Covid19 is a big opportunity for new economics

By Martyn Rawlinson, Preston Council Cabinet Member for Resources and Performance

It's over two years because the 'Preston Model' became the darling of other economics. When progressive Guardian commentator Aditya Chakrabortty championed the little Lancashire city's anti-globalist approach to economic recovery in January 2021, local government's relationship using the Community Wealth Building movement was given a violent shove from flirting to semi-serious. The amount of councils at least batting their eyelids at wealth building is approaching three figures, as well as devolved government bodies such as the Welsh Assembly.

Despite the Preston Model being conceived by two Councillors and two economists inside a local pub six years earlier, its fame was premature; it had been the preparatory work with creating worker co-operative businesses that became celebrated, as opposed to the long-term aims. The research undertaken, of where local 'Anchor Institutions' like councils, the university, colleges, housing associations etc. were spending their cash, helped re-direct over lb200million in to the local economy in just 2 yrs. Preston's procurement strategy also became an EU project in itself, developing and sharing good practice on public sector spending across the continent.

Worker owned businesses

Preston has become actually pushing on with creating more worker owned businesses in the city after receiving funding from Soros' Open Society vehicle. It was always the primary strand from the model following inspiration in the Evergreen Co-operatives in Cleveland (Ohio) and the Mondragon Corporation co-operatives umbrella vacation;  Mondragon to be the perfect example of the 'whole place' co-operative strategy having a bank, a university, welfare and support systems alongside the 100 worker owned businesses.

Covid19 also required a co-ordinated, co-operative response. The united kingdom state financial package was unprecedented; welfare on the massive scale, seized upon by progressives to push ideas like Universal Basic Income along with a living wage for key workers. Councils happen to be in the centre from the support for all those shielding from the virus, disseminating information, food and other support services. 

Temporary economic props

Unfortunately, the government's uncharacteristically socialist measures appear a very temporary economic prop and the biblical efforts of local authorities and also the third sector of feeding and supporting the vulnerable displays little evidence of sustainability. The nation's Covid19 operation involved making sure everyone had the basics while isolating – the homeless were housed and the hungry were fed. Footballer Marcus Rashford even were able to force a u-turn on feeding hungry children within the summer.

The first step toward the food drive however continues to be donations and supermarket surplus. Any system that creates a lot surplus isn't sustainable, either environmentally or financially. The huge growth in food banks will create a dependency culture which will collapse when the profiteers need to keep costs down – and even whether it might be sustained, is this the planet we want to reside in? Feeding the poor with crumbs from the top table?

Wealth building

It's an ill wind that blows no good and Covid19 has provided new economics the woking platform it should result in the case for whole place wealth building. It was already happening to an extent with several regional community banks being formed to aid the sectors neglected through the high-street financiers and councils like North Ayrshire producing encompassing building wealth strategies using the Centre for Local Economic Strategies.

Well funded co-operative economies that pay a real living wage use more localised production methods for local markets, thereby tackling global warming and protecting local economies from global crises. The more wealth circulates within the locality, the less vulnerable workers are to exploitative global market practices. The neighborhood public and quasi-public sector would be best placed to protect and make public wealth by countering the mass sell-off of assets and services to corporations, especially post Covid. 

The Tories have barely acknowledged the new economy, apart from a short reference to Anchor Institutions within the NHS Plan. Yet this government have displayed the capacity for u-turns and have enacted the shameless annexation of aspects of Labour's defeated manifesto policies. Because the building wealth movement snowballs, they will be not able to ignore it for considerably longer.