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The Preston Model

When it became clear that large amounts of inward investment for large regeneration projects, and out-of-town mega-stores, was not going to happen, Preston (Lancashire) decided to fix the problem locally. Could anything be done?

Political ideology aside, out-sourcing contracts inevitably leads to money flowing out of a local area, and into the pockets of shareholders of large national, or multinational, corporations.

Several years ago, Preston City Council embarked on an examination of how much money was being lost from their local economy, and why. They have turned this loss around and generated local jobs and a vibrancy in the town that surprised even the most causal observers. How is this being achieved?

Councils provide services through their expenditure. They have immediate control, and influence, over how organisations such as colleges, refuse and recycling collection, police, hospitals, social care providers, local housing associations, and the local emergency services, spend their money.

1.  They took a place-based approach.

They talked to local people about what their needs were and what assets they had at their disposal. They didn’t look at providing services in isolation. They looked at how to provide services that satisfied multiple needs of people.

2.  They looked at how services actually provided social value.

They worked with local groups to determine what was socially valuable and how it could be achieved. They prioritised working with local organisations that had local connections and local knowledge.

3.  They committed to building local community capacity.

They actively supported local organisations to take on the provision of services. They developed a policy of identifying and supporting those organisations that anchored the community. They worked to bring together organisations that could deliver a range of services.

4.  They set a maximum value on the size of service contracts.

They explored how to re-size contracts and use different payment methods that would allow local organisations to win those contracts.

5.  They involved local people in the co-design of services.

They viewed local organisations as partners in a process of defining and delivering services. They saw local organisations as having expertise that could contribute to achieving goals.

Through this process they created a shared commitment between the council and its residents to supply services locally and thereby create a strong local economy that keeps money circulating within that local economy as much as possible.

This has expanded to involve: the private sector, the public sector, and the social sector to:

  • Provide social justice
  • Create economic democracy
  • Become a living wage employer
  • Back a credit union for local financing and business growth
  • Encourage and support worker cooperatives

The council has been able to deliver on its commitment to:

  • Building an inclusive economy
  • Becoming a Living Wage city
  • Investing in its own future
  • Reducing the cost of living
  • Becoming a greener and cleaner city
  • Providing decent, affordable housing
  • Becoming a city of creativity and culture
  • Becoming a healthier city where everyone matters

Infographic from The Next System Project
Creative Commons Licence

The current City Council has made the following twelve promises:

✓ Preston will invest in public infrastructure, increase the amount spent by the public sector with local enterprises, and encourage local recruitment creating thousands of new jobs.

✓ Preston will regenerate the city centre with a £35m cinema and restaurant development and co-invest £10m in the Harris Museum, Art Gallery and Library.

✓ Preston will establish a Community Bank that will lend £500m across the region and promote a Lancashire Wealth Fund to invest further in our local economy.

✓ Preston will create 10 new worker owned businesses in Preston in partnership with UCLan and Spain’s Mondragon Cooperative Corporation.

✓ Preston will increase the number of employers paying the real living wage by becoming one of the UK’s first Living Wage Places.

✓ Preston will expand free or low-cost meals during term time, expand breakfast provision and work with charities to supply free sanitary products for girls.

✓ Preston will invest over £100,000 in financial inclusion and protect first-class services providing housing, debt and benefit advice.

✓ Preston will maintain our parks and public spaces to the highest standard and push for a devolution deal that will include local franchising of bus routes.

✓ Preston will create a delivery vehicle to enable the council to build housing again and ensure at least 30% of housing is affordable on larger new developments.

✓ Preston will work with partners to address the root causes of homelessness, establish a new social lettings agency and 24-hour walk in centre for the homeless.

✓ Preston will continue the popular events programme that include Lancashire Encounter, Rockprest, Armed Forces Day and Race for Life.

✓ Preston will challenge hate crime, all forms of racism and discrimination and work with the Police to prioritise resources in areas of greatest need.

Preston Labour Manifesto 2019

The Guardian: Why councils are bringing millions of pounds worth of services back in-house - 29 May 2019

Jeremy Corbyn speech to Labour councillors in Nottingham Saturday - 3 February 2018

The Economist: Preston, Jeremy Corbyn’s model town - 19 October 2017

The Sunday Times: Buy local, hire local: Preston blossoms on Corbynomics - 29 October 2017

The Daily Mirror: How one city is beating Tory austerity with 'radicalism on a shoestring' - 4 Novenber 2017

Shadow Chancellor John McDonnell:Labour will end the waste of potential across the UK and build an economy that works for everyone - 4 November 2017

The Guardian: The Preston model: UK takes lessons in recovery from rust-belt Cleveland - 11 April 2017

The Next System Project: The Preston Model - 9 September 2016

Centre for Local Economic Strategies (CLES)

It works! So, why aren't we taking this approach in Torbay?

