Danny Moran on the poster town for ‘Corbynomics’ which is beginning to change the debate on local government
It gave us the temperance movement, Tom Finney and - if hipster architecture fans are to be believed - the sexiest bus station in Christendom (pictured above). But now Preston is being hailed as the success story to lead local government out of the post-crash austerity mire. The thinking behind this economic revelation is based in Manchester. So is the ‘Preston Model’ set to change the debate on how cities can be run? And could the so-called ‘Corbynomics’ pioneered there be replicated here?
Here’s the script. Seven years ago the central Lancashire town was just another hollowed-out municipality with the same big dumb idea kicking around its town hall as you’d find in many town halls across the land. In a bid to Red Bull the economy a giant £700m shopping mall had been planned - an asteroid-sized behemoth set to be built in the central retail district, to be called ‘The Tithebarn’.
From carpeting to concrete, catering to computing, if it could be found locally then location was prioritised over cost
But then the crash happened, the crunch followed, and big name partners pulled out. As tears dried over the barn dream that died, Preston council looked down the M61 in its search for alternatives. Self-styled Mancunian ‘think and do tank’, the Centre for Local Economic Strategies, stepped in.
What happened next is worthy of your attention because it purports to offer a way out of the Big-Money-chasing trickle-down spiral in which local authorities such as our own are said to be trapped. Neil McInroy and his team had been researching ways to stop the haemorrhaging of wealth from local economies. They conducted a study of Preston and found that of public money spent there in 2013 only 5% was retained in the city, and only 39% stayed in the Lancashire area. The rest drained away.
In an age of hypermobile capital - money which enters and exits the economy at great speed, such as through shareholders, speculators, rentiers or large corporations - the problem they identified was that the economy of Preston and the people of Preston had become estranged from one another.
Preston was named by accountancy firm PriceWaterhouseCoopers as the UK’s most rapidly improving city
Instead of the barn
The question, then, was how to find ways to keep wealth local in order to stimulate the economy from within. McInroy persuaded council leaders to abandon the orthodoxy of making the city attractive to foreign investors. Instead, he suggested that key ‘anchor institutions’ be brought on board - the police force, the health service, the housing association, the university, the town hall itself, those who disburse large sums of public money - and persuaded to radically change their criteria for procurement and hiring.
There are strict laws governing the tender of services, goods and labour. But if aims are weighted towards ‘social value’ then the markets can still be slanted in favour of localism. Thus with ‘localism’ as its banner, Preston - having declared itself the nation’s first living wage municipality - went to work.
Co-operatives were prioritised. Credit unions were backed. The market hall was revamped and upgraded. Anchor institutions demanded that those bidding for its contracts demonstrate how they would benefit the city’s social fabric, hire locally, provide training, and partner with local businesses. HR departments began likewise to apply similar criterion to recruitment. Outsourcing was minimised as partners opted to pay that little bit more for local trade. From carpeting to concrete, catering to computing, if it could be found locally then location was prioritised over cost. Land banking and property speculation were dampened down amidst a wholesale democratisation of the economy.
Slowly, the many little elements which make up the city’s economic landscape began to be re-animated. Slowly, the economy of Preston and the people of Preston began to be reacquainted with each other.
That’s the script, and thus far it’s a cogent narrative. For this month Preston was named by accountancy firm PriceWaterhouseCoopers as the UK’s most rapidly improving city. Assessing a range of metrics - employment, workers’ pay, house prices, transport, the environment, work-life-balance and inequality - against forty-two other UK cities, they found that Preston had improved the most in its 2018 ‘Good Growth’ index.
Over the previous twelve months, it can be noted, the amount of public spending which has been reinvested in the local economy has grown from 5% to 18%. The amount which has stayed within Lancashire has risen from 39% to 80% - a small matter of £200m. The Economist now acclaims the city as the “poster child for Corbynomics” and the ‘Preston Model’ is said to be at the heart of Labour’s thinking, hailed by the leadership for its “inspiring innovation” in the face of market liberalism.
'Manchester lacks resilience, it’s a one trick pony'
One trick pony
“It’s brought pride back to the town,” says businessman Michael Conlon, whose construction firm has won a string of contracts under the new regime. Conlon is more than happy to do what his client wants in order to earn their business. “The place is lit up, thriving, buzzing. This part of the city, round the market, it was dead. It’s brought it back to life.”
“There’s a restaurant opening every week,” agrees butcher Sam Livesey, who doubles as chairman of the Market Traders’ Association. “It’s revolutionising Preston, and it’s the independent traders who are feeling the benefit.”
The idea that Manchester might take a lesson in economics from the likes of Preston might seem laughable to some…but for many this city of luxury apartments, poverty and gridlock is in need of repair.
So could any of this be of benefit here?
Asked about the recent plaudits McInroy stresses his organisation’s political independence – as any proper think and do tank does – but at the same time he’s bullish about a project which is beginning to win take-up in such places as Auckland, Bologna, Barcelona, Birmingham and Prague.
“Our first work in 2007 was in Manchester,” he says. He’s politic enough not to talk down the incumbent regime here. “You can’t turn around the forces of global capitalism, so Manchester has got to play the game, and it does the global city thing very well.”
“It lacks resilience, though, and it’s a one trick pony. If there’s a downturn it could get a bloody nose. Manchester needs to get into the new economics, which are more about people than place. Re-focus attention on social enterprise, worker co-operatives, municipal enterprises…because they hold in the wealth.”
There’s contact, there will be discussion no doubt. Who knows the long-term prospects for the plan? What’s clearer is that, whatever your politics, after such widespread discontent at the ways of the city council, there’s at last an identifiable alternative up for debate.
Not Manchester’s style? “They’re not early adopters,” says McInroy. “But then this isn’t strictly new. It’s classic social democracy. It goes back to Adam Smith. This is about refusing to tolerate the intolerable. The economy isn’t worth a puff unless it can do that.”