A progressive procurement policy for keeping institutional budgets within the local area as a means of generating social and environmental benefit from money that was already being spent
Context
Climate change is the result of economic structures that encourage extractive, unjust, and unaccountable practices in pursuit of growth and profit. It is impossible to address the challenges of climate change within the confines of the economic system that caused it. At the same time, as economic activity is increasingly centralised both nationally and internationally, excluded and marginalised communities in the hinterlands of capital accumulation are caught in a system that has no intention of sharing its wealth with them. The tools with which central governments approach both climate change and regional inequality are distant, distancing, and insufficient. Crucially, however, local governments are uniquely positioned to make tangible changes at a local and regional level, and in so doing make connections between the wider phenomena of climate breakdown and changes that can be made in people’s everyday lives and surrounding infrastructures.
Practice
In 2011, the UK Labour Party took control of the council in Preston, a small city in the North-West of England. Systemic issues related to deindustrialisation, the financial crash of 2008, and austerity policies introduced by the subsequent Conservative government depleted the town of jobs, investment, and funding. With low tax receipts, unable to attract private investment, and with its own budget slashed, the new council abandoned a policy to invest and grow, and instead embraced the economic strategy of “community wealth building”.
“Traditional city growth models, based on attracting inward investment for big infrastructure projects, could no longer be relied upon. Nor, under conditions of recession and austerity, could conventional tax-and-spend redistribution.”
Preston’s new community wealth building strategy was based on a model in Cleveland (USA), where worker-owned cooperatives established to provide goods and services to a network of anchor institutions such as the local hospital, schools, police service, and the council itself. Supported by the Manchester-based charity Centre for Local Economic Strategies, Preston council identified such a network and asked its members to redirect spending towards a database of existing local businesses, with the aim of keeping money in the local economy. Contracts were deliberately designed to be more accessible to small businesses, and policies incentivised local spending. The council further developed the capacity of local businesses and supported the development of new cooperatives.
Community wealth building is about creating an inclusive economy from the ground up, not waiting for the false promise of economic trickle-down. A further element of the strategy, “progressive procurement”, asked anchor institutions to consider social value alongside other criteria in awarding contracts, thereby encouraging bidders to pay a living wage, provide training, and support communities. By connecting elements of the supply chain, local procurement bolstered mutual benefit and increased accountability, rather than driving competition.
“If there is anything we are trying to protect ourselves against, it’s shareholders […] who live hundreds, thousands of miles away and just extract value from our community.”
With hundreds of local authorities in the UK declaring a state of climate emergency in the years since the Preston model was first implemented, community wealth building offers a path for moving away from extractive economic structures by harnessing local reinvestment as the central strategy behind delivering both immediate local benefit in creating of stable well-paid jobs, and pathways to more climate-resilient future, including more democratic and resilient local energy systems. Community wealth building is a transitional programme towards a complete restructuring of the economy. Its bold and experimental implementation in the Preston Model has given a tangible example of the link between wider economic structures, quality of life in particular places, and the effect that economic activity has on climate more broadly. It is not a blueprint for a green transition, but in “progressive procurement” it offers a strategy and a tested example displaying the agency of local government actors thinking strategically and ambitiously and working with the tools they have.