Torbay First

Preston's approach to its economy may be broken down this way:

✓ Expenditure.

By buying locally and hiring locally, since 2013, Preston has worked with its public sector institutions (including its university and college, the County Council, and police service) to ensure that the public wealth spent by these organisations is spent locally, to the benefit of the local community. In 2017 an extra £75 million helped create hundreds of jobs in Preston; as well as expanding the living wage, apprenticeships and other social and environmental outcomes for the community.

Where no local suppliers exist for a given sector, Preston has worked to create and support local co-operatives to provide jobs.

Preston has re-structured its own senior management to ensure that spending is directed to the citizens where it is most needed.

✓ Employment.

Preston will not employ people on zero-hour contracts, and it will pressure organisations in its own supply chain to do the same. By doing this it creates what is known as social value through its own purchasing.

Preston have declared themselves a real living wage employer, having become the first employer in the north of England to be accredited with the Living Wage Foundation in 2012.

This has encouraged sixty other organisations to follow suit. In particular, this has helped women, often in low-paid part-time work. They are using the national Living Wage Places initiative put pressure on its local hospital to pay the national living wage.

With 24 bank branches closing since 2008, Preston realised that it had to provide alternative financing arrangements for its local businesses. It is working to create a North West Community Bank to provide support for local individuals and businesses.

This co-operative bank will lend £500 million within eight years.

Supporting the creation of apprenticeships wherever possible is key.

✓ Investment.

✓ Cost of Living.

Preston has launched an initiative that helps people obtain cheaper energy tariffs than those that are supplied by the big energy companies; often saving hundreds of pounds annually for a household.

Additionally, they support schemes that provide cavity and loft insulation, and boilers to save on household energy bills.

Preston has invested in new markets and a co-operative that provide locally produced food (such as fruit and vegetables) to residents, at two-thirds the price of the large supermarket conglomerates.

Preston works will local cafes and foodbanks to provide support to families in need. They have partnerships with local organisations that provide surplus food for free, or low-cost, meals during term-time to children. Over the last nine months they have supplied over 4000 meals, saving families up to £30 a week.

Additionally, Preston are investing in initiatives for providing breakfast to children where they have found a desperate need.

✓ Environment.

Preston's refuse collections and re-cycling services are in-house, not out-sourced.

Preston is taking the initiative to create new sources of renewable energy provision; and opposing environmentally damaging fracking.

Preston has banned the use of single-use plastics on its premises and is encouraging supermarkets to do the same. This has the knock-on effect of reducing the need for recycling, and saves collection and processing costs.

✓ Housing.

Preston ensures that at least 30% of new housing developments are affordable and also available for social rent. This has helped deliver hundreds of homes for local families.

They work with local support groups to bring empty properties back into use. Council land has been made available to affordable and social home developers.

Preston has invested in a social lettings agency to secure fairness for those who are at risk of homelessness. The Lancashire Pension Fund is investing in new shared equity housing. Preston works very hard to address the housing needs of its residents; including setting up a Community Land Trust.

Preston adopts a multi-agency approach to reduce homelessness. Homeless people often have complex needs revolving around substance abuse and mental health issues. Preston has an approach to homelessness that has led to th elowest level in the north-west.

A partnership with a local organisation provides a new 24-hour drop-in facility for rough sleepers and the homeless.

✓ Culture.

Due to financial pressures forced upon them by central government, Preston has had to out-source the management of two leisure centres to protect jobs and maintain existing services. But, instead of selling the assets to a private company with shareholders, they work with a charitable social enterprise that re-invests profits back into the community, and supports an employee-owned approach.

Preston is investing in an initiative that will see the town’s museum become the UK’s first blended museum, library and art gallery. The aim being to see a key anchor institution engage with the community and expand access to culture.

Preston runs an annual events programme that centres events around its markets and parks. These events include cultural, music, and sports.

✓ Health.

Health provision is very important to Preston. It is one of only a few authorities that has adopted Health Impact Assessments that encourage new GP provision, open spaces and quality housing to create healthier communities.

Where GP services are relocated, Preston tries to ensure that their communities are not adversely affected. Providing new bus routes is one way of doing this.

It is a high priority to reduce the level of smoking. Preston continually aims to be below the national average.

Mental health and suicide prevention is a big challenge for Preston. They have devoted resources to tackling this serious issue.

✓ Inclusiveness.

Many people have trouble creating bank accounts and accessing online services, especially for Universal Credit, where central government has forced services online. Preston has initiatives to help people caught in this trap.

Preston has established a city-wide credit union (a not-for-profit savings and loans co-operative) that provides credit facilities to residents that may have difficulties borrowing elsewhere. They aim to remove the need for doorstep and payday lenders.

Preston supports advice services and work clubs that have helped people get over £10 million in unclaimed benefits; including representation at tribunals.

