Community wealth-building – what’s the secret sauce?

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Community wealth-building – what’s the secret sauce?

Social Value Portal’s Head of Data & Analytics Nathan Goode explores community wealth-building through the ‘Preston Model’, and reviews the new book Paint Your Town Red, and how it can be used to create your own social value blueprint.

The Preston Model

Over the past couple of years, the idea of community wealth-building, and in particular the ‘Preston Model’, has increasingly gained traction as a locally-led regeneration solution. It’s about directing economic investment and resources in a way that genuinely benefits people and communities. But there has been little published about it and there is limited general knowledge of what the model really entails. In meetings, a discussion about the Preston community wealth-building model might start and then fizzle out; everyone would agree it sounded like a great idea, but they don’t know enough to translate the model from a Preston context.

So I was excited to open my copy of ‘Paint Your Town Red: How Preston took back control and your town can too’, co-authored by Matthew Brown, one of the architects of the Preston Model, and Rhian E Jones, a freelance writer with an eclectic and thought-provoking range of other titles to her name.

Finally – a book that was going to reveal the ‘secret sauce’ of community wealth-building.

Anyone looking for a blow by blow (or street by street) account, packed with facts and figures is going to be disappointed. The book isn’t even mostly about Preston – a mere 28 out of the 160-odd pages cover the Preston Model itself. But I’m fine with that – this is a book with a direction and a purpose.

What’s community wealth-building all about?

The first part talks about why we are having this discussion about community wealth-building – both the need for a Preston Model and the inspiration for the model itself. It chronicles the progressive dismantling of local economic and civic power over the past three decades and the failure of ‘top-down’ regeneration strategies.  The authors identify two main influences for the Preston Model (both outside of the UK):

  • The Basque conglomerate Mondragón, founded by a Catholic priest in 1956, in a small town of 7,000 people of the same name and now the 7th largest company in Spain; and
  • The Democracy Collaborative’s work to create evergreen cooperatives to service large non-profit ‘anchor’ institutions, such as the university and the hospital in Cleveland, Ohio (population 385,000).

Preston, in contrast, has a population of around 141,000 people. But this model is not about finding places with matching profiles or similar sizes. ‘Paint Your Town Red’ emphatically rejects the notion that for the model to be replicated, conditions need to be the same as in Preston – it is filled with all sorts of other interesting case studies of places that are wildly different from Preston, both demographically and geographically.

Community wealth-building, the authors argue, is ‘an adaptable and elastic model’ which will flex to local circumstances. Case studies provide the inspiration and the sense of empowerment. The Mondragón and Cleveland models were ‘lightbulb’ moments for the Preston Model’s architects, as was the Preston Model for numerous other subsequent forms of democratic localism across the UK.

What specifically do we learn about the Preston Model from the book?

We know that a moment of crisis – the collapse of a conventional private sector-led mega-shopping centre project – provided the trigger for action. Seemingly abandoned by the mainstream investment community, Preston’s council decided to see what it could do by just focusing on local resources. The council started by getting a number of local institutions to collaborate on ‘progressive procurement’ – finding ways to keep a progressively larger proportion of the amount that these institutions spent in the local economy.

Here, the numbers get interesting. In 2013, the six founding ‘anchor’ institutions were spending a total of £38 million in Preston and £292 million in Lancashire as a whole. By 2017, this had risen to £111 million and £486 million respectively. Their collective local spend for Preston had increased by a factor of three and for Lancashire had risen by two thirds.  Naturally, this has significantly benefited local companies and their supply chains, and strengthened the local economy, by building resilience and laying the foundations on which social value strategies can be built. The first stage of the model can be characterised as getting the basics sorted: essentially, more money in the local economy gives the vision a solid foundation on which to build.

Other components of the Preston Model include:

  • Insourcing – one of the anchor institutions, social housing provider Community Gateway Association, brought its repairs and maintenance service in-house
  • Living Wage – another anchor, University of Central Lancashire, is looking to become a Living Wage Employer
  • Local Investment – Preston Council is investing its own assets to support the local economy, the latest project being a £40 million cinema project
  • Cooperatives – support for democratic models of business ownership, supported by the Preston Cooperative Development Network, covering a range of sectors including educational psychology, digital & IT, taxis and catering

An intriguing element is the Council’s support for a citywide credit union, CLEVR Money, which is now evolving into plans for a fully-fledged, regional community bank. It will be interesting to see how this develops. As well as assisting with the localisation of investment, the book points to the continuing abandonment of the high street by the established banking sector.

It’s one thing to identify a need, and quite another to establish a successful business model in a highly regulated sector; as the experiences of local authorities and housing associations with energy companies have brutally shown.

What else is addressed?

A good half of the book is dedicated to other case studies and ‘how tos’ for different components. This includes the beginnings of a discussion on different forms of democratising use and ownership of property assets, including affordable housing, community land trusts and community asset transfers. As the authors rightly point out, land ownership in the UK is woven into the fabric of our society, and by extension drives many of its systemic inequalities. Land inequalities are not so much the elephant in the room, but rather a herd of dinosaurs.

What all of this adds up to is not a rigid, replicable model, but a series of components that can be selected and assembled according to local need. The authors talk about ‘universal localism’ and argue that the approach is no more than “extreme common sense”.

Really what we have in the Preston Model is a list of ingredients, so you can make your own secret sauce.

Published 8 July 2021

Nathan Goode is Head of Data & Analytics at Social Value Portal.

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