Community Wealth Building: Belfast’s Missed Opportunity
In this special long read article, guest contributor Mary McManus looks at how the Community Wealth Building model has been used in the fight against worsening levels of poverty across the UK.
In 2018, I first heard about the, ‘Preston Model’. Since 2013, Preston County Council had taken a different approach to local economic development called Community Wealth Building (CWB). This had resulted in Preston moving out of the top 20% most deprived cities in the UK in 2015 and being named the most improved city in the UK in the Good Growth for Cities Index in 2018. They had focused on paying the real living wage and using collaborative procurement to provide opportunities for local SMEs and co-operatives.
In 2018, I also discovered that Belfast City Council had considered CWB before Preston, but the ‘Belfast Model’ had never manifested. Working in a Welfare Rights advice centre, I had been witnessing worsening levels of poverty since the financial crash in 2008. It was apparent that we needed a systemic solution to poverty. CWB seemed to offer that systemic solution. In 2020, with poverty levels escalating due to a global pandemic, I undertook some research, via my Masters dissertation, to understand the historic and current reasons as to why Belfast had not adopted CWB, opting instead for an Inclusive Growth Strategy. The focus of the research was to look at how local economic strategy could systemically reduce poverty and income inequality, and whether or not Belfast City Council had chosen the most effective strategy in this regard. As Preston did not have a written CWB strategy document, I compared Belfast’s Inclusive Growth strategy with the recently launched (May 2020) North Ayrshire’s CWB strategy.
What is Community Wealth Building?
The Centre for Local Economic Strategy (CLES) define CWB as,
“a new people-centered approach to local economic development, which redirects wealth back into the local economy, and places control and benefits into the hands of local people.”
It is a transformative approach that looks at the wealth that is already in a place and ensures that it is more equally distributed and owned from the outset by design. The New Economics Foundation simply call the approach, “Plugging the Leaks”; the economy is a bucket where money flows in through grants, inward investment, social security, export revenue etc and leaks are plugged to stop money leaving, ensuring it has a beneficial multiplier effect as it is spend and re-spent in an area. There are five practical pillars for implementing Community Wealth Building.
An important feature of the approach is, “anchor institutions” which are large public or not-for-profit or public organisations such as local authorities, health trusts and universities that employ large numbers of people and have significant purchasing power. They are called anchors as they are rooted in a particular place, and unlike ‘foreign direct investment’ or ‘footloose capital’, are not going anywhere.
Community Wealth Building in Action – The Preston Model
Preston, like Belfast, has suffered from deindustrialisation and disinvestment. Following the collapse of private finance for a major regeneration project in 2013, the Labour-led Preston City Council decided to try out an approach that was being applied in Cleveland, Ohio. The council collaborated with five anchor institutions based in Preston, including the county council, two colleges, the University, the police and the local housing association to establish where their procurement spend was going. They identified that out of a combined spend of £750 million, in excess of £458 million was leaving the Lancashire economy. They formed a Procurement Practitioner’s group and opened up the contracts to enable more local and SME businesses to bid for them. This resulted in an extra £274 million circulating in their local economy increasing its economic resilience by being spent with local suppliers, all of which had a positive multiplier effect on local jobs, wellbeing, health, and economic growth.
Key outcomes included:
- 4,000 new real living wage jobs created;
- A reduction in unemployment from 6.5% in 2014 to 3.1% in 2017;
- A 10% rise in 16-24 year olds in Preston receiving an NVQ Level 3 qualification between 2013 and 2014;
- Preston moved out of top 20% most deprived local authority areas in England.
Preston, in partnership with Wirral and Liverpool Councils, hopes to establish the North West Mutual Bank. They are supporting the development of ten new cooperatives and have invested £100 million of their local government pension fund in student accommodation and refurbishing a hotel and office space. Not surprisingly, they have now inspired numerous places to adopt CWB, including North Ayrshire, Birmingham, Newham in London and the Wirrel. Significantly, the Scottish Government has committed to exploring the potential for CWB as an approach to delivering inclusive growth across Scotland, with six key projects in Ayrshire, Clackmannanshire, the Western Isles, the South of Scotland, Glasgow City Region and Tay Cities Deal.
