Community is economic energy – we must use it
This article originally appeared in the LGC
Post-Covid-19, local authorities must guard against merely following the economic development path taken after the global financial crisis. Then, as now, the bounceback was predicated on a stimulus programme in which national government sought a return to growth via its willingness to part investment in “shovel ready” hard infrastructure and regeneration projects. But whilst these shovel ready projects offer construction jobs over the very short term, over the longer term, jobs are dependent on subsequent investment.
Therein lies the rub: in a highly-probable global recession investment will be sluggish at best. With many of these projects predicated on commercial office or retail development, securing additional funds will be challenging, especially given ongoing social distancing measures, changing consumer behaviour and the normalisation of home working.
Therefore, whilst we must advance hard infrastructure and regeneration projects and make sure we make the most of their potential, we need to deepen and broaden our approach to recovery and reform.
Emerging in the 2010s, community wealth building is a model of local economic development which tackles head on the challenges of building a long lasting and resilient economy. The approach is predicated on harnessing the power of local communities, with local agencies and institutions, to support local economies. As opposed to wealth being extracted by distant shareholders and owners (as is often the case with hard infrastructure investment), community wealth building aims to retain as much wealth as possible in the economy – making it stick.
The “relational economy” has stepped in where the private and commercial “transactional economy” and market have fallen short
At its core is a focus on locally productive forms of business. These “generative” businesses, such as employee owned firms, community business and social enterprise are firms in which wealth is both created and shared broadly between owners, workers and consumers, ultimately increasing local multipliers as wealth flows through to people and places.
Community wealth building counteracts an economic development approach that assumes that once investment capital has been secured, wealth, jobs and opportunity will trickle down for all to share. Across the country we are seeing a hunger for this kind of deep-rooted economic change.
Alongside the damage to livelihoods and local economies, the pandemic has also prompted a surge in citizen action, with millions of acts of kindness, neighbourliness and social solidarity. This “relational economy” has stepped in where the private and commercial “transactional economy” and market have fallen short.
In some places this mobilisation of citizens has prompted the beginning of a new relationship with local government and the economy, where an emboldened citizen activism is starting to deliver more. The opportunity now is for this energy to drive a wider, post-pandemic mobilisation of citizen power – one focused on growing the economic stake of workers, consumers and citizens, within the market and, with it, building community wealth.
Recovery to reform: rebuilding for a new local economy
In our forthcoming guide – Recovery to reform: rebuilding for a new local economy – we will provide a practical guide for local authorities that want to rebuild their economies, post-Covid-19, to be fairer, more resilient and kinder to the planet. In it, we will call for the repurposing of existing business growth hubs and business support services to become new ‘community wealth hubs’. These would provide an eco-system of financial, technical and social support, in which community energy is harnessed into the growth of employee ownership and new community-owned businesses to deliver goods and services hitherto delivered by extractive players in the private sector.
In the coming weeks and months we will live through deep economic and social hardship. We cannot rely on traditional hard infrastructure and physical regeneration solutions. We must not just recover to some lesser semblance of the old, but truly reform the economy.
This public health crisis has seen an amazing response from communities, with energy and imagination that comes from solidarity, empathy and a genuine belief in the power of working together. With the main economic crisis to come, let’s again encourage that community energy, to build community wealth and an economy that we all have a genuine stake in.