The Road to Municipal Socialism – the Present and Future of the Preston Model

Matthew Brown first spoke to Martin O’Neill for Renewal in the 2016, for a piece entitled “The Road to Socialism is the A59: the Preston Model”, which outlined the new approach to local economic policy being developed in Preston. Now, over 7 years on, Matthew and Martin catch up for a discussion of the progress that has been made, and where the Preston Model can go from here.

Martin O’Neill:    Many thanks for joining me for this conversation today, Matthew. We first spoke back in 2016, when we were much earlier in the journey of Community Wealth Building (CWB) in Preston. Now, over 7 years on, can you summarise where you’ve got to in the development of CWB in the city, and what the agenda looks like now as things develop further? What would you say are the main achievements of the approach?

Matthew Brown:   Well, I think one thing we’ve done is that we’ve embedded a culture of Community Wealth Building a lot deeper into everything that the council does. Whether those are issues around living wage employment, around re-localisation of public sector contracts, and with regard to local investment.  And that’s all now complemented by an expansion of economic democracy through new worker-owned firms, through cooperative housing projects, through new community land trusts; through insourcing; through work towards the establishment of a regional cooperative bank; and through developing the city centre, including parts of the commercial economy that’s owned by the local public sector, i.e. with Council-owned commercial activities. And there’s further really practical things like our local NHS taking on people from our most deprived communities into decent public sector jobs, rather than the precarious employment that many, many people are in, in other parts of the economy. 

So I think that’s where we are with it. We now have the necessary infrastructure — or the architecture — of CWB in Preston. And that approach has deepened a lot over recent years. And we’re getting a lot of excitement from the community, and support for what we’ve been doing. And the community have been doing this with us, alongside the role of the Council. So things are a little different to 2016, when it was very much the beginning of the journey, and where obviously people were very excited about the ideas of CWB, but we hadn’t yet really developed them in practice. The ideas can be captivating, but what really matters is delivering those ideas in practice and at scale.

MO:  It’s great to hear how things have been moving forward with CWB in Preston. When you started you were a real pioneer:  your approach to CWB in Preston was really the first example of CWB being done seriously on this side of the Atlantic. But obviously, since that time it’s taken root in many more places. So now quite a number of local authorities are pursuing similar approaches. I was wondering therefore if you could say a little bit about where you’ve been really impressed by things going on elsewhere, and whether there are things you’ve learned from examples in other places, and whether Preston has learned from approaches taken by other local authorities?

MB: That’s a brilliant question. You’re being kind to me there, but even in Preston this was from the start the work of many hands, obviously – myself, my colleague Martyn Rawlinson, Neil McInroy and his colleagues from CLES, the Council officers who really supported what we were trying to do, and the whole community in Preston who got behind these efforts. So it was very much always a team effort, and still remains so. But in terms of your question, yeah, we’ve definitely been inspired by what other places have done. For one example, the work of Joe Cullinane in leading North Ayrshire council – sadly Joe Cullinane is no longer Council leader there, but his CWB strategy was probably as ambitious as ours was, if not a little more so due to the fact they’re a bigger local authority. And obviously you’ve got Paul Dennett in Salford, who talks about the Salford Way of CWB, and they have established a council-owned housing company is going to deliver thousands of houses. You’ve got Newham Council in East London, where Rokhsana Fiaz has a CWB strategy, where they’re buying up private sector houses and bringing them back into public ownership for the community. During his time as Welsh First Minister, Mark Drakeford pursued a Foundational Economy strategy there, and even exploring the possibility of a Marcora Law, and looking at a cooperative bank in Wales. They’ve also been looking at publicly-owned Welsh construction and energy companies. So that’s very exciting, and the list goes on … Oxford and Hackney, for example, both have a commitment to doubling the size of the cooperative economy.

So CWB is moving forward pretty much everywhere, and even outside the Labour Party and outside what is being done by Labour councils, there’s the Scottish Government which has been advancing a CWB approach, in addition to the Welsh strategy on the Foundational Economy and their own CWB process. And then, obviously Northern Ireland, there’s been work on a CWB strategy for the Northern Ireland government. And then, additionally, what we’re seeing is a lot of American cities (whether in major cities like Chicago, or smaller cities like Somerville, MA) and more European cities, such as recent developments of CWB in Amsterdam.