2012, Belfast City Council commissions Community Wealth Building research.
In 2012, Belfast City Council commissioned CLES to undertake research into the impact of Belfast anchor institutions which found that they play a key role in Belfast’s development and have a significant economic impact including:
- Employing 62,900 employees, 33% of the overall workforce in Belfast;
- A combined annual budget of £1.43 billion;
- Their local economic impact was estimated to be £3 billion annually;
- Belfast anchors own 40% of the land in Belfast with Belfast Harbour and Belfast City Council owning 37% of this land.
The Impact of Belfast Anchor Institutions report recommended that anchor institutions work together to develop a Belfast Anchor Charter to be taken forward through the Community Planning process with the council taking a convening role. All the stakeholders were
“extremely positive about working with the Council and viewed Community Planning as a great opportunity for fully utilising civic leadership and moving the city forward.”
In The Belfast Agenda, Belfast City Council committed to leveraging the economic power of Belfast’s anchor institutions and city partners through a programme of work that they “will deliver and design” stressing “the collective procurement power of the public sector to deliver on wider social outcomes.”
In a 2013 article for AgendaNI, Neil McInroy, CLES CEO, recommended that Belfast City Council lead on the public, social and commercial sectors collaborating, “like mad” to create a city resilient to economic shocks. Very prescient words in the middle of a global pandemic and its associated social and economic shocks. Regrettably however, this work on collective procurement did not take place. Other factors were consuming the council’s attention at this time namely Flag Protests and planning for RPA, the biggest reform to local government in 40 years which may have hampered progress. However, the current barriers to CWB which I will explore later no doubt had a bearing.
Present Day – Inclusive Growth vs Community Wealth Building
In 2020, Belfast City Council opted for Inclusive Growth as their preferred economic development approach, while North Ayrshire Council declared themselves Scotland’s first CWB council. I compared these strategies to see which had the most potential to systemically tackle poverty. Inclusive Growth can be summed up as traditional economic development with a few tweaks; it is a way of slightly improving the current system without acknowledging that it is the cause of poverty and inequality. It does not question ownership of economic assets or where the wealth is flowing.
The All Party Parliamentary Group on Limits to Growth categorised the pursuit of growth as, “at best short-sighted and at worst disastrous both for societal wellbeing and for long-term sustainability.” Joe Cullinane, Leader of North Ayrshire Council, summed up Inclusive Growth saying,
“For me it is small interventions to target specific wee problems. That’s not the big transformational approach to the economy we require.”
Their CWB strategy’s aim is to have a, ‘radical and bold approach’ with fairness being central to their “aims of tackling poverty and inequality”. Beginning less than three years ago, the strategy is ambitious with actions planned under all five CWB pillars. Since its launch on Facebook during lockdown in May 2020, they have launched their Anchor Network with six local anchors signed up and a local Green New Deal. Their Community Planning partners make up their CWB Commission and they have appointed an international Expert Advisory Panel to inform and challenge their delivery of the strategy.
Belfast City Council’s Inclusive Growth strategy acknowledges the problem of poverty in the city and commits to doing all it can to eradicate it. However, the strategy is very much a business as usual strategy which fails to acknowledge that the economic growth it continues to pursue is the cause of the poverty and deprivation it seeks to alleviate. It is weak on ambition proposing action under just two of the five pillars of Community Wealth Building, those being Progressive Procurement and Fair Employment and Just Labour Markets. Even then, it is predominantly action the council will take rather than collaborative action. It references the 2013, Impact of Belfast Anchor Institutions report stating, “The potential for collaboration across local anchor institutions around inclusive growth is huge.” Belfast City Council have been aware of this potential for over seven years and yet only commit to “identifying” two anchor institutions in year two, “willing to develop a baseline and develop their own social value procurement framework.”
