Own the future: a guide for new local economies
Build back better. It’s a powerful phrase, but as post-Covid-19 economic policies begin to emerge, those three words are starting to ring hollow.
Based on what we have seen so far, there is little reason to think that what will transpire over the coming months and years will build back anything other than a worse economy than the one we had before. We will continue along a path that delivers on GDP but leaves a stain of rising in-work poverty, that creates a gulf between property owners and renters and that is accelerating rapidly towards ecological disaster.
However, an alternative exists. Emerging in the 2010s, community wealth building is a people-centred approach to local economic development that CLES and others have advanced in the UK and internationally over the last 10 years. Drawing on this body of work, CLES is today publishing “Own the future: a guide for new local economies” – a practical guide for how mainstream local economic development can and must be reimagined for the post-Covid-19 world.
“Once again officers are being asked to dust off their lists of “shovel ready” projects”
Last week’s announcements of accelerated infrastructure spending were wearingly predictable to anyone familiar with mainstream economic development in England of the last decade. Once again officers are being asked to dust off their lists of “shovel ready” projects, to compete against each other to demonstrate that their scheme will have a transformational impact on GVA, job growth and property values. To play this game all parties have to suspend what many know to be true and buy into the outdated notion that once investment capital has been secured, wealth, jobs and opportunity will trickle down for all to share. The reality is that over the last decade this approach has done nothing of the sort. In the face of unprecedented economic challenge, we urgently need to reset local economic development and equip it to build a new economy: one which functions to create human and environmental wellbeing.
“Community wealth building aims to retain as much wealth as possible in the economy – making it stick”
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 uses the combined power of communities, businesses and institutions to advance higher proportions of spending and investment in our economies, so that it benefits local people and organisations. 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. At its core is a focus on forms of business which are locally owned and create a multiplier effect of benefits for local people, employees and communities. These “generative” businesses include SMEs, employee owned firms, community businesses and social enterprises – organisations who generate wealth that is retained in the community, rather than being extracted out to distant shareholders.
“Now is clearly the moment to seriously mobilise”
The community wealth building movement is growing and, with Scotland recently becoming the first national government to adopt the approach, now is clearly the moment to seriously mobilise a decade of community wealth building work by local government, citizens, businesses and a host of anchor institutions. In “Own the future” we describe the practical mechanisms for this mobilisation to take place. We set out two roles for local authorities which, taken together, constitute a powerful model for progressive local economic development:
- The analyst – developing and maintaining a deep understanding of the underlying state of local economies and the impacts of the Covid-19 pandemic.
- The anchor and agent of change – acting as an economic anchor for their place and using that power to push forward post-Covid-19 economic recovery and reform.
In the guide we provide practitioners with comprehensive actions to advance these roles under five themes (building the generative economy, finance, land and property, spending and workforce) before providing worked examples in key sectors for how to bring together these tactics and levers.
In setting out these actions, we recognise that they go against some of the prevailing winds of the policy and financial framework of the UK government. That is why, throughout the guide, we supplement our practical prescriptions for action with information on the national policy changes which are needed to truly realise reform.
“This is the approach we must take”
We are under no illusion that the proposals set out in this guide will be easy. They constitute a profound reimagining of ten years of mainstream economic development practice and run counter to the thrust of much UK national policy. But if we are to build an economy that works for communities, that works to address climate change and creates resilience where there is risk and precarity, then this is the approach we must take.