Labour to help councils keep money flowing in local economies

Labour will help local councils to bring services back in house, set up new energy companies and develop local economies, using a new team of experts, it will announce tomorrow.

In a speech on Thursday, Shadow Chancellor John McDonnell will praise the ground-breaking work of Preston City Council, which is reported to have returned almost £200 million to the local economy and supported more than 1,600 jobs by using the town’s anchor institutions and local government contracts to keep money in the local economy and develop worker-owned cooperatives.

Speaking at a conference in the Lancashire town, he will announce that Labour’s new Community Wealth Building Unit will borrow from the Preston model and share other innovations to help Labour councils boost their economies.

The Unit will bring together councillors, unions, think tanks, and independent experts with experience of delivering frontline change to provide councils with knowledge, advice, and practical support in adopting creative methods to secure and provide vital services and stimulate sustainable economic development for communities in the face of austerity.

John McDonnell MP, Labour’s Shadow Chancellor, will say: 

“Tory austerity has blighted our communities and forced councils to cut and privatise many public services that we all rely on.

“The next Labour government will end austerity and properly fund local authorities, instead of cutting back and passing the buck like the Conservatives are doing. But we cannot afford to wait until we are in power nationally.

“There are many creative solutions being used already, like in Preston, and we need to spread this inspiring work around other Labour councils now, so we can bring services back in house, stimulate the economy and provide decent jobs, extend ownership and control, and strengthen local democracy.

“By working together to share these principles where Labour is already in power locally, we can sow the seeds of a country that works for the many, not the few.”

Ends 

Notes to editors

• ·         Local government have borne the brunt of Tory austerity. The Local Government Association estimate that local services are facing a £5.8 billion funding gap in 2019/20, as well as a £1.3 billion pressure to stabilise the adult social care provider market today.https://www.local.gov.uk/sites/default/files/documents/The%202018-19%20Provisional%20Local%20Government%20Finance%20Settlement%20-%20response.pdf  

• ·         Once in government, Labour have committed to bringing public services under public control at both national and local level, and to using the £200 billion national and local government spends in the private sector to upgrade our economy, create good local jobs and reduce inequality.

• ·         Preston council have adopted a local economic development strategy that includes:

-      Becoming the first Living Wage employer in the North of England (in 2012)

-      Setting up a credit union to compete with payday loans companies

-      Persuading six large local public bodies (also known as “anchor institutions”) to commit to buying goods or services locally wherever possible

-      Helping to set up worker cooperatives to provide goods and services to public bodies.

-      In 2013, the six local public bodies spent £38m in Preston and £292m in all of Lancashire. By 2017 these had increased to £111m and £486m respectively, despite an overall reduction in the council’s budget.  https://www.theguardian.com/commentisfree/2018/jan/31/preston-hit-rock-bottom-took-back-control

• ·         Those advising the Community Wealth Building Unit include:

-      The Democracy Collaborative is an American-based organisation engaged in practical and intellectual work to connect community wealth building to system economic transformation, including more democratised forms of ownership, ecological sustainability, and community renewal.

-      Councillor Matthew Brown, Preston City Council, is one of the leading figures behind the Preston model.

-      Unison is one of the UK’s largest unions, representing 1.3m members employed in providing public services, including at the local level.The Association of Public Service Excellence (APSE) is a not for profit local government body working with councils across the UK to promote excellence in local public service delivery. APSE will be providing independent advice to the Community Wealth Building Unit.

-      The Centre for Local Economic Strategies (CLES) is a think and do tank dedicated to social justice, good local economies, and effective public services. CLES will be providing independent advice to develop the work of the unit. CLES’ advice is informed by a 10 year local wealth building programme, which has included collaboration within a number of local areas and agencies across the UK – including Preston - and internationally.

-      The Cooperative Party is the political party of the Cooperative movement, which promotes democratic, public ownership.

-      The Centre for Urban Research on Austerity is based at DeMontfort University in Leicester. It looks at government, community and social movement responses to austerity across the world, and facilitates learning and knowledge exchange to develop alternatives.