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30 September 2021

Community Wealth Building should be at the heart of levelling up

The chief executive of the Centre for Local Economic Strategies on what a real levelling up strategy should look like

By Sarah Longlands

The government’s approach to levelling up to date has been ruthlessly electoral.  Targeting blue seats in the north and tapping into the sense of injustice felt by communities who have not just been left behind, but kept behind.  The Levelling up White Paper promised in the Autumn will no doubt provide some rationalization in hindsight with additional funds for ‘community power’, and it will be interesting to see if Andy Burnham’s call for a Greater Manchester levelling up deal at the Labour Party Conference will be answered by Michael Gove in Manchester next week.

Michael Gove says that he’s serious about levelling up. He’s even changed the name of the department to prove its commitment, but being serious about levelling up will require the full machinery of government, including the Treasury, not just a rebrand of the Ministry of Housing, Communities and Local Government (now the Department for Levelling Up, Housing and Communities, following Robert Jenrick’s departure in Boris Johnson’s reshuffle). It would require ministers on both sides of the house to move out of their economic comfort zone and engage with some difficult questions about how wealth and power really operates in left behind communities and who is really reaping the rewards of extractive ownership, spiralling house prices and low wage economies.  It will also require a new and much improved relationship with combined and local authorities who can deliver the agenda on the ground.

What has been proposed to date by the government is disappointingly orthodox, lacking in innovation and constrained by an almost inherent presumption that the centre knows best. As it currently stands, it will do little to challenge and reverse the deeply unbalanced nature of wealth in the UK.  

As the Cente for Local Economic Strategies has long argued, real economic change comes not from the rhetoric of Whitehall, but from the activism and ideas of local councils, businesses and communities across the UK. This is about building better economies from the inside, helping people to get level with an economic system which has delivered little but precarity, low wages, increasing poverty and an uncertain future for many. In the UK, our core economic problem is not a lack of wealth but that the wealth is unfairly distributed. Earlier this year, the Resolution Foundation found that almost a quarter of all household wealth in the UK is held by the richest 1 per cent of the population.

Community wealth building is about bringing wealth back home to local economies so that it can be put to good use to create generative economies with a diverse range of businesses and ownership. This growing movement works by unlocking the potential of economic assets and strengths that already exist in our communities. It’s about ensuring that new public and private investment leaves nothing to chance and instead works hard to grow local enterprises that share the wealth through employment, training and business support.

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Take the government’s proposals for the relocation of the Treasury’s economic campus to Darlington. A community wealth building approach to procurement and employment would maximise the economic impact of this move by – for example – using it as an opportunity to stimulate local supply chains, thereby enabling local businesses to tender for the supply of services and products. Similarly, by consciously working with partners in local further and higher education organisations, the local combined authority could develop skills and training opportunities for people in the community who could benefit most from the new employment opportunities that may be created.   

The practice of local wealth building could also be used to strengthen the economic impact of the Levelling Up Fund, for example by actively encouraging applicants to draw on the now widespread good practice of progressive procurement and commissioning already being used by councils and their partners up and down the country, from Belfast, Glasgow, Stockton and Manchester down to the West Midlands, Cardiff and Islington. Working collaboratively with applicants to consider how proposals deliver real value for public money by investing in economic and social outcomes would have a concrete impact on people’s lives and in their wallet and not just on shop fronts. 

And it could be used to transform the government’s approach to devolution. To date, the “deals” agreed between central and local government have been more akin to delegation than a real devolution of either economic or political power. In reality, elected mayors have only had limited power to arrest the extraction of economic power from communities. But imagine the transformative power of a devolution settlement which went beyond the narrow confines of “economic growth” as the only indicator of success and freed places up from conventional economic priorities such as deregulation of planning and inward investment. A devolution settlement which put wellbeing and quality of life at the heart of our commitment to places and gave elected leaders the ability to flex their economic muscles differently could create good jobs, ensure a just transition and invest in local health and education. 

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An approach based on community wealth building principles would include enabling local and democratic forms of ownership, meaning that underused land and property assets were used productively to maximise local economic benefits – establishing alternative financial arrangements such as community enterprise, regional banks and worker co-operatives. It could also lead to the establishment of greater democratic participation through new models for deliberation such as citizens assemblies and juries, helping to broaden debate and strengthen local accountability.  

It seems the government is still attempting to ride high on the electoral successes of 2019 but it is becoming increasingly clear that they now need to come good on their promises to level up. For voters, this will mean experiencing a fairer share of the wealth and power in their community. Community wealth building provides a means to deliver this but, crucially, it is an approach that does not rely upon the good will of Whitehall. Instead, community wealth building arms local communities with the tools to get on with the job of building a better economic future for themselves. 

Sarah Longlands is chief executive of the Centre for Local Economic Strategies, a think tank developing progressive economic policy for local and regional authorities.