Building Community Wealth across the Pond

The broad appeal of the ‘Cleveland Model’ and of community wealth building in general is becoming evident in a growing number of communities around the country, and—increasingly—overseas as well. Foremost among the international efforts that draw upon Evergreen for inspiration is the new Community Wealth Building Initiative in Preston in the United Kingdom

Located in Lancashire in the North West of England, with a population of around 300,000, Preston has a history of fostering innovation. During the industrial revolution, Richard Arkwright invented the water frame, one of the technological breakthroughs that quickened cotton textile production and the proliferation of the “dark satanic mills” that accompanied nineteenth-century industrialization. Charles Dickens visited the city during a bitter and protracted strike by cotton workers in 1854; from this experience, he developed the northern industrial setting of Coketown for his novel Hard Times.

Impacted by several waves of deindustrialization—first the collapse of the cotton textile industry in the early twentieth century, later the decline of postwar engineering and electronics production—Preston exhibited many of the symptoms of unemployment and urban decay found in rustbelt cities. Although economic growth has recently returned to Preston, poverty and inequality persist. A yawning ten-year gap in life expectancy exists between the region’s most prosperous and impoverished areas.

Responding to these challenges, municipal officials from the governing Labour Party have sought new ways to create a more inclusive and democratic local economy. They have been able to draw upon long-standing regional traditions of cooperativism dating back to the 1844 founding of the modern cooperative movement in nearby Rochdale, by the Rochdale Society of Equitable Pioneers. In 2011, the City Council launched a cooperative development program, The Preston Community Wealth Building Initiative.

Preston is seeking to promote cooperative development through three interlinked initiatives: the Guild Co-operative Network, which brings together members of existing and prospective cooperatives to provide mutual support and advice; Simply Buyout, which aims to promote employee buyouts of existing enterprises, especially from owners wishing to exit their business; and the Community Wealth Building Initiative, which directly follows the Cleveland Model in aiming to increase local purchasing by anchor institutions to support the formation of local cooperative enterprises. Though there are also differences, the economic experiences of Preston and Cleveland contain many parallels.

Britain has seen growing inequality that is beginning to assume U.S. proportions. In terms of wealth, the 100 richest people in the country are worth about the same as the bottom 30 percent of the population combined. In the US, the top 400 own as much as the bottom 60 percent. The same factors that have been driving the search for economic alternatives in the United States caused Preston’s City Council to look across the pond for inspiration. As Labour Councillor Matthew Brown observes, “The Cleveland model of using the large swathes of wealth held in our placed-based institutions, many of which are democratically controlled, to build the community from the grassroots upwards and democratize capital, is as relevant here as it is in the US.”

City councilors were eager to transform Preston into a “cooperative city,” but needed some assurances—especially given fears that a Potemkin mutualism on the part of the Conservative-led Coalition government was being used to bring about the privatization of local services by the back door. Back in the 1980s, Lancashire County Council had joined other local authorities across the UK in establishing cooperative development agencies. The council helped establish several co-ops over the years, but few had remained operational.  To learn how to effectively support cooperative development, they invited Ted Howard, Executive Director of the Democracy Collaborative, to give a presentation on the Cleveland Model.

During his visit, Howard met with Preston City Council, Lancashire County Council, and top leadership from Lancashire’s anchor institutions to make the case that, by linking anchor institution procurement to cooperative development, Preston’s employee-owned businesses could thrive. Howard also spoke with other Preston community leaders to emphasize the importance of securing public support for the creation of successful, locally integrated cooperatives. UK communities seeking to learn how the Cleveland Model could be adapted for their communities may also be able to look to an Evergreen pilot, to be developed by the Welsh Ministry for Economy, Science and Transport.

Following Howard’s visit, Preston began work in earnest on the new Community Wealth Building Initiative. The City Council has been working with the Center for Local Economic Strategies (CLES), a leading economic development research organization in the UK, to complete a study on local anchor institution spending. CLES researchers found that of the £750 million in annual spend by six of the region’s anchors, only five percent occurred within Preston and only 39 percent within Lancashire County. A similar study in nearby Manchester, indicating that the city could increase its local spending to 70 percent of purchasing, encouraged Preston to explore how it could help its anchors increase procurement from locally owned businesses and worker cooperatives to 70 percent. Thus far, Preston and CLES have secured commitments from several anchor institutions for the adoption of community wealth building principles.

Despite being the birthplace of modern-day cooperativism (which has since grown to include a billion people worldwide), the UK’s co-op sector has remained relatively small. However, since the financial crisis, it has grown almost 20 percent. Communities are beginning to embrace the deep intuitive appeal of community wealth building approaches. As the cooperative sector continues to grow, undertakings like Preston’s Community Wealth Building Initiative show how UK cooperative development might be taken to scale. It is encouraging to see interest in the Cleveland Model spreading beyond our borders and beginning to develop an international reach and application.