There’s a broad appeal to the idea of having a democratic shared economy which comes from examples around the world, whether the Mondragon cooperatives, or the Quebec social economy. The whole movement is really growing, which is exciting. Even the White House has got behind the idea of bringing CWB into federal approaches to regeneration policy.

Preston is quite tiny, obviously compared to some of these other cases I’ve mentioned, but in terms of the ideas, and where they were in 2016, when we first met, and who has adopted that approach since, it is true that we were one of a small number of places trying these strategies back in 2016, and now it seems to be becoming very mainstream, and for me, that is really exciting. It’s exciting to see where the trends are going, and why people are doing something to build more democratic local economies.  And why people are asking, even with the somewhat limited local levers we do have, how we can we have a fair economy, given the vast inequalities of wealth and ownership that we see in our society. And what we can do to push back against those deep inequalities.

My mind is going back to when we in Preston first met Ted Howard of the Democracy Collaborative back in 2012, and how his thinking had been influenced by Mondragon, and how we thought – wow – these ideas can really be something special, and we all got really excited about it. But it all does take time to bring it to scale. But when Ted Howard talked about the Cleveland model, and about how they’d created hundreds of jobs in worker-owned firms, linked to anchor institutions’ procurement. Again, we thought, well, we want to do a bit of this here!

MO: One thing that’s really striking is that all the achievements of the Preston Model have been achieved during a period where there’s not been a very hospitable national politics. The Conservative government has cut budgets to local government, and of course there hasn’t been a lot of sympathy for this kind of approach being taken by ambitious local councils. Can you say a little bit about what more might be possible if there were a more sympathetic national government, and what you might hope to see – all going well – from a Labour government after the next election?

MB: Yeah, obviously having a Conservative government is really holding these progressive economic ideas back. So obviously, the priority is to remove them and put in a Labour government at the next election. I think some of the thinking that Labour nationally have done does very much support and move towards CWB. So, for example, the commitment is still there to double the size of the cooperative economy (as in the 2019 manifesto and following earlier work on increasing the size of the cooperative sector and advancing alternative models of ownership), and there is the potential there with Ed Miliband’s work on GB Energy, and my understanding is that the development of those plans will be linked to the expansion of community and cooperative energy networks, backed by the new publicly owned energy system. Obviously, there are policies around council housing being built at scale again, and policies around the development of a National Wealth Fund. There are policies that councils can provide bus services again directly. So all these things, I think, can really help to advance CWB. 

But with where our communities are in the UK, and the levels of deprivation and de-industrialization that we see, I do think we probably need to go quite a bit further in terms of some of these policies, and I think locally and regionally, we need to be given the powers to do things that are done by local government in other countries. We need to get serious on devolving powers to local government, because we are the most centralised country in Europe in terms of the lack of powers at the local and city level. For example, in Berlin, the city government has been able to municipalise the water supply. That’s something that we just can’t do here. Local government can’t do things like that under the current, highly centralised system we have. To take another example – in Denmark there’s a network of decentralised energy systems held in local public ownership. We need to be able to do things like that, and we need support for community banking, and for regional development banks. 

And I think, potentially, if something like a Marcora law could be introduced centrally, and with support from local and regional government, that could encourage working people actually to have ownership of companies when they are sold. That kind of central government support for a more democratic economy could make a real difference.

MO: Just to clarify that – the Marcora Law – this is the provision we see in Italy that would provide an opportunity for the workers within a within a firm to buy-out that firm if it were changing hands, or if it were in in danger of being closed down.

MB: Yeah, that’s right. And it’s an opportunity that is taken up a lot. And it does obviously create quite a culture of worker ownership that has proved very popular in Italy.

My understanding as well is that CLES have been working with the Welsh Government to develop something similar in Wales. Obviously it can’t be at the scale we see in Italy, because I don’t think the Welsh Assembly has the full powers that it would need to develop this as fully as in Italy. But these ideas have been looked at in Wales, and these kinds of changes at the national level would be really helpful. 

