Harnessing Local Wealth

The fact that Haringey Council is looking at how it can roll out a community wealth building program similar to trailblazing Lancashire councils like Preston and Manchester and closer to home Islington is a major step in the right direction. Community wealth building is just one of the many ways we can dismantle the structures which entrench inequality. That’s why it’s been embraced by the current Labour leadership and why the Labour party now has a community wealth building unit.

CWB demands we rethink the local economy, encouraging, promoting and nurturing our local wealth builders over and above the predatory wealth extractors who have for the past few decades been given free reign in the name of regeneration. It’s not rocket science — if you build homes which are unaffordable to local people you push those people out, if you rent retail space to big brands you link local employment opportunities to investors and shareholders who owe your community nothing. Community wealth building is about ensuring that local wealth is recognised and recycled locally. It is about ensuring that those who actually live in an area become the drivers of the local economy and benefit most from it too. It is about increasing democratic expression, input and control. It is about making life easier by improving local life and opportunities, empowering communities, building neighbourhoods, transforming health outcomes. These are the reasons why it is more than just community wealth building for Haringey but is community health building, in every sense.

Keep it Local

In practical terms CWB means that someone like Rehana, a skilled seamstress who is studying part-time for a degree, with three kids, one with a learning disability, does not need to look outside of the Borough for work because the program is creating local jobs. In Haringey there are thousands of people just like her — male/female, working class/middle class, WASP/BAME — where being able to take a short bus journey or walk to work is as important as having close-to-home childcare provision. CWB is about creating sustainable, locally rooted economies. Don’t let anyone try and convince you otherwise. The gravest mistake we could make as a Borough would be to dilute this core local element from the start. We can say that we are part of a wider ecosystem called London and yes we are, but that doesn’t mean there isn’t a clearly defined borough with a council to which citizens pay Council Tax and to whom they look to for support when in need. The borough boundaries help to easily define what counts as local. One of the elements of CWB is the idea that “anchor institutions”, rooted in place, such as the Council itself, should direct procurement spend towards local businesses in return requesting social value such as paying the living wage, employing the “hard to reach”, offering apprenticeships etc. If we start off by including neighbouring boroughs in our definition of local how is that fulfilling the CWB promise? Why would a business in Enfield or Waltham Forest be motivated to create more employment and/or apprenticeship opportunities for Haringey residents? Why would we as a Council boost employment opportunities which undermine a fundamental part of CWB — accessibility? Also, what is important is that businesses that become part of the local CWB system feed back into that system, procuring and employing local themselves, recycling economic and social value to those the Council represents. That does not mean we can’t have two community wealth building programmes running at the same time. A local one and a regional one. The regional programme would look at how resources could be pooled (and risk shared) across borough borders — such as investing pension funds — to invest in projects which could benefit residents in multiple boroughs — such as establishing a bank whose aim would be to loan to local SMEs. For now, it should be baby steps of course, looking at nurturing and protecting the SMEs we already have and creating the foundations for more to flourish.

I have heard it argued that Haringey does not have the number of anchor institutions that cities like Preston or Manchester have. This is a false comparison. There are community wealth building programs appearing all over the country and many more in the US where the idea was born (out of the Civil Rights Movement) each city, each region, creating its own version reflecting the needs, aspirations and economies of each place. In terms of anchor institutions Haringey has the Local Authority, Spurs Football Club, College of North East London. It may not have a hospital but it has many organs of the NHS, spending NHS money. Similarly, although on a much smaller scale, there is also the Met Police. Local schools, definitely anchor institutions, have budgets to spend too and the purpose of a CWB program is to ensure that as much of their procurement spend is directed locally. However, CWB is not just about the anchored institutions spending into the local supply chain, it is also about transforming the structures of ownership and democratic control.

