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Lessons Wealthy Britain Could Learn from Preston’s Worker-Centric Growth

Lessons Wealthy Britain Could Learn from Preston’s Worker-Centric Growth
Mon, 6/3/2019 - by Gabrielle Pickard-Whitehead

Preston – or "depreston," as my sister and her friends once named it when at university there many years ago, in reference to the town’s gloomy aura of economic and social depravity – is quickly becoming a beacon of hope in the U.K. amidst failing Tory-driven austerity.

Its streets lined with derelict shops fronted by Big Issue sellers and tatty posters advertising bygone events, anyone who has visited this northern English city on the banks of the River Ribble may wonder how Preston could possibly be an economic success story.

That’s because, unlike the pretentiousness and prestige of many of Britain’s wealthy boroughs unashamedly engaged in privatization, Preston’s financial success story is significantly more modest – but offers a commendable alternative to the financialization trends occurring elsewhere in the country.

In 2010, the Conservative-led coalition government introduced an austerity program, which then-Prime Minister David Cameron and his allies attempted to "sell" to the people of Britain as a necessary response to what they considered the Labour government’s mess caused by overspending.

“The truth is that the country was living beyond its means,” the former chancellor George Osborne told Parliament as he outlined his budget in 2010, adding: “Today, we have paid the debts of a failed past, and laid the foundations for a more prosperous future.”

A segment of the electorate was ultimately won over by the Tories, sold by their claims that unprecedented cuts to public services was mandatory – and that the whole country needed to “do the right thing” to reduce the government budget deficit. The Tories followed by celebrating a majority victory in the 2015 general election.

But in reality, austerity has crippled Britain where local councils, due to severe government cuts, now battle to exist on 60 percent less financing than they did in 2010, bearing the brunt of the seemingly endless crisis.

In keeping with Britain’s typical North verses South divide, the nation’s northern cities are especially feeling the pinch from the Treasurer’s decision to tighten the purse strings. Figures from the think tank IPPR North show that since 2009-10, total government spending in the North has fallen £6.3 billion, or about $8 billion – more than in any other region.

This contrasts to the South East and the South West, which has seen government spending rise by £3.2 billion ($4 billion) in the same period.

The Preston effect

Determined to offset the crippling affects of North-biased public spending cuts, the city of Preston decided to put its fate in its own hands.

In 2011, the Lancashire city had hit rock bottom with retailers, still struggling against the effects of the banking crash of 2008, pulling out of a huge shopping mall project that had been planned, which was described as the long-suffering city’s “lottery ticket.”

Painfully for Preston, in 2011, the council, unable to finance the scheme, rejected what would have been the city’s lifeline. But instead of sinking further into despair, local officials in Preston gambled with a new approach:

The council pumped funds into Preston-based businesses and encouraged the creation of cooperations owned and operated by workers.

What has been labelled by Labour leader Jeremy Corbyn as the "Preston model" involves the way in which Preston’s council, its anchor institutions and other partners are now working together to implement the principles of Community Wealth Building: giving local people the opportunity to take back control to ensure, as the Preston Council writes, that “the benefits of local growth are invested in their local areas, are used to support investment in productive economic activities and that people and their local institutions can work together on an agenda of shared benefit.”

With cafes selling food made from locally sourced ingredients and people in disadvantaged areas learning how to make their own healthy meals – and as local building companies compete for construction contracts by providing training to local people and by employing local tradesmen, not those brought in from afar – the Preston model seems to be having a noticeable impact on the city's social, economic and environmental makeup.

Preston’s vision of equality, hope and tenacity in the wake of ongoing government cuts and setbacks contrasts starkly to the exploits of Kensington and Chelsea, one of London’s and the country’s wealthiest boroughs.

Unlike deprived northern towns like Preston, which have been forced to soldier on amid intense budget cuts, this privileged London borough managed to build up £274 million ($346 million) in reserves.

Kensington and Chelsea’s advantaged economic status – seen at a time when much of the rest of the country, particularly the North, has been brought to its knees through ongoing austerity – may have stayed hidden if not for the Grenfell Tower fire in 2017. There, 72 people lost their lives after a fire engulfed the residential block in North Kensington, home to a much poorer guild of residents than their neighbors living in their multi-million-pound London pads.

With the disaster shocking the world, Kensington and Chelsea’s tendency to ‘look after’ their richest residents was propelled into the public domain. Reports emerged of the borough running a budget surplus, which, Labour councillors claimed, was used as a slush fund to bribe voters with a rebate close to elections.

Shaming the London borough further were reports of the Kensington and Chelsea council handing £100 back to residents paying the top rate of council tax in 2014.

In the aftermath of the Grenfell Tower disaster, the £100 tax rebate for the borough’s richest, which was described by the council as resulting from the council’s “careful management of its finances over the years, which has resulted in consistently delivering greater efficiencies while improving services,” was condemned and publicly referred to as “blood money.”

At the Labour Party Conference following the Grenfell Tower fire, Shadow Home Secretary Diane Abbot told delegates the residential block disaster was a “direct consequence” of “deregulation of fire standards and inspection, privatization and outsourcing.”

Catherine Man, who went to university in Preston and is a Senior Business Intelligence Solutions Developer with the National Health Service, spoke of the city's change in fortune, telling Occupy.com:

“During my time studying at the University of Central Lancashire in the 1990s, Preston seemed to be at the start of a period of much needed regeneration and redevelopment. The relatively new addition of a modern shopping center appeared to indicate that more investment was coming.

“To hear that the former town (now city) where I studied for my degree, which gave me such as solid base to build a future on, has embarked on such a strategy of growth to support the local population is very encouraging," she added.

“The idea of ‘local people for the local economy’ has worked well in other smaller sized towns where a proportionate number of small, locally run independent start-ups have been able to compete with mainstream chains.

“If the same model works for a city the size of Preston, it should become a prototype for other cities needing regeneration to follow in its footsteps – fitting for the home of a successful university.”

Last year, Preston was named the UK’s “most improved urban area.” It's a sign that the experiment in this northern working town to create an alternative economic model – one that prioritizes the financial and social welfare of residents rather than making the rich richer – could catch on more widely.

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