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What next for the Preston Model? Investing in worker owned co-operatives in the city

Posted on - 10th March, 2019 - 7:00am | Author - | Posted in - Business, Politics, Preston City Centre, Preston Council, Preston News, UCLan
The new Preston Market Hall with the bric-a-brac market out front Pic: Tony Worrall
The new Preston Market Hall with the bric-a-brac market out front Pic: Tony Worrall

More than three-quarters-of-a-million pounds is to be spent in exploring setting up a number of co-operatives in Preston.

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Badged as the next phase for The Preston Model, which is attracting national and international attention, Preston City Council has announced a partnership with two organisations.

The University of Central Lancashire and Co-operatives UK will work alongside the city council in seed-funding a range of ten worker co-operative start-up businesses.

Funding of £764,680 either in cash or ‘in kind’ support has been secured from the Open Society Foundations, as well as coming from the university, city council and Co-operatives UK.

Around £100,000 is being invested by the city council according to the budget documents for 2019-20.

A co-operative education centre is also earmarked to open in the city.

Management of the co-operatives would be undertaken by the Preston Co-operative Development Network which would be set up to run on a model similar to 1Work1Vote in the United States and the Mondragon Group in the Basque Country.

Both of these organisation seek to create networks of shared ownership and unionised work-owned co-operative businesses.

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UCLan’s Dr Julian Manley has been appointed as chair of the Preston Co-operatives Development Network.

Dr Manley told: “It’s a total of $1million for the whole project with financial and ‘in-kind’ contributions from UCLan, the Open Society Foundations and Preston City Council partly through its Investment Strategy Fund.

“The majority of this money will cover the creation of around 10 worker-owned co-operatives to be financed by the Preston Co-operative Development Network (PCDN). There will also be support for a possible Preston Co-operative Education Centre; part of a joint co-operative University project with the Co-operative College Manchester.

“Further funding will be directed to consultancy and training from the Mondragon Cooperative Corporation.”

Architect of the Preston Model is council leader councillor Matthew Brown.

He said: “I am proud of what we have already been able to achieve in and for Preston through the Preston Model through our work with partners, making a significant impact through our purchasing decisions.

“This funding will enable us to take a bold next step towards creating an improved, more democratic local economy. Doing this with support of well-established, innovative organisations such as LKS Mondragon consultancy services and 1Worker1Vote, in tandem with a similar project in New York underscores the importance of what we are trying to achieve for Preston.”

The Larder, a community run cafe and outreach project in Lancaster Road, is the kind of business the city council wants to encourage Pic: Tony Worrall
The Larder, a community run cafe and outreach project in Lancaster Road, is the kind of business the city council wants to encourage Pic: Tony Worrall

Alongside the second phase of work on The Preston Model, the city council has vowed to put £1million into setting up a community-owned and operated bank for the North West.

Director of grants, economic justice programme at the Open Society Foundations David Bright said: Worker owned businesses have proven more resilient than other business models, whilst established businesses provide workers with better terms and conditions, which in turn drives improved productivity. However starting and nurturing Worker Co-Operatives is tough, even when drawing on the experience of Mondragon and others.

“We hope building networks that can support Worker Co-Operatives flourish in Preston and the Bronx (New York) will inform other cities in the UK and US considering similar strategies.”

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What is The Preston Model?

It’s been in the works for a number of years. Locally within the council it was referred to as Community Wealth Building.

Councillor Matthew Brown before becoming leader was cabinet member for social justice and communities.

Establishing a credit union and working to get big employers like UCLan, Lancashire County Council and others to assess their spending – and see what could be allocated locally is at the heart of it.

Anchor institutions is what Cllr Brown refers to them as, with millions of pounds now spent locally instead of outside the Preston area.

He, and supporters of the Preston Model, say this helps to make the city’s economy more resilient and also increases a sense of accountability.

With the death of former council leader Peter Rankin, cllr Brown became leader in May 2018 after the local elections.

Since then, the community wealth building and buzz around the Preston Model has kicked on with Brown able to bring certain policies through.

The Preston Model, as a phrase, was given by the national media to the strategy taken by the city council and also referred to as a shorthand by other councils for keeping money within local communities.

It has been criticised for becoming protectionism but the city council say the Model always ensures procurement rules are followed and taxpayers are getting best value for money by council-spending decisions.

You can read a piece Cllr Brown penned for Blog Preston back in January 2017 about his community wealth building initiative.

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What is the Open Society Foundation?

Founded and chaired by George Soros, the foundation has spent $32billion in 100 countries over the world.

The society’s aim is to ‘build vibrant and tolerant societies whose governments are accountable and open to the participation of all people’.

Read more: Preston council tax bills to rise and latest on city council’s finances

What do you think about investing in co-operative businesses? What do you think of The Preston Model? Let us know in the comments below

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