1. Tom Lloyd Goodwin Associate Director CLES
Local Wealth Building: How to develop locally controlled economies and put people first
Tom Lloyd Goodwin
Associate Director CLES

2. A bit about us We are a Think AND Do tank
Through our work we aim to achieve social justice, good local economies and effective public services for everyone everywhere.
Leading independent member and research organisation, realising progressive economics for people and place.
33 years old.
Our aim is to achieve social justice, good local economies and effective public services for everyone, everywhere.
We think but we do stuff on the ground, we collaborate work with groups to bring about progressive change.
Our mission is to build an economy that works for places and works for people

3. Context

4. Our current model of growth is failing…
Its failing because of the above:
In Manchester, where we’re based. Currently there are nearly 80 cranes on the city’s skyline, building 10,000 new flats and luxury office accommodation.
Huge homelessness crisis - 21 homeless people died in the city in 2017—that’s more than in any other local authority area in England and Wales.

5. Our current model of growth is failing…
Its failing because
Latest OECD data showed that the UK is the only developed economy in which wages fell while the economy was actually growing, albeit meagrely. The UK is an economy where one in eight workers live in poverty, and where 1.3 million people (including children) rely on food banks.

6. A new economics Rejection of neo-liberalism is growing
– the idea that an economy isn’t worth its salt if it doesn’t look after people
We know that a lot of wealth is extracted from local economies by large corps and oversees shareholders and paid out in dividends to shareholders.
Our mission is to think hold on a minute, how can we ensure that the wealth is keep within the confines of the local economy
Who owns wealth
How to create a broader ownership of wealth
Wealth produced locally is too readily extracted
Circular economy

7. The Solution?
NO!
From an inclusive growth perspective, inclusion is about what happens socially to growth after we have growth.
Whilst helpful, however, this aim is limited, and limiting, given the scale of the social issues and economic challenges facing our society.
Also its oxymoronic. You’re being exclusive not inclusive. What about areas that aren’t growing? What about sector that aren’t high growth sectors?

8. Inclusive Economy The Solution? Need a more holistic viewpoint.
An inclusive economy is an economy which is focussed on social goals, social justice, environmental sustainability and prosperity for all.
It contrasts to inclusive growth which aims to improve living standards and share the benefits of increased prosperity more evenly across social groups.

9. Inclusive Growth vs Inclusive Economy
Economic model is fine, but need to connect more people to growth
Economic model is flawed, as it creates unacceptable inequality. Should serve inclusive social goals.
Focus on supply side of Labour market –improve employment prospects
Focus on demand side, employers and type of work
Inclusion important because it supports growth
Inclusion important in its own right
Better distribution of future growth
Distribution of existing prosperity
Ownership forms of production which support economic growth
Widening ownership of economy
Marketisation and private values, can sit within and alongside public sector to advance inclusion
Restoration of public values within public sector market, is a route to greater inclusion
Balance toward exogenous sources of growth (external) as basis to inclusion
Balance toward endogenous sources of growth as basis to inclusion
Extraction of wealth seen as inevitable but need to slow for inclusion
Extracted wealth needs to be curbed and made more locally generative

10. Building an Inclusive
Economy

11. H Anchor institutions Housing providers Private Businesses
Local government H
Education providers
Anchor institutions are large established organisations, rooted in local communities, which can improve local economic and social wellbeing through the use of their spend, employment practices, and use of land and assets.
In terms of impact, anchor activity affects the social determinants of health: income, wealth, economic equality, job stability, sense of agency, assess to affordable safe housing.
Idea of anchors is focused on cultivating place-based assets and generating wealth that is retained within the local area, as opposed to being extracted as share-holder profit
Hospitals

12. The 5 elements of Local Wealth Building
Plural Ownership of the economy
Making financial power work for local places
Fair employment and just labour markets
Anchor purchasing
Socially productive use of land and property
1. At the heart of Local Wealth Building is the principle that wealth is broadly held.
About anchors interfering in the local economy and encouraging…
2. financial investments, pension funds directed towards local investment priorities, bringing transformative capital to locally rooted enterprises.
3. Inclusive recruitment practices - Recruiting from lower income areas, progression routes, commitment to living wage
4. Making best use of public pound getting wider social and local economic value from procurement and commissioning
5. Supporting equitable land development (through establishment of Community Land Trusts). Development of under utilised assets for community use

13. Local Wealth Building – in practice
We’ve been looking at LWB for the last 12 years (list above growing all the time).
All these places have different emphases of how do we make sure that wealth works for local people.
Some focus on procurement, some on workforce, some focus on small business, so on co-operative development.
All manner of different blends

14. Preston 2012- A 6 year journey…..

15. Preston’s Local Wealth Building: A new economic ecosystem
Anchor Institutions: Sticky Capital! Play a significant and role in a locality - Size & scale – Purchaser/procurer, employer with land, property and assets
Housing providers
Voluntary and community sector
Private Businesses
Local government
In Preston, wanted to think about not just City council spend but all of the anchors all public bodies in that place – hospitals, police, housing associations, colleges, universities.
Our first attempt to look at the totality of spending across a range of orgs not just local authorities. H
Hospitals
Education providers

16. The change: Preston and Lancashire County5%
£616m
of spend within the Preston City Council boundary
Total spend of all 6 anchors 12/13
39%
At start of journey…
of spend within the Lancashire economy

17. The change: Preston and Lancashire County
18%
£616m
£200M
of spend within the Preston City Council boundary
£70M
Total spend of all 6 anchors 16/17
80%
Did a lot of work around procurement and supply chains.
After 5 years… figurers now…
200 back to lancs
70 back to preston
Reckon this activity is work 1600 jobs to preston.
Index of dep. Preston was in bottom 20%, its now risen out of it
of spend within the Lancashire economy

18. Preston’s Local Wealth Building: A new economic ecosystem
Extractive wealth banished through a growing set of actions
Spend and actions of anchor organisations (5 years in)
Lancashire Bank (in development)
Use of local pension funds for local investment (in development)
Local food networks (established)
Platform cooperative (established)
Local cooperatives development to feed into supply chain(in development)
Local energy company(in development)
Preston not jus interested in local spend.
Also interested in local bank – to encourage more local investment in small businesses.
Local pension funds and how they can get more of this invested locally. 20 mill identified for local investment.
Local co-op food network – just got property and about open – hope to provide food to range of anchors in the area
Also thinking about local energy supply – municipally owned.
All this part of new economic thinking – new eco system to make sure that wealth not extracted and not taken away and is brought back home to Preston for social an community benefits.

19. Our current work

20. The list is growing!
Moving beyond spend is the key – driving social value
Start with LWB diagnostic – what’s happening across the 4 principles
Not necessarily

21. Broadening the ownership of wealth

22. Inclusive Commissioning and Market Making

23. Get in touch 0161 236 7036 tomlloydgoodwin@cles.org.uk @CLESthinkdo