This article appears in the latest print issue of Tribune
Councillor Matthew Brown is Leader of Preston City Council and Senior Fellow for Community Wealth Building with The Democracy Collaborative. Councillor Asima Shaikh is the Cabinet Member for Inclusive Economy and Jobs on Islington Council.
As we face into a general election, Labour is clear about its historic mission for Britain. The coming months will see us build on our 2017 manifesto and its bold commitment to change. Our party in 2019 aims to break with neoliberalism and build new economic models that can facilitate the development of a truly democratic society.
But this does not have to be something we wait for. Where Labour is already in power we are taking steps towards that goal. Questions about ownership and control of our local economies are being addressed by a new wave of municipal socialism emerging in many parts of the country. The responses are principled and pragmatic, the values are universal but applied creatively in different contexts.
Our Labour councils of Preston and Islington are two key examples. As a small city in the north of England, Preston has witnessed decades of deindustrialisation and disinvestment. Islington in central London, on the other hand, has no problem attracting inward investment. But wealth extraction, driven by rapacious developer-led growth and the financialisation of the property market, has contributed to deep and persistent inequalities, social exclusion and poverty. Both areas are challenging these systemic failures by applying principles of Community Wealth Building and economic democracy.
Central to this is our commitment to insource services and encourage new forms of municipal ownership. Islington has seen one of the biggest insourcing efforts in the UK. Its Labour Council has brought £380 million worth of services back in house, including housing management and repairs, refuse collection, street cleaning, grounds maintenance, education management, concierge services, cleaning and temporary accommodation. This has helped 1,200 frontline staff receive the London Living Wage and improved terms and conditions, alongside resident satisfaction. The insourcing policy was a political choice made after Islington Council launched the UK’s first Fairness Commission in 2010.
Preston as a smaller northern authority retains the vast majority of its services in-house and recently brought the operation of two cafes in its buildings into local authority control with the recruitment of new staff. As part of its “anchor strategy” Preston works across its local public sector, including with Labour’s Police and Crime Commissioner Clive Grunshaw who recently brought custody suites back into the Lancashire Constabulary from outsourcing giant G4S. Preston City Council is also committed to a multimillion pound cinema and restaurant development in municipal ownership expected to yield a significant return for residents in the long-term.
In addition to insourcing and municipal ownership, both Labour authorities are advancing wider community wealth building strategies. Islington Affordable Workspace Strategy harnesses its powers as a planning authority to secure commercial spaces at peppercorn rent. The new workspaces are managed by providers drawn from the co-operative, social enterprise and charity sectors. Social value is embedded in contracts, with space given to providers for free in return for creating long-term benefits for local people and businesses.
Islington Council has also purchased commercial leases, with the first workspace contract awarded to an expanding digital worker cooperative Outlandish, which will be based in the borough. The municipal energy company Angelic Energy has begun operations, with Jeremy Corbyn one of its first customers. Islington is also challenging the developer-led approach to economic regeneration by requiring 50 per cent affordable housing on new developments. Its council was even forced to defend this in the courts when viability assessments were used to avoid social housing commitments.
Preston, meanwhile, is leading the charge to establish a fully-licensed north west community bank, which is projected to lend £400 million to local businesses and individuals as a viable alternative to the corporate banking sector. The public pension fund it belongs to is investing up to £100 million in its local economy as well as Preston City Council itself, and is seeking to build on this with a Lancashire Wealth Fund to combine pension monies with other public and private sector investments to create a more democratic, locally-controlled pool of wealth.
Preston’s work with its anchor institutions has seen an additional £75 million spent with Preston-based enterprises by the local public sector and is calculated to have added an additional 1,600 jobs in one year. Now we are aiming to become one of the first Living Wage Cities, with over 50 Living Wage employers in the borough. We’re also working with the University of Central Lancashire (UCLan) and Spain’s Mondragon Cooperative Corporation to establish 10 new worker cooperatives in the next two years.
Community Wealth Building as a broad-based economic development strategy is now being implemented in dozens of Labour areas, including the Welsh Assembly, North of Tyne, Liverpool City Region, North Ayrshire, Sunderland, Birmingham, Wirral, Salford, Brighton and a growing number of London Councils. Its supporters include Welsh First Minister Mark Drakeford, Jamie Driscoll, Steve Rotherham, Rokhshana Fiaz, Phil Granville, Joe Cullinane, Nancy Platts and other notable figures in local and regional government.
This transformation is supported by Labour’s Community Wealth Building Unit, which operates from the Leader of the Opposition’s Office, where unions including Unite and Unison, as well as the Cooperative Party and think-tanks CLES, APSE and the Democracy Collaborative develop strategies that can reverse the damage inflicted by financialised capitalism on our communities. The unit recently launched a widely-welcomed report Democratising Local Public Services that confirmed a Labour government’s default position will be to bring services back into local authority control.
More powerfully, the deepening of international relationships between Labour areas and the cooperative economies of Mondragon and Emilia Romagna, Barcelona, as well as progressive American cities including New York and Cleveland. In New York, Deputy Mayor J. Phillip Thompson is advocating a proportion of the annual $12 billion health sector procurement budget is used to build democratic companies, including union-supported worker cooperatives. At a political level Bernie Sanders is supporting John McDonnell’s Inclusive Ownership Fund as part of his bid to secure the Democratic Presidential Nomination.
We must not forget the devastating austerity and disinvestment caused by the global economic crash of 2007/8 and subsequent bailout. The fallout from that crisis has created new opportunities to build a grassroots socialism both here and overseas. Labour in local government has been at the forefront of challenging discredited neoliberal policies and is helping to shape a paradigm for a new economics. Our experiments in Islington and Preston are built out of necessity and principle, and will be accelerated when Labour goes into government. Together we can seize this moment, not just to defeat the Tories politically but to defeat the economic ideology they have imposed on this country for far too long.