messages we had about wanting to really try and change our community,” he said.
The subtext is clear. “We’ve got to be really honest,” Dennett, a painting of Salford’s skyline intertwined with Labour-red roses behind him, told me. “We went into this set of elections not fully knowing what the policy position of the national Labour party was, which makes it difficult for us when we’re asked questions about the national Labour party on the doorstep – there’s no doubt about it.”
That message was echoed in Wigan, another town in the North West which has enacted tranches of community wealth building and enjoyed success at the ballot box.
“There’s no vision,” Keith Cunliffe, the council’s deputy leader, said. “If you look at what’s happening in Labour-controlled local government there’s plenty going on, and one of the common factors is community wealth building.”
Cunliffe has helped implement the Wigan Deal, a series of pledges agreed between the council and everyone who works in the city – “we’ll keep your Council Tax low if you recycle more and support local businesses”.
The Deal existed before the council started exploring community wealth building, but the two concepts are merging into what Cunliffe considers a “Wigan approach” to the idea. Like Preston, the council is exploring ways of bringing community wealth building principles into procurement, recruitment and asset management.
Proponents are adamant that it can work beyond the North West. “The principles are exactly the same,” Brown says. “Look at what’s happening already. [Liverpool City Region Mayor] Steve Rotheram has established a land commission to bring community wealth building into land and assets across Merseyside. In London, Sadiq Khan announced in March that he’s getting the big anchor institutions – hospitals, universities, councils and so on – to look at how recruitment and procurement can lead to a post-Covid recovery.”
He points to North Ayrshire and the Welsh Assembly – where, like Preston, a community bank is being established – as promising examples. Nicola Sturgeon’s manifesto for last month’s Holyrood elections featured a pledge to enact a Community Wealth Building Act, to “redirect wealth, control and benefits to local economies”
“It’s still in its infancy,” Brown admits. “But the fact that we’re talking about the ownership of the economy, which was something that was hardly discussed ten years ago at a local government level – I think that’s really important.”
Is anyone listening? Dennett, who has appropriated chunks of community wealth building in Salford, believes local leaders are “being heard” in Westminster. He and his team often meet members of the shadow front bench, and he does believe that he is “being engaged”.
“It’s going to be interesting to see what happens now when it comes to manifesto creation and the policy process,” he says. “We’re really eager to put forward progressive visions for local government.
“We’ve got lots to say on housing and inclusive economies. It’s going to be interesting to see where the public lands on some of these issues. I feel the party is listening, I just think we need to be a bit more public about what our position is on some of these things.”
Brown is less certain. He acknowledges that the Leader’s Office is “probably not focussing on the internal policy machinations of Preston city council”, but is quick to point out that Angela Rayner did attend the council’s most recent manifesto launch. “And she was actually travelling on a train at the time, which shows the commitment she had,” he notes with a smile.
Ed Miliband, the shadow business secretary, and Jonathan Reynolds, the shadow work and pensions secretary, are also name-checked as being “very keen on these ideas”. Aware of the Starmer-shaped elephant in the room, Brown hastily adds: “And Keir did mention community wealth building in his campaign to be leader”. When I point out that Starmer mentioned a lot of things in his campaign to be leader, he pauses. “Yes he did… but, uh, but anyway…”
McDonnell, now exiled to the backbenches, is adamant that community wealth building is not just “a practical deliverer of change on the ground”, but a proven way to win elections.
“Community wealth building was to be at the heart of Labour in government if successful in the 2019 election,” he told TLE. “An embryonic community wealth building unit had been established to take into government.
“It should be one of the core bases of the development of the next manifesto. It is no longer seen as a fringe experiment but now has a proven track record. It has the potential to transform the relationship between the state and community both locally and nationally.”
Community wealth building could also lend a hand in the battle against the next big crisis: climate change.
“In Cleveland, we built an industrial-scale, hydroponic greenhouse to grow millions of heads of lettuce,” Ted Howard explains. “Because Cleveland’s climate is so cold, the growing seasons for leafy greens is short; so unless it’s July or August, if you’re having lettuce it’s coming from California or Arizona or Mexico – that’s basically 2,000 miles of carbon-based transportation. Localising – keeping everything closer – makes a lot of environmental sense.”
Preston has been encouraging its pension fund to divest from fossil fuels, asking it to invest directly in clean energy projects instead. Brown is looking into whether “we can get community wealth building into retrofitting”, and is keen to set up a community energy programme. “But we need powers and resources from central government to deliver it, or else it just becomes a talking shop.”
This, in many ways, is the crux of the issue. Community wealth building was forged out of necessity. In Preston, it’s proved an effective way of countering the impacts of austerity on local government – but if money doesn’t come from Westminster, that’s all it will be.
“There’s loads of things I’d like to do now, but I just don’t have the money to do it,” Dennett says. “I’d love a significant investment from the Treasury in Salford – but they’re targeting investment in certain parts of the country. It’s clearly pork barrel politics.”
Nonetheless, the pandemic might have hastened community wealth building’s hour. After a year in which we’ve been confined to our homes, those places outside our front door – local businesses, parks, people – have assumed newfound importance.
Whereas the state’s response to the pandemic in the early stages of the crisis was often lacking, the public’s was cause for optimism. Thousands of spontaneous mutual aid groups popped up across the country – supplying the vulnerable with food and medicine, working to alleviate loneliness and marshalling community resources. When you boil it down, the radical localism being enacted in various forms across the North is an attempt to codify that collectivism: giving local people more power over their places.
Some have even suggested that community wealth building could do for the left what Brexit did for the right: provide a sense of democratic participation and give communities the feeling that they are, to coin a phrase, taking back control. Compared to the same-old, “neoliberal, extractive development model” – which Brown proudly “rejected” in Preston – it sounds appealing.
“Politics has changed forever,” Brown explained. “We’ve had an economic crash linked to deregulation and privatisation. From that we’ve had austerity because we’ve had to bail out the economy, which has obviously changed everybody’s lives.
“Linked to that is a desire to kick the establishment by voting the European Union – that is working-class people having a go at what they perceive to be the establishment. Now we’ve had the worst public health crisis since World War Two. If you take all that together, I don’t think an appeal to moderation is what people want to hear.
The message to Keir Starmer is clear. “If we don’t offer transformative change, other parties like the Tories will pretend they’re doing it – when actually they’re doing very little.”
Related: Labour should embrace ‘transformative’ Preston Model, council boss says
