Wealth Retention and Democratic

Localism –Municipal Socialism for the

21st C
‘Across the world, there is a growing awareness
of the need for a new kind of economy.’
• Community wealth-building: building on established co-operative principles and initiatives which
focus on the local and the municipal.
• Local sites of decision-making power or pressure exist:
• Co-operatives.
• Trade unions.
• Campaign groups.
• Faith groups.
• Mutual aid networks.
• Community banks.
• Political parties.
 From the ‘Case for Community Wealth-
Building’ (2020)
• ‘Community wealth building is a local economic development strategy focused on building
collaborative, inclusive, sustainable, and democratically controlled local economies.’

• Moves away from – tax incentives, outsourcing and public-private partnerships which subsidise
profit extraction by footloose global corporations with no loyalty to local communities.

• Moves towards – democratic collective ownership (co-operatives, land trusts, community

financial institutions), ‘anchor institution’ procurement strategies, municipal/local enterprises and
public/community banking.
Good Examples are Everywhere!
• There is no blueprint for democratic wealth-retention. But when the principles are adapted to
local circumstances, the results are the same from Mondragon, Cleveland and Preston to Tyne
Tees and North Ayrshire. Improved services, more job opportunities, sustainable supply-chains,
less poverty, rights at work and success at the ballot box!
• The foundational principles – self-government, democratic control of work, mutual aid and
community-owned utilities – stretch from the Paris Commune of 1871 to the 2019 conversion
from arms manufacture to sustainable and socially useful products at Belfast’s Harland and Wolff
shipyard.
 Solving Problems from Below Without
Permission from Above
• The five key ‘pillars’ of community wealth-building (Centre for Local Economic Strategies
(CLES).
• Plural ownership of the economy
• Making financial power work for local places
• Fair employment and just labour markets
• Progressive procurement of goods and service
• Socially productive use of land and property
In 2020, the Scottish government announced their intention
to work with CLES to develop a country-wide programme
of community wealth-building.
Where are we in Scotland with those efforts?
Really ‘taking back control’
• The political benefits of encouraging a progressive re-imagining of what ‘taking back control’
might look like are obvious.
• ‘Imagine if every Labour city were setting up its own banks, supporting worker-owned businesses
and credit unions? Imagine it. That would be our way of taking back control.’ (Matthew Brown,
Labour Leader, Preston City Council).
• ‘Paint Your Town Red’ seminar: https://www.youtube.com/watch?v=cQVACa-1DAw&t=3284s
Really ‘taking back control’
• ‘A more democratic economy might make unrealisable demands on the citizens who will be its
participants…one should not overestimate what would be required – not endless participation…by
all of the people all of the time, but only participation by some of the people, some of the
time….neither should one underestimate the capacities of one’s fellow citizens. When have people
have real power to affect matters…central to their lives as economic agents, it would be entirely
reasonable to expect a level of engagement much higher than what one would expect in contexts
where people are powerless.’ (Guinan and O’Neil).
The Preston Model
• Preston’s problems (sound familiar?):
• De-industrialisation
• Austerity
• Council funding cuts
• ‘Regeneration’, but no structural change
• Prioritising of market forces to solve local problems
• Planning led by property developers and council officials
• Fractured communities losing faith in political solutions

• How will community wealth building tackle poverty in North Ayrshire? Live Q & A with Joe Cullinane:
https://www.youtube.com/watch?v=Crk-nLcL7Sg
So What Did Preston Do? Community
Wealth-Building!
• Recognised Preston’s problems as the consequence of wider systemic economic problems which
went further than the local.
• Move to respond to austerity in a way that was not dependent on inward investment and which
focused on local democracy.
• ‘progressive procurement,’ but much, much more…
• Community banking, local investment of public pension funds, encouragement of worker-owned
co-operatives. In other words, a ‘whole-system approach.’
• But change cannot be driven, or consolidated, from the top. Labour Cllrs reached out to a range
of local, regional and national partners.
• Anchor institutions came next…time to stop chasing inward investment from multinationals. Stop
wealth leaking out the community.
Anchor Institutions – localising our supply
lines
Results can be Impressive
• ‘The Preston Model encourages procurement projects via regional contractors who are far less
likely to engage in such practices (90 or even 120 day payments). This creates far greater stability
amongst the local supply chain, providing the confidence to recruit more employees and invest in
the future…As we have grown, so have the companies who are long-term members of our supply
chain. I have witnessed these companies increase their workforces and remain economically
viable whereas many others have sadly withered and failed during the same period….’ (Michael
Conlon, Chair of Conlon Construction).
• Where other local authorities privatised and outsourced, Preston made an effort to nourish and
grow its own businesses.
Case study: North Ayrshire – the Real ‘Big
Society’
• Challenges: ex-industrial communities, low pay, insecure work, gentrification caused by tourist-
driven housing booms and wealth flight out the area.
• Labour Leader of the Council Joe Cullinane describes hearing about the Preston model as ‘a
lightbulb moment.’
• Solutions: management of land and assets by the community, not private developers.
• Moving away from rhetoric and towards ‘embedding community in community wealth building’
through working with grassroots groups and encouraging democratic participation.
• An ‘Anchor Charter’ - incorporating the ‘five pillars’ (see slide 5). Where larger institutions are
thinner on the ground, local hospitals, football clubs and their supporters’ trusts are just two
alternatives.
Councils Wanting to Implement Progressive
Procurement Can Consider these Key Changes:
• Develop Accessible/Streamlined Ways for Local Suppliers to Hear about Bidding Opportunities
and to Submit Bids
• Embed Ethical and Social Clauses in Contracts
• Increase Local Investment
Useful References
• CLES: https://cles.org.uk/
• Alternative Models of Ownership Report (Labour Party, 2017):https://labour.org.uk/wp-
content/uploads/2017/10/Alternative-Models-of-Ownership.pdf
• The Cleveland model - Building Community Wealth: https://community-
wealth.org/content/cleveland-model-how-evergreen-cooperatives-are-building-community-
wealth
• Co-operatives UK: https://www.uk.coop/
• Insourcing:
https://www.apse.org.uk/apse/index.cfm/research/current-research-programme/rebuilding-capa
city-the-case-for-insourcing-contracts/
• Fearless Cities: https://www.fearlesscities.com/
• The Foundational Economy: https://foundationaleconomy.com/