Preston used ‘Corbynomics’ to change its fortune. Now other cities are doing the same

Blue skies over Preston bus station. Image: Ilike/Flickr/creative commons.

I am sure they are an estimable bunch, but Preston Council are not the locomotive of the UK economy. We Conservatives know that it is only a strong private sector economy that can pay for superb public services.

When Boris Johnson scoffed at the idea of Preston being an example of economic success, at a fringe meeting during the most recent Conservative Party conference, he couldn’t have guessed that barely a month later PwC and Demos would independently assess Preston as being the most improved city in the UK in 2018.

Among other improvements, according to their report, “Preston has experienced a large reduction in its unemployment rate, measured at 3.1 per cent in 2017 compared to 6.5 per cent in 2014.”

In Preston, several factors fell onto place at once, leading to positive change that was part planned, part felicitous. Inspired by the Cleveland model, the council visited local “anchor institutions” – institutions that are rooted in Preston, such as the housing association, the university and so on – and persuaded them to spend more money locally. The results were spectacular: local procurement increased by £74m in under five years.

Then, inspired by Mondragon – an international business organisation established by a group of cooperatives, which began soon after the Spanish Civil War – the council set up a framework organisation called the Preston Cooperative Development Network (PCDN), of which I am the Chair. The PCDN encourages business people to create worker-owned co-operatives, and helps them to network. The Preston Model is work in progress, yet the council has achieved a lot in relatively little time. Here are four of the factors which led to its success.

1. Adversity

The collapse of major retail investment into Preston soon after the financial crash of 2008 left the city with nothing: no money, no faith in a failing system and no alternative regeneration scheme. New ideas sometimes emerge out of necessity, and this was one of them.

2. Leadership

At the same time, Preston City Council had the good fortune to enjoy the leadership of an energetic councillor, Matthew Brown. Brown has been a councillor since 2002. He then became Cabinet Member for Social Justice, Inclusion, and Policy, and now is leader of the council.

Frustrated by the dire economic and social prospects for Preston, Brown set about scouring the world for alternative solutions for Preston, while simultaneously improving the local area. For example, it’s because of Brown that Preston City Council was one of the first councils in the UK to introduce the living wage.

3. Corbyn’s Labour party

Councillor Brown’s ideas might never have seen the light of day without the interest and ultimately the backing of Corbyn’s Labour party. In particular, Shadow Chancellor John McDonnell took a proactive interest, and was instrumental in setting up a Labour Party Community Wealth Building Unit, inspired by the Preston Model.

This has helped to develop ideas – such as generating and retaining local wealth through local procurement and employee ownership schemes – which have the potential to become Labour Party policy.

4. Research, advice and consultation

The council was forward thinking and creative in its approach, and so agreed to fund the Centre for Local Economic Strategy (CLES) and the University of Central Lancashire (UCLan) to advise councillors and council officers on ways of executing their ideas. CLES and UCLan provided both practical advice and reports to support the council’s Community Wealth Building project.

Can it work elsewhere?

According to Councillor Matthew Brown, aspects of the Preston Model are already being applied elsewhere in the UK, partly as a result of media attention and partly as a Labour Party strategy for about 50 local authorities currently governed by Labour. After Preston, perhaps the most advanced in this kind of strategy is Birmingham.

At least eight London councils are actively pursuing some of the ideas arising from the Preston model, and there has been interest from the National Assembly for Wales and the Scottish Government.


There is often a certain scepticism about economic and social change, and the case of the Preston Model is no exception. There is talk of protectionism, a fear that perhaps the economy will become less efficient and concerns that localism will collapse, when faced with a need to expand beyond the borders of Preston.

Sometimes, people ask me what it is about Preston itself that accounts for its success (and possibly, therefore, for the difficulty of exporting the model elsewhere). This is the same question that is asked of the Mondragon co-operatives in the Basque Country, since the Mondragon experience has proven difficult to export to other countries.

