Community Wealth Building in Newham

(2018 – ongoing)

CLES is working with the London Borough of Newham to advance community wealth building practice to address persistent poverty and entrenched inequality. Newham has embedded community wealth building within its organisational structure and is now taking steps to democratise its economy and embark on a municipal housebuilding programme that generates social value and affordable homes for the borough’s residents.

Context

  • Newham has one of the highest rates of poverty and income inequality of all London boroughs; thechild poverty rate is 52%. BAME communities, which make up 73 per cent of its population, are disproportionately affected.
  • Inward investment, combined with the general increase in London’s property prices, has exacerbated inequality. Local residents are forced to pay ever-increasing proportions of their pay to keep a roof over their head, whilst wealth is extracted by large property developers. Newham has experienced a 4% increase in rent rates compared with wage growth of 9.5%, since 2011. This is market failure at the most basic level.
  • Rokhsana Fiaz was elected as Mayor of Newham in 2018. This presented a fork in the road for Newham’s residents – an opportunity to secure a future rooted in social, economic and environmental justice and an end to the use of Newham as a playground for private developers.

Community wealth building in Newham

Dedicated Director of Community Wealth Building

Newham is the first local authority in the UK to create a dedicated role for a Director of Community Wealth Building. The Director sits on the senior leadership team and oversees the progressive implementation of its policy framework. This places Newham in a unique position moving forward. With community wealth building principles deeply rooted in its corporate structure, it has the potential to become the most forward-thinking municipality in this field.

Community wealth building strategy

Newham launched its Community Wealth Building Strategy in January 2020. This pioneering and bold inclusive economic approach aims to address poverty in the borough and to ensure that investment coming into Newham benefits all residents. It will tackle economic social and environmental injustice “with an unrelenting focus on poverty in the borough, as well as addressing racial and gendered disparities that exist”.

COVID-19 recovery strategy, Towards a Better Newham

In July 2020, it became the only local authority in London to use health, wellbeing and happiness as the measure of its economic success. This reflects the council’s commitment to community wealth building, inclusive growth and tackling the climate emergency to deliver quality jobs, equality and fairness for Newham residents, alongside sustainability.

Municipally owned property and redevelopment company

Newham is a major landowner. This means it can act as a steward of economic, social and environmental justice, rather than simply being a market player. The council has invested £78m in Populo Living to build genuinely affordable housing across the borough. 50% of all property will be let at social rents on long-term tenancies. As Newham is the sole shareholder of Populo Living, all profits stay in the borough, rather than going to investors and leaking out of the local economy. This will fund further housebuilding in Newham.

Deepening participatory democracy

Newham is committed to deepening democracy to ensure that more of its residents have a stake in the economic development story of their locality. To date, activities have included establishing a council-led commission on participatory democracy, including a commitment to the idea of participatory budgeting.

Issues such as poverty, financial isolation and inequality have a disproportionate impact on Newham’s black and minority ethnic populations – for instance, the employment rate for BAME groups is between 65% and 80% of that of white British residents. Disparities in life chances and quality of life have also been brought into sharp focus by Covid-19. The borough’s Covid-19 Recovery Strategy therefore focusses upon improving the quality of life and wellbeing of all sections of the community, but particularly targets support towards the most disadvantaged.

The council aims to make Newham the best place in London for young people to grow up. However, it is widely expected that young people (particularly those from low income households) will be hardest hit by the present economic contraction. The council’s Recovery Strategy seeks to enhance the support available to young people through a new Youth Empowerment Fund, which will support them to overcome barriers to economic participation and training. The council will also work closely with education and training providers to ensure that the borough’s young people are provided with the best possible vocational support.

Newham is also applying CLES’s community wealth building principles as a key mechanism for responding to the climate emergency, for instance, by ensuring new homes built on council-owned land are equipped to the highest energy efficiency standards to minimise fuel poverty and carbon emissions.