Preston: Building a new local economics

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Preston Council is leading a community wealth building project, aimed at keeping more money in the local economy

Almost £500m leaks out of Preston each year. Now the council is working with the city’s anchor institutions to help them use their spending power locally.

Anchor institutions – local authorities, hospitals, universities and housing providers – are key components of local economies and places. They are significant employers and investors in communities, largely unfettered by global economic change, and wedded to place.

They are also significant spenders, with large annual budgets for staff, food, energy and other supplies and services.

The challenge facing anchor institutions is that while they are wedded to place they are far from embedded in place. They draw in labour from other towns and cities, purchase goods and services from large non-local corporates, and will often fail to collaborate with key local institutions, instead operating on a silo basis.

Inspired by the Evergreen model in Cleveland, Ohio, and the co-operative culture of Mondragon in Spain, Preston has embarked on a period of behaviour change in its own anchor institutions to help them bring maximum benefit to the local economy and Preston residents.

Locally responsible behaviour of anchor institutions formed part of a suite of proposals adopted by the returning Labour Group in 2011. Their manifesto was framed around ensuring any existing or new investments for the city reaped fair outcomes, starting with Preston Council becoming the first in the north of England to be accredited living wage status.

The council recognised the potential of anchor institutions towards boosting the wider growth of the Preston and Lancashire economies and helping sustain local businesses and employment. In autumn 2013 it began to steward the behaviour of the local housing organisation Community Gateway, and other public institutions, starting with a conversation about procurement and purchasing choices.

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