In an era of growing income inequality and a globalized economy, the concept of community wealth building has emerged as a powerful tool to address these systemic challenges. Community wealth building focuses on empowering local economies, promoting economic justice, and building resilient communities from the ground up. By placing control and ownership of assets in the hands of residents and ensuring wealth generated within a community circulates within that community, this approach offers a transformative alternative to traditional economic models. In this blog post, we will explore the principles and benefits of community wealth building and highlight successful examples from around the world.
At its core, community wealth building seeks to challenge the prevailing narrative that economic growth and prosperity must come at the expense of social and environmental well-being. Instead, it recognizes that local communities hold the key to their own economic destiny. By fostering local ownership of businesses, land, and other assets, community wealth building shifts the balance of power and creates a more inclusive and democratic economy.
One of the fundamental principles of community wealth building is the promotion of cooperative ownership models. Cooperatives, whether they are worker-owned, consumer-owned, or multi-stakeholder, empower individuals to collectively own and control the enterprises that serve their communities. This democratic form of ownership ensures that decisions are made with the best interests of the community in mind, rather than being driven solely by profit motives. Cooperatives provide stable employment, equitable wealth distribution, and a sense of ownership and pride among their members.
Another key aspect of community wealth building is the localisation of procurement and investment. By prioritizing local businesses and suppliers, communities can retain wealth within their own economies and create a multiplier effect. This means that every pound spent locally has a greater impact, as it circulates through multiple businesses, creating jobs and supporting local services. Additionally, community investment funds can be established to finance local initiatives, infrastructure projects, and small businesses, ensuring that capital stays within the community and serves its long-term interests.
Community land trusts (CLTs) are another powerful tool in the community wealth building toolkit. CLTs acquire and hold land in trust for the benefit of the community, ensuring that it remains affordable and accessible for housing, agriculture, and other community needs. By preventing land speculation and promoting long-term community stewardship, CLTs address issues of affordability, gentrification, and displacement, creating stable and inclusive communities. In Frome Whatcombe Fields is a great example of this. The 34 acre stretch of beautiful countryside on the Western fringes of Frome was purchased by a group of shareholders who were keen to ensure that the community can continue to enjoy the space saving it from redevelopment.
Successful examples of community wealth building can be found worldwide. The town of Preston is often hailed as a pioneer in this approach. Through the "Preston Model," the local government has strategically redirected procurement spending and investment towards local businesses and cooperatives, resulting in increased job creation and community well-being. In Cleveland, Ohio, the Evergreen Cooperatives have established a network of worker-owned businesses that provide jobs and economic opportunities in low-income neighborhoods. These examples demonstrate the power of community wealth building in transforming local economies and improving the lives of residents.
The Preston Model: Transforming Local Economies through Community Wealth Building
The city of Preston, located in the northwest of England, has garnered international attention for its innovative approach to local economic development known as the "Preston Model." This pioneering initiative has become a blueprint for community wealth building, demonstrating how a shift in economic strategy can revitalize local economies and foster greater prosperity for all residents. In this blog post, we will delve deeper into the principles and outcomes of the Preston Model and explore its potential for replication in other communities. The seeds of the Preston Model were sown in the aftermath of the 2008 financial crisis when the city faced severe economic challenges. The local government, in partnership with grassroots organizations, trade unions, and other stakeholders, recognized the need to reshape the economic landscape and create a more inclusive and resilient economy. Their vision centered on redirecting procurement spending, investment, and support toward local businesses and cooperatives.
One of the key pillars of the Preston Model is community wealth building through procurement. The local government made a conscious decision to prioritize local suppliers and businesses when awarding contracts and procuring goods and services. By doing so, they ensured that a significant portion of the city's spending stayed within the local economy, creating a multiplier effect that generated additional jobs, income, and economic activity. This approach challenged the traditional model where large corporations from outside the region would often win contracts, resulting in wealth extraction and limited local benefits.
To support the growth of local businesses, the city council established the Preston Tracked Account (PTA). This account acts as a mechanism to track and measure the amount of money spent with local suppliers and businesses. The data collected helps inform decision-making and demonstrates the impact of local procurement on the local economy. By fostering collaboration between the public sector, anchor institutions, and businesses, the PTA has created a network of support and opportunities for local enterprises to thrive.
The Preston Model also emphasizes the development of worker-owned cooperatives and other alternative business models. By providing support and resources for the creation of cooperative enterprises, the initiative has enabled workers to have a stake in the businesses they work for and share in the profits. This not only creates more equitable wealth distribution but also fosters a sense of ownership, pride, and commitment among workers, leading to higher job satisfaction and stronger local communities.
Furthermore, the Preston Model recognizes the importance of local anchor institutions in driving economic change. Anchor institutions, such as hospitals, universities, and housing associations, have significant purchasing power and influence within the community. By collaborating with these institutions, the Preston Model has encouraged them to align their procurement strategies with the goals of community wealth building, ensuring that their purchasing decisions support local businesses and social enterprises.
The impact of the Preston Model has been substantial. Since its inception, millions of pounds have been reinvested in the local economy, creating new jobs and stimulating economic growth. The initiative has also helped build a stronger and more resilient local business ecosystem, with a focus on sectors such as renewable energy, social care, and creative industries. In addition, the Preston Model has increased community engagement and participation, giving residents a voice in shaping their local economy and fostering a sense of ownership and empowerment.
The success of the Preston Model has sparked interest and inspired similar initiatives in other parts of the UK and around the world. Its principles of community wealth building and local economic empowerment are applicable in various contexts, regardless of size or geographic location. By harnessing the power of procurement, fostering cooperative ownership, and leveraging anchor institutions, communities can take control of their economic destiny and build a more inclusive and resilient future.
The Preston Model serves as a shining example of how a shift in economic thinking and collaboration among stakeholders can transform local economies and improve the lives of residents. As we face the challenges of economic inequality, environmental sustainability, and
The benefits of community wealth building extend far beyond economic considerations. By empowering local communities, it fosters a sense of belonging, resilience, and social cohesion. It reduces dependency on external forces and allows communities to shape their own destiny. Moreover, community wealth building promotes environmental sustainability by encouraging localized production, reducing carbon footprints, and supporting regenerative practices.
As we face unprecedented challenges, such as climate change, inequality, and the erosion of democratic values, community wealth building offers a compelling vision for a more just and sustainable future. By embracing this approach, we can create economies that work for everyone, where prosperity is shared, and power is decentralized. Together, let's champion community wealth building as a transformative force that empowers local economies, builds resilient communities, and creates a better world for all.