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Opinion: How Preston Council claim they are starting a financial revolution

Posted on - 8th January, 2017 - 7:00am | Author - | Posted in - Business, News, Opinion, Politics, Preston Council

Shadow Chancellor John McDonnell MP visiting employee owned TAS Partnership on Guildhall St – April 2016

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Shadow Chancellor John McDonnell MP visiting employee owned TAS Partnership on Guildhall St – April 2016A new year has begun and politics is embracing something of an anti establishment feel. Whether that is Brexit, the rise of Scottish nationalism or the re-election of political outsider Jeremy Corbyn as Labour leader we see frustration towards an establishment perceived as advancing its own interests when it should be looking after ours.

And while the media often blame all our woes upon the EU, trade unions and immigration those at the top of society appear immune from exercising the same responsibility they demand from the rest of us. Very baffling considering the austerity of the last ten years emerged from a reckless financial system each family in Preston paid over £4,000 to bail out with public sector cuts, attacks on wages and rising costs of living the reward for our support.

At the top of society large banks and corporations receive billions in tax reductions and corporate welfare often not paying the amount of tax the law intends while many small businesses cannot access finance and work can be insecure with zero hours contracts and low paid self employment on the rise.

The system is broke and sensible but radical solutions are needed to fix it. That is why Labour in Preston is embracing much of this alternative spirit with a powerful social justice agenda aimed at capturing wealth in the community and sharing more of it with the people who live here. It is a transformative agenda comprising of three key elements.

Firstly, we are working to tackle low pay and ensure Prestonians have access to more affordable housing, credit, food and energy. In 2012, Preston City Council was the first local authority in the North of England accredited as paying the real living wage of £8.45 an hour and we encouraged other employers to do the same. Five years later over 50 living wage employers operate in Preston with the ONS confirming Preston as the second best local authority area in the North West for part time female workers receiving the real living wage or better.

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Through the planning process we ensure developers provide at least 30% affordable housing on most new housing developments and we are making council land available for social housing. We established a city wide credit union “Guild Money” with now nearly 500 members and fund the voluntary sector with over £120,000 each year to combat financial exclusion. We are investing £7 million in our excellent markets redevelopment with a comprehensive affordable food offer and provide a range of energy efficiency measures including free home insulation to reduce household energy bills and much more besides.

Secondly, we will follow where the Preston pound goes as we want it to remain here. Our Community Wealth Building project now receives EU funding and has 12 large public and not for profit organisations in Preston and Lancashire signed up including UCLan and Royal Preston Hospital. The aim is to repatriate more of the considerable public wealth spent on goods and services by these “anchor institutions” to benefit the local economy. Already over £4 million that would have leaked out has seen Preston based businesses win contracts for food, printing, fuel, legal services and construction.

Lancashire’s Pension Fund is another custodian of significant local wealth comprising of public sector employee and employer contributions for over 70,000 Lancashire workers. Our Leader Peter Rankin has worked with the fund to invest in Preston’s economy including the Friargate student flats development and the Park Hotel as part of our City Deal. Many more opportunities exist for local development with growing interest from trade unions to invest less of their members pensions in risky equities and more in sustainable investments like affordable housing and renewable energy.

New flats being built in Friargate are funded by the Lancashire Pension Fund

New flats being built in Friargate are funded by the Lancashire Pension Fund

Finally, we want to change the system by bringing more democracy to the local economy. Labour is particularly keen on promoting cooperatives as they capture wealth for the people within them. We have some relatively new cooperatives organisations in Preston including Link Psychology Cooperative and The Birley but we want to go further and promote worker owned cooperatives especially if local businesses don’t exist to bid for public contracts or when business owners are selling their enterprises when retiring.

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More new initiatives will follow this year with our Cabinet Member for Community and Environment Robert Boswell due to publish proposals for Preston City Council to become an energy supply partner offering a local alternative to the Big 6 energy companies. We will investigate the feasibility of a community bank similar to those operating in Germany’s highly successful devolved banking system and see how a new combined authority could establish a Lancashire wide development company to increase the supply of housing.

All this put together shows we have the potential as a community to take more control of our destinies at a time government gives us less money and Brexit threatens the national economy. It is a radical but eminently sensible series of measures known as “The Preston Model” we want you to embrace and support. My only request this year is to keep your eyes and ears open for these opportunities and consider the part you can play to make it a unique local success story and a shining beacon for the rest of the UK to follow.

Councillor Matthew Brown is cabinet Member for social justice, inclusion and policy on Preston City Council

What do you think of councillor Brown’s comments and policy? Let us know in the comments below

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