But change is in the air, as popular economists such as Yanis Varoufakis and Thomas Piketty have forewarned. Journalists such as Paul Mason talk of a “post-capitalist” future. Meanwhile, academics Pickett and Wilkinson critique the social value of growth and Kate Raworth’s “doughnut economics” suggests that there’s a safe and just space for humanity, where no one falls short of life’s essentials and the ecology of the planet is not compromised by rampant consumerism.

The desire for change is part of the energy of the Preston Model. It’s not just about local money. It’s about participating in democracy as cooperative structures demand, it’s about citizenship and pride of place. Anchor institutions opt to spend more locally, in part because procurement officers and the institutions they represent feel all these things. And these things don’t belong to Preston alone.

The Conversation

Julian Manley, Research Fellow, University of Central Lancashire.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 
 
 
 

“Without rent control we can’t hope to solve London’s housing crisis”

You BET! Oh GOD. Image: Getty.

Today, the mayor of London called for new powers to introduce rent controls in London. With ever increasing rents swallowing more of people’s income and driving poverty, the free market has clearly failed to provide affordable homes for Londoners. 

Created in 1988, the modern private rented sector was designed primarily to attract investment, with the balance of power weighted almost entirely in landlords’ favour. As social housing stock has been eroded, with more than 1 million fewer social rented homes today compared to 1980, and as the financialisation of homes has driven up house prices, more and more people are getting trapped private renting. In 1990 just 11 per cent of households in London rented privately, but by 2017 this figure had grown to 27 per cent; it is also home to an increasing number of families and older people. 

When I first moved to London, I spent years spending well over 50 per cent of my income on rent. Even without any dependent to support, after essentials my disposable income was vanishingly small. London has the highest rent to income ratio of any region, and the highest proportion of households spending over a third of their income on rent. High rents limit people’s lives, and in London this has become a major driver of poverty and inequality. In the three years leading up to 2015-16, 960,000 private renters were living in poverty, and over half of children growing up in private rented housing are living in poverty.

So carefully designed rent controls therefore have the potential to reduce poverty and may also contribute over time to the reduction of the housing benefit bill (although any housing bill reductions have to come after an expansion of the system, which has been subject to brutal cuts over the last decade). Rent controls may also support London’s employers, two-thirds of whom are struggling to recruit entry-level staff because of the shortage of affordable homes. 

It’s obvious that London rents are far too high, and now an increasing number of voices are calling for rent controls as part of the solution: 68 per cent of Londoners are in favour, and a growing renters’ movement has emerged. Groups like the London Renters Union have already secured a massive victory in the outlawing of section 21 ‘no fault’ evictions. But without rent control, landlords can still unfairly get rid of tenants by jacking up rents.


At the New Economics Foundation we’ve been working with the Mayor of London and the Greater London Authority to research what kind of rent control would work in London. Rent controls are often polarising in the UK but are commonplace elsewhere. New York controls rents on many properties, and Berlin has just introduced a five year “rental lid”, with the mayor citing a desire to not become “like London” as a motivation for the policy. 

A rent control that helps to solve London’s housing crisis would need to meet several criteria. Since rents have risen three times faster than average wages since 2010, rent control should initially brings rents down. Our research found that a 1 per cent reduction in rents for four years could lead to 20 per cent cheaper rents compared to where they would be otherwise. London also needs a rent control both within and between tenancies because otherwise landlords can just reset rents when tenancies end.

Without rent control we can’t hope to solve London’s housing crisis – but it’s not without risk. Decreases in landlord profits could encourage current landlords to exit the sector and discourage new ones from entering it. And a sharp reduction in the supply of privately rented homes would severely reduce housing options for Londoners, whilst reducing incentives for landlords to maintain and improve their properties.

Rent controls should be introduced in a stepped way to minimise risks for tenants. And we need more information on landlords, rents, and their business models in order to design a rent control which avoids unintended consequences.

Rent controls are also not a silver bullet. They need to be part of a package of solutions to London’s housing affordability crisis, including a large scale increase in social housebuilding and an improvement in housing benefit. However, private renting will be part of London’s housing system for some time to come, and the scale of the affordability crisis in London means that the question of rent controls is no longer “if”, but increasingly “how”. 

Joe Beswick is head of housing & land at the New Economics Foundation.