Rather than selling-off parks and green spaces, Preston has secured millions of pounds of external funding to improve parks and sports facilities; in particular from the Heritage Lottery Fund.

The Townscape Heritage Fund has allowed several office spaces to be brought back into use. Working with local groups, Preston has used the planning process to increase allotment provision.

Preston works hard to ensure that all citizens feel a sense of inclusiveness; especially as Brexit is pulling communities apart.

For the elderly community, Preston engages on issues such as the cost of heating in winter, isolation, elderly employment, and benefit claims. They promote dementia awareness and even ensure that taxi licensing is responsive to older people’s needs.

Preston ensures that awareness of child abuse, sexual exploitation, and online bullying is highlighted. They work on policies and awareness of mental health issues for young people. They ensure that economic policies provide work opportunities and apprenticeships.

Preston recognises that a diverse community provides opportunities for similarly diverse cultural activities. This helps to build cultural values, tolerance, and respect. Events such as Preston Mela (South Asian culture), Preston Pride and Standing Together Against Racism help bond communities together.

Preston ensures all services are assessed so that no group of people is negatively affected, and that services have due regard to disabled people’s needs.

Preston works with the Police and Crime Commissioner, and others, to enhance the rights of women. They support services that help women escape abusive relationships and hygiene poverty.

For school children, Preston is expanding its provision of free or low-cost meals during term-time including breakfast.

Preston takes a very tough line on hate crime and modern slavery, by ensuring that it is eliminated in its suppliers, and for example, lobbying government to licence car washes.

Central government cuts since 2010 has reduced community spending by more than a third. When they have been forced to dispose of local service provision, they have not sold them to large corporations and out-sourcing firms but has instead sold them to the organisations' employees.

To raise money for charitable causes, Preston is looking into creating a not-for-profit lottery.

On public transport, Preston supports the licensing of bus franchises to ensure democratic control over the price and quality of bus services. They are pushing for new transport routes when, for example, GP services disappear from an area.

Lots of great stuff there. How does Torbay compare?

Torbay v. Preston Comparison

Torbay compares poorly with Preston.

Residents have lost faith in the Council's ability to enhance their lives. Exceedingly poor local election turnout exemplifies that fact.

Often we hear: "The Council? Bloody useless, the lot of 'em!"

The reality is that there are many local councillors who do care about the whole community (rather then just their own social group). The problem is that they are constrained by the overall policies that are being followed. Westminster is equally out of touch.

Of course, it usually comes down to money. Preston's Building Wealth Management approach is simple: keep local money in the local economy. That builds the local economy and consequenty generates wealth. With that wealth, money is available for local social programmes. It's not rocket science.

So, let's explore how Torbay Council currently spends local money: The money it has direct control over.

Our approach is to explore expenditure that we can most readily understand in order to get an overall picture of how Torbay Council approaches its expenditure.

As a Unitary Authority, Torbay Council has responsibility for:

  • Education
  • Housing
  • Planning applications
  • Strategic planning
  • Transport planning
  • Passenger transport
  • Highways
  • Fire
  • Social services
  • Libraries
  • Leisure and recreation
  • Waste collection
  • Waste disposal
  • Environmental health
  • Revenue collection

Note: Within the Torbay Unitary Authority, Brixham Town Council, has responsibility for:

  • Allotments
  • Public clocks
  • Bus shelters
  • Community centres
  • Play areas and play equipment
  • Grants to help local organisations
  • Consultation on neighbourhood planning
  • Fixed penalty fines for: litter, graffiti, fly posting, dog offences

£400,000 spent on security for Oldway Mansion, by a London-based company.

£13,000,000 spent on land to build an Amazon Distribution Centre, in Exeter.

£3,000,000 spent on a factory Building, in Bodmin, Cornwall.

£1,000,000 spent on legal advice for a land sale, by an international law firm.

£7,000 spent on printing parking tickets, by a London-based company.

£15,000,000 spent a year for refuse collection, recycling, and road maintenance, by a Midlands company.

£600,000 spent a year, for 15 years, for running public toilets, by a Bristol company.

£25,000,000 spent over 25 years to run the cemeteries and crematorium, by a Bristol company.

It's not hard to see the glaring difference between Preston and Torbay. In Preston, there is a very conscious effort to keep money in the local economy in order to fund jobs and services.

In Torbay, there is a focus on money first and foremost, with little thought for social consequences.

We have not yet done a comparison by value, but by contract only 25% of contracts go to local companies.

Note: This is our current area of investigation, it is incomplete, and may contain errors.

Local Government Powers Local Economy...

Local Government Creates...

Local Government Supports...

Local Public Bank Supports...

Local Energy Provides...

Local Pension Funds Invests...

Local Institutions Purchase Locally...

Local Credit Union Funds...

Local Worker Cooperatives Provide Jobs...