And its significant that a lot of major unions are getting behind these kind of ideas. So, for example, the Communication Workers Union (CWU). Obviously they would want post offices back in public ownership. But if that can’t happen – and obviously it can’t at the moment, given we have a Tory government – they’re very interested in looking at worker ownership of post offices, and looking at post offices as community facilities. Trade unions are very interested in the industrial democracy angle of CWB, and having it as an element of an industrial strategy, and trying to influence the politics, and to influence Labour politicians, both locally and regionally. And these developments could be very exciting indeed.

And, as we’ve discussed before, Martin, look at the NHS Long Term Plan. Even under a Tory government, there is thinking about the role of the NHS as a set of anchor institutions, and there’s huge potential there. E.g. can we recruit people in areas of deprivation? Can we purchase goods and services locally? Can we have affordable housing on surplus NHS land? How can we have a range of interventions to tackle background health inequalities? And can we look at how the NHS estate can help to contribute to moves towards Net Zero?

So there’s been a huge shift in culture with the development of imaginative ideas relating to CWB. But the thing is that this all now needs to be brought to scale. Because inequality is worsening and worsening. Billionaire wealth shot up during the pandemic; the richest people benefitted hugely during a period that was a real national trauma for everyone. But we can really make a difference with CWB, and find ways to push back against trends going in the wrong direction in terms of inequality. Inequality is a real threat to the fabric in society. So we have to do what we can, where we can, to counteract it.

MO: Scotland now has a minister for CWB. Is that something that you’d like the next UK government to bring in, for the Westminster government? If there were a ministerial-level appointment that was focussed on facilitating CWB, and creating a framework for local authorities to develop these sorts of policies at a greater scale? Is that something you’d like to see from the next Labour government in the UK?

MB: I would. That would make a lot of sense. I would expect, and probably hope as well, that they would consider that. We’ve just talked about trends in policy around the world, moving towards CWB. Obviously, when you got the President of the United States of America actively looking to bring CWB into their urban regeneration strategy, when we’ve got obviously our own Labour mayors and Welsh First Minister pursuing these strategies, as well as the devolved administrations of the rest of the UK, in Scotland and in Northern Ireland, doing it, this just shows that something’s going on here, and I think wise heads respond to trends like this. The trends are that this is becoming an increasingly popular movement, and it’s rightly seen as a way of dealing with many of the crises that we face, in the face of an era with more international economic shocks, an era of economic instability. 

I think CWB is also about resiliency. The Labour Party has been looking at the idea of a “take back control” bill, on regional devolution and giving more power to local authorities. Looking back to 2016 and 2017, a lot of the language we were using in Preston was about explaining how CWB was a “Labour way of taking back control”, of bringing power back to our communities. When we were supporting living wage policies, when we talked about supporting local businesses through where we purchased, supporting unionized jobs, and supporting worker ownership, and local credit unions, and supporting publicly-owned developments where local people can get jobs, all these are ways of giving communities more control over their local economies. All our communities can benefit when developments are owned by the city or town. And when we do that then we have a democratic say, obviously, over supply chains and with regard to environmental standards. It’s all very much “a Labour way of taking back control”. 

So CWB really does fit in with everything that a Labour government would hope to achieve. It’s a means to respond to the difficulties that people are facing in the economy, respond in ways that are really going to substantially improve their lives.

MO: The readers of Renewal may know that there are two very good short, accessible books on CWB — one by you, Matthew Brown, and Rhian E. Jones (Paint Your Town Red) and the other by Joe Guinan and me (The Case for Community Wealth Building, reviewed here by Jonathan Reynolds MP). And in our book we talk about the central values underpinning CWB as values of equality and democracy, and we talk about the ways that those values are intertwined: the idea that an economy that does better at distributing power in a more equal way is also going to be a more democratic economy. You’ve spoken just now about the idea of recovering more of the sense of control within people’s economic lives, and of restructuring the economy to give people more of a sense of their own agency, more of a sense that they have a say in their own economic destiny, and where it feels less as if the economy is a domain in which things are simply being done to people, where people feel less alienated and less economically vulnerable.

And for anyone reading those two books, I think there’s a lot of alignment in how we all think about these issues. And it’s been fascinating today again to hear you emphasise some of those values of agency and empowerment, and what can be done by local government to create conditions for people to recover a more egalitarian and inclusive sense of economic agency. But before we wrap up, I wanted just to hear a bit more about your current plans in Preston, and how this approach is being developed further, in terms of goals over the next few years?

