Preston Model: 'miracle or myth' debate between councillors as city told it inspired New York

The Labour-run council agreed in its annual budget to create a £100,000 fund during 2021/22 to deliver as-yet-unspecified schemes as part of the “democratised” approach to local economics which it is credited with pioneering in the UK.

An officer dedicated to furthering community wealth building will also be funded at an annual cost of £50,000 this year and next.

The decision came just hours before the city hosted a virtual event billed as a post-pandemic reboot of the Preston Model, which was first developed nearly a decade ago. The concept aims to ensure that economic activity generates genuine value for residents by promoting local procurement spending, co-operative businesses and the so-called “real living wage”.

However, opposition parties claimed that there was no evidence to justify ongoing spending on the project, with one councillor describing it as “a myth” and a “waste of money”.

Both the Liberal Democrat and Conservative groups on the authority called for the cash to be diverted elsewhere during a meeting of the full council, where it was also agreed to establish a £500,000 Covid recovery and climate change fund - reallocated from an investment pot - and also introduce a permanent post focusing on city growth and affordable housing.

Council tax will increase by 1.99 percent from April and members also heard that the authority would have to identify £600,000 in savings by this time next year.

However, community wealth building was the focus of much the debate - and disagreement - about the direction the city should take.

Council leader Matthew Brown said that the budget proposals were about “acknowledging that we cannot go back to what we had before”.

“Some people might think that after this pandemic, it’s going to be business as usual. No, it isn't - and the sooner we get our head around that, the more we can respond to it.

“There will be businesses that were there [before] that simply won't be there when we reopen. There is going to be more poverty and deprivation, potentially, because of the economic effects of Covid.

“Crucially, we need to have more democracy in Preston’s economy - we can’t be at the whims of outside investors who’ll want to extract as much wealth from our community as possible,” Cllr Brown said.

He described community wealth building as a “revolution” which is “spreading” - and set out an aim for the city to see the creation of at least ten worker-owned businesses, of which four are already in operation.

The city leader also revealed that more than 50 employers in Preston are now paying the real living wage of £9.50 an hour, as encouraged by the Preston Model.

However, Liberal Democrat group leader John Potter told the meeting that the money being allocated to community wealth building could be better spent on tackling the climate crisis and making Preston a greener and healthier city - for which his group proposed an annual £85,000 budget for an action fund and climate change officer.

He said that of the many people he speaks to when out canvassing, “not one of them has ever even mentioned the Preston model”.

Cllr Potter told the Labour group: “You have to acknowledge that you might be in an echo chamber and not actually representative of the real world.

“Do you want cleaner air or community wealth building? I know, if I had to choose, which one I would pick.

“Our group has never been ideologically opposed to community wealth building, but we have repeatedly asked [you] to show evidence that it’s working - none of which has come forward.

“You take credit for a lot of good things that happen in the city, but have never proven that those successes are anything to do with community wealth building.”

The Conservative group also rounded on the Preston Model in their alternative budget.

Cllr Ron Woollam said that £130,000 had already previously been spent on community wealth building and demanded: “Where does it end? This obsession with the Preston Model goes on and on.”

He echoed the Lib Dem call for proof that the concept was “benefiting the people of Preston” - and said that the officer post being created was “further spin on the community wealth building myth”.

“It's a socialist policy [which], at its best, is doomed to failure and a waste of taxpayers’ money.”

Cllr Woollam called for the latest £100,000 community wealth building investment to be put into a climate change fund to help Preston “exploit the opportunities” offered by the green industries of the future.

“It is vital that this council understands the skills gap that will emerge within the low-carbon sector and the fantastic opportunities to upskill the local workforce.

“We will need new jobs to replace those that have been sadly lost [as a result of the pandemic],” Cllr Woollam said.

Cabinet member for finance Martyn Rawlinson said that the authority would be “ploughing on” with community wealth building.

“We know it works and have presented lots of evidence on that in the past - the opposition just choose to ignore it,” he said.

Earlier, Cllr Brown had cited the creation of 90 jobs at a city company last year when the NHS sourced masks from it after the pandemic struck.

“For those 90 people who have got a job...these policies matter,” he added.

‘NEW YORK IS LEARNING FROM PRESTON’

At the “Community Wealth Building 2.0” event, hosted virtually by the city council on Thursday evening, Labour's former shadow chancellor John McDonnell said that Preston would have had a profound effect on government policy if the party had won either of the two elections it fought under Jeremy Corbyn.

“On the basis of Matthew Brown’s advice, we would have put together a community wealth building team nationally - purely and simply to spread ideas out.

“Cast your mind back to what [Preston City Council] was facing ten years ago - the first years of austerity and a government that was putting more responsibilities onto the council, but less resources, and then pushing councils to [outsource] their services.

“You had large corporations coming along and thinking: 'This is a wonderful area for us to make profits and the way we [do that] is cut wages and undermine working conditions'.

“Matthew comes along with this very simple proposal and says: 'Why don’t we simply use the money that we’ve got to employ people locally and invest locally - and why don't we all come together to do that?'

“And that lit a spark - and it started to transform your old local economy,” Mr. McDonnell said.

The remote gathering also heard from the deputy mayor of New York City, where community wealth building has been taken up.

Phil Thompson said that Preston had been “inspiring” to the Big Apple in rejecting the notion that what you are paid is deemed to be what you are worth.

“New York is watching you,” he told the city, adding:

"Community wealth building is [about] tackling this problem of division, with some people always getting left behind.

"[In America], it used to be women and Black people - now it's 80-90 percent of the population getting left behind. We've got to be together if we are going to build an economy that works for everybody."