Place-based industrial strategies and ‘guerilla localism’
When I started writing a column in ‘Town & Country Planning’ in 1986 it was called ‘Futurework’ because I reported on new initiatives and developments in the world of work, particularly amongst co-operatives, initiatives in local economic development, and the gradually emerging ‘green economy’. The column’s title was taken from a book of the same name by the early exponent of a sustainable economy, James Robertson, who celebrated his 90th birthday in August.
I was recently interviewed for a National Co-operative Archive oral history project on the worker co-operative movement in the UK in the 1970’s and 80’s. The National Co-op Archive’s project is collecting memories and artefacts from those days thirty five years or so ago and an exhibition to which I have contributed runs at the Rochdale Pioneers Museum until the end of January 2019. This caused me to reflect on where this wonderfully idealistic movement is today, what worked, what didn’t, and why.
My first reactions were quite downbeat. The worker co-op movement in the UK today is a shadow of its former self. Why? The reasons are complex and some of the micro-elements are important; lack of access to capital; regulatory challenges and hurdles; a tendency to focus on rather niche areas such as wholefoods meaning that when they became mainstream, supermarkets moved in and squeezed them out; wages were often too low to maintain employment; a sense of ‘cultural isolation’ where co-ops are so few and far between; and the support that local authorities provided as part of their local economic strategies withering in the face of globalisation.
The embrace of neo-liberalism as exemplified by the march of globalisation was a crucial cultural shift. In the UK that shift can be dated from the deregulatory ‘big bang’ of 1986. It was a shift from a collective sensibility whether expressed through patriotism or common endeavour and what people shared as citizens, to the embrace of identity politics and an aggressive consumer culture and it has created a rampant individualism. Identity politics fused with market fundamentalism have led to an inexorable decline in the appeal of mutuality, self-help, localism and the idealism expressed in the flowering of the worker co-operative movement. No wonder the very idea now seems either quaint or utopian.
But globalisations flaws have been cruelly exposed since the financial crash of 2008 and the antics of nationalists and protectionists around the world are producing trade wars and the breakup of an international order based on multilateral institutions. Globalisation hasn’t worked everywhere, to say the least, and those areas ‘left behind’ in its wake have become in many cases economic wastelands with the rise of the ‘Tea Party’ and latterly Trump, feeding off the sense of abandonment in the USA, the Brexit vote in the UK in 2016 and the rise of the far right across Europe.
There has also been a rise in the ‘populist left’ parties and movements such as the Bernie Sanders insurgency in the USA, Podemos and Syriza in southern Europe, Green parties from Iceland to Austria, which have a Green Party Prime Minister and President respectively, and the Corbyn-led Labour Party in Britain. These have encouraged new approaches to economic management which are being floated and tried out in the spaces left by the collapse of the neo-liberal behemoth. ‘Doughnut economics’ (October 2017 post), the work of the New Economics Foundation (NEF) (1) and the Manchester-based Centre for Local Economic Strategies (CLES) (2) are crucial underpinnings. Unsurprisingly, the point of departure they sketch out is quite a gloomy one. Just one statistic; in calling for a doubling of the co-op economy in the UK by 2030, NEF concedes that the current sector is less than 1% of business turnover, and over 50% of that is accounted for by just two enterprises, the John Lewis Partnership and the Co-operative Group. But the vision is far more positive, and there is some evidence of progress on the ground too. The CLES report points to a series of initiative being taken by proactive local authorities including inclusive ‘living wage’ jobs, invigorated local supply chains, a strengthening of the resilience of local businesses and their networks, increased local spending through the letting of public sector contracts and the emergence of ‘place-based’ industrial strategies.
Poster child for this process is Preston in Lancashire. Indeed the ‘Preston model’ is being touted by the Labour Party as the example of what a radical re-think of economic policy can do. It was the first case study on the Guardian’s ‘Alternatives’ series by its economics columnist Aditya Chakrabortty (3), a series that has been running throughout 2018. Preston like quite a few other small cities in relatively peripheral parts of Britain really struggled after the financial crisis a decade ago. Major local employers such as British Aerospace and GEC downsized or disappeared altogether and the city’s economy shifted from being a centre of production to one of consumption. Or more accurately, it didn’t. The proposed new £700m shopping mall in the city centre collapsed in 2011 when, ironically, the John Lewis Partnership pulled out. The sums no longer added up and the scheme died, leaving a vacuum where once there had been a masterplan. Chakrabortty describes what followed as ‘guerilla localism’ led by the City Council.
The process is incremental, building on what already exists or has worked elsewhere and like fitting the pieces of a jigsaw together, begins to create a new picture. Revitalising the credit union, paying the ‘living wage’, supporting the local co-ops sector, revamping the long established covered market and the controversial bus station, have gone hand in hand with more ambitious measures. Pulling together the major public sector employers, Lancashire county council, Police, NHS, University of Central Lancashire and the local housing association to harness public sector procurement has proved transformative. CLES reckon that while only 40 pence in the pound is re-spent locally if directed to large or multi-national companies, that jumps to 63 pence with SME’s. It has required a lot of creativity in terms of restructuring contracts to create bite-sized chunks that local companies can bid for, a process of shaping a market to fit the local economy, but it has worked. Despite public sector expenditure overall shrinking from £717m to £650m between 2013 and 2017, expenditure by these local public bodies rose from £38m to £111m in Preston, and from £292m to £468m in Lancashire as a whole. That is a lot more money in local people’s pockets and a lot more to spend on local goods and services. Cllr Matthew Brown the driving force behind the ‘Preston model’ and now the Leader of Preston city council, describes the process of re-structuring contracts and public sector procurement as ‘unlocking social value’. He has persuaded the Lancashire county council pension fund to invest £100m in the city in a student housing project. All this he characterises as ‘community wealth building’, a trickle up from businesses ‘who don’t get up and leave, but are rooted in our community’, rather than the trickle down of the globalist inward investment model.
It is all very reminiscent of the approaches adopted before the ‘big bang’ by local authorities from the Greater London Council to Sheffield, who were fighting the impact of Thatcherism on their communities thirty five years ago. But then the forces of globalisation were just being unleashed on local economies and communities; the mantra was ‘There Is No Alternative’. Now that model looks decidedly shaky as wages and productivity are stagnant (at best), investment low, growth anaemic, consumer debt high, inequality stark, and asset bubbles frequent. For localism, mutuality and sustainability perhaps their time has come, as that ‘Alternative’ looks like no alternative at all. Maybe Preston provides a beacon as the best way forward for local economies, and the spirit of those co-operative experiments of the 1970’s and ‘80s will finally come to fruition.
References
- https://neweconomics.org/2018/07/co-operatives-unleased
- https://cles.org.uk/publications/local-wealth-building-in-birmingham-and-beyond/
- https://www.theguardian.com/commentisfree/2018/jan/31/preston-hit-rock-bottom-took-back-control
This article first appeared in the September 2018 issue of Town & Country Planning.
Nicholas Falk
October 20, 2018
The UK needs not only to look at its past, but at what is happening in the rest of Europe. Mondragon in the Basque country in Spain shows how the economy can be rebuilt by cities, universities,and business collaborating helped by a local financial institution. But housing in Denmark or Switzerland shows how co-ops do not have to depend on economic isolation to thrive. 25% of housing in Zurich is provided by co-ops and a referendum there committed the city to raising the proportion to 30%. Mehr auf Worhnen is particularly worth visiting as it shows what a better future could be like.