MB: Well, we have a lot going on, in transforming our city for the better. We’ve rebuilt our marketas a public commercial space, and a really important community resource. We’ve refurbished Preston Bus Station; we’re refurbishing the Harris Art Gallery and Museum, and we’re building Animate, a publicly-owned cinema and leisure complex. We’ve got new refurbished space for local businesses, all done in municipal ownership. And we’ve worked closely with the University of Central Lancashire (UCLan), which has had similar ambitions as a local anchor institution. So there’s been a lot of development that has been done collectively, and it’s been done in city ownership and for the long-term benefit of the city and its people. And as much as has been possible we’ve done this, within our procurement framework, in a way that ensures that local companies have much more of a chance of winning contracts, and in sharing the benefits of these developments. We’ve done this in a way that keeps wealth in the community and rippling it through the community through our supply chain. So that’s being done. And obviously that’s been a very different approach to your traditional local development model.

But additionally, and probably more excitingly, in terms of trying to have a more plural and diverse commercial economy, we’ve now established eight new worker cooperatives. We have worked with our South Asian community on a food worker cooperative. We’ve got a women-led cooperative that has 15 to 20 members of staff. To take another example, we’re working with a community group in a social housing estate that’s established a cooperative to undertake retrofitting work, that’s been established and can potentially bid for work from our anchor institutions. We’re working with former prisoners, to integrate them back into economic life. We’ve got a trade union-backed cooperative education centre, which works to find opportunities where cooperative and worker-owned models can be an option. So for me, that’s all really exciting, and that’s where the hope is that we want to find ways of working with all of our communities in Preston, and to bring all of our communities in the work of CWB. But we’ve learned really strongly that we’ve got to work with all our communities. 

The list goes on, and we’re working with a range of partners. The local church, in my ward, has established a Community Land Trust. And we’ve got a project with our anchor institutions on renewable energy measures, looking at fitting solar across local businesses and public institutions. And that’s going to be a cooperative, a community energy cooperative, that actually undertakes that work. So yeah, we’re extremely excited where we are with it. And then all looking at other polices, we’re looking at a broadband company as well. So municipal-provided broadband – where people who potentially can’t access broadband through the current market, or it’s too expensive, we’re looking at whether we can provide a service that’s going to be accessible for them, and cheaper. 

For me that’s what’s excited about this, how the community now is beginning to support these ideas. Obviously not everyone in Preston knows about the Preston Model in detail, because people have busy lives, and of course they’re not thinking about the nuances of local government and local economics, and rightly so! But there’s many, many people who see what’s happening and who understand what we’re trying to do now, and many people getting excited by it. You’re seeing now a sense of civic renewal based around partnership and collaboration. And the question now is whether we can build this up at scale, and adopt these kinds of approaches nationally, because the current economic model that we have just isn’t working for people, and we need something that’s new and that’s different to the model that’s failed people. But we know now what the real alternatives can be.

MO: Fantastic –that’s a brilliant and inspiring note on which to end. And I think there’s a lot of food for thought there, for what we all hope will be the incoming Labour government at the national level, to think about what they can do to be serious on devolving power, and giving cities and regions the tools they need to follow creative economic policies, to build community wealth, and to take values of equality and democracy seriously in the structure of the economy. It’s great to see the work you’ve been doing in Preston, which shows the proof of concept for a very different approach to the economy. It’s great to see this flourishing, so let me just end by wishing you all the best for the local elections!

Preston Labour Party’s Manifesto for the 2024 Local elections can be read here. 

Matthew Brown is Leader of Preston City Council, a Senior Fellow at the Democracy Collaborative, and co-author (with Rhian E. Jones) of Paint Your Town Red: How Preston Took Back Control and Your Town Can Too (Repeater Books).

Martin O’Neill is Professor of Political Philosophy at the University of York, and a Commissioning Editor at Renewal: a Journal of Social Democracy. He is a member of the Trustee Board of the Democracy Collaborative, and is co-author (with Joe Guinan) of The Case for Community Wealth Building.