Cooperatives and Community Land Trusts

Community Wealth Building is about developing and expanding the local supply chain. A vast anchor institution such as the local authority has the ability to use procurement to leverage and shape the economy by choosing local employers and by helping create new business where gaps in that chain are found. The cooperative model is almost purpose built for community wealth building. Cooperatives are rooted in place by the very fact that they are owned by local workers. Cooperative workers are not going to vote to relocate to another town because cooperatives are owned by the workers themselves, and the business is able to adapt to the needs of its employees and to wider economic changes for the same reason. There are many examples of how cooperatives have managed to be more resilient following the post-2008 crash because the employees (who are also mostly co-owners) are able to adapt and absorb major economic shocks by agreeing to temporary wage cuts, for example, rather than going into administration. Where gaps in the local supply chain are identified the Local Authority needs to be nurturing co-ops to step in and fill that gap, slowly but surely helping build a network of local co-ops. Haringey can and should play the role of facilitator and hub with resources available to share information,finance, expertise and advice. Europe’s most successful co-ops, Italy’s Fedagri and Spain’s Mondragon, are co-ops of co-ops, central cooperative hubs which act as support to hundreds of co-op SMEs. The hub is able to provide business support — knowledge, financial and moral — acting as a foundation from which businesses can flourish. In Italy and Spain these worker-led and worker-owned powerhouses have multi-billion dollar annual turnovers and have proven to be community lifesavers throughout the last decade of austerity.

Haringey should ensure that the people it has already tasked with rolling out the CWB program are immersed in this way of working by ensuring that they get time to learn from the architects of successful cooperatives here in the UK and in Europe. Yes, instead of paying thousands on consultants we should send our officers on trips to Italy and Spain. I’m sure they won’t argue with that and the knowledge they would gain would be invaluable.

Community Land Trusts are about ensuring that the decisions over how land (especially for housing) is used is devolved to those who are going to benefit from it, that is the residents of those homes. Again, just like community wealth building and cooperatives the Labour leadership is wholeheartedly promoting and supporting these initiatives. CLTs have entered into the local market around the country and ensured local assets stay in local hands benefitting local people. The unequal accumulation of wealth is at its most stark in the unequal accumulation of land. By taking land off the market CLTs are able to protect affordability of homes in an area. CLTs also play an important role in counteracting the forces of gentrification. By revolving around housing owned by the community and delivered in the interests of the community CLTs should form an integral part of any community wealth building program.

Building a local ecosystem

Looking into the not-too-distant-future Haringey Council, if it helps facilitate a healthy CWB program, will find itself as a co-producer in a local economic/social ecosystem with other community wealth builders. Some of them are already here. The Latin Village market at Wards Corner, the Peacock Industrial Estate and St Ann’s Redevelopment Trust, Haringey is already rich in community-based business and activism passionately committed to building the community wealth from the foundations they themselves have helped develop. It is not just desirable but an absolute necessity that any CWB program has them plugged in from the start. How can we possibly say we are community wealth building champions if we ignore the community wealth builders we already have? The answer is simple, we can’t. Sometimes I look at the contortions we find ourselves in as a Borough, in part because of legacy pledges and obligations, in part due to timidity but also in part due to legacy thinking. We may be tied to a deal with a developer for the Wards Corner site but there is a Community Plan which is frankly far superior to the developer’s plan when it comes to local priorities, the local economy and social fabric, and we should be taking ownership of the Plan in partnership with the Latin Village and presenting it to the developer as the way forward. This approach in no way undermines our previous agreements since it is showing the way forward for a profitable partnership for all parties whilst ensuring community cohesion and bringing ever more social value. The high street is transforming as the economic model of the last four decades is coming apart. We should be in the vanguard of what is coming not hanging on to a dying formula. Barking and Dagenham is investing heavily in the “participatory economy”, a groundbreaking project that puts residents and local businesses at the heart of a social-centred and local-focused economic micro-revolution. It is time to re-think the high street and that is where we should be focusing as we develop our own community wealth building program.

This will involve re-thinking how we work with local wealth builders. There should be regular meetings and hothouse sessions with local creators and providers — Peacock, StART, Latin Village of course — but also the numerous social enterprises, many of which fly under our procurement radar. We need to map our local assets, just as the redesign of our Adult Services must do, locating all our local strengths, our assets, and discussing with them what role they can play in the new local ecosystem. We need to have serious discussions about how we can use our 1.3billion pension fund for the good of the local community, look into ways in which we can develop a local job guarantee for those in search of work, explore the possibilities of a municipal Green New Deal connecting the work of the community wealth building team with the work of the Highways, Environment and Health teams, looking at how pursuing low-traffic neighbourhoods can play an integral part in improving local health outcomes in the long-term because community wealth building is also community health building and to be successful cannot progress in a silo but must be part of an ecosystem which already exists in our Borough and needs urgent attention.