Regarding collaboration, they commit to developing,
“An Inclusive Growth City Charter to encourage organisations across Belfast to ensure their business practices as employers, procurers and in the delivery of their services are channelled in the direction of more inclusive growth across Belfast.”
The language used in the strategy has no sense of action by council animating it. This lack of action is underscored by the fact that it commits to the establishment of plans, charters, frameworks and toolkits creating an impression of bureaucratic processes rather than action. North Ayrshire’s strategy demonstrates what it looks like when a local authority is serious about eliminating poverty. Their CWB strategy is a clear, easy to read, bold, radical and ambitious strategy that is not afraid to commit to action. The council’s record of action against the strategy since they launched it, demonstrates the sincerity of their intention.
What are the barriers to Belfast City Council adopting Community Wealth Building?
Using interviews with Belfast City Council staff and councillors, the leaders of Preston and North Ayrshire, and other key people in the CWB movement as well as Belfast council minutes, my research found evidence of what could be termed as ‘neoliberal groupthink’ within the section levels of decision-making of Belfast City Council: that is, firmly wedded to a traditional orthodox, economic growth approach based on attracting FDI and enhancing business competitiveness over effectively using, growing and distributing the wealth of the public sector. Cllr Brown, leader of Preston Council, has stated that Preston was blessed due to the number of anchor institutions based there but in 2013, they were only half as blessed as Belfast as they had £750million between them and Belfast had £1.4billion. Fast forward to today and Queen University Belfast and BHSCT (the largest NHS Trust in the UK) alone have a combined spend of £2 billon. Neil McInroy, CLES CEO said that with regard to the public sector, we have a Rolls Royce and we are treating it like a bicycle. With some notable exceptions, I also found evidence of a failure to understand the transformative nature of Community Wealth Building.
I was looking for ways to deal with poverty but what my research found was poverty of ambition to eradicate poverty. I did not find evidence of outrage in Belfast City Council at the appearance of and proliferation of food banks in the city and the persistently high levels of poverty in the city that might have brought forth the leadership and urgency required for a change in economic strategy. North Ayrshire and Preston Councils are very clear that their economic strategies are about tackling poverty and inequality and they are taking a bold and pioneering approach to do just that. Their leaders are both ‘cathedral thinkers’ in that they have the vison and commitment to systemically transform the economy not just for the benefit of people now but also for future generations. Most importantly they are aware that the economy is a system and as such can be changed.
My research found a “lowest common denominator” approach to local policy making where due to power sharing, only ‘safe’ and ‘conservative’ policies such as Inclusive Growth have any chance of getting consensus between all the parties. At the same time, ‘bread and butter’ social economic issues such as poverty are continually usurped by questions of identity and the constitutional status of Northern Ireland that dominate electoral politics here. A lack of a “common purpose” and “shared vision” were also impediments. What is striking about Preston and North Ayrshire Councils is their strong sense of purpose and political vision to tackling poverty and socio-economic issues. In Belfast, I found a strong and deeply embedded neoliberal corporate culture that was difficult for more progressive councillors and progressive policy proposals to influence.
Finally, I found that, effective collaboration through coordinated procurement strategies to tackle poverty by the City’s Community Planning Partners was hampered by departmental silo working and a lack of horizontal working. In places across the water, Community Planning partners work together out of necessity due to a lack of funds and the objective of tackling and reducing poverty and disadvantage. Locally, the Community Planning process was (yet another) missed opportunity with the partners failing to appreciate how a collaborative approach to progressive procurement could result in multiple improvements to lives which in turn would help themselves in terms of their own strategic objectives. For example, less people in poverty would mean less health inequalities and less demand on health services.
Conclusions and reasons to be cheerful
The pandemic has caused another major economic shock. Preston is demonstrating resilience by maintaining a strong position in the Good Growth for Cities Index. This year, it came 16th out of 42 cities; Belfast came 34th. While the pandemic is having a catastrophic impact on private businesses and global markets, public sector services continue to function. Enhancing and supporting the structure of the Northern Ireland economy which is dominated by SMEs, and linking them more effectively together and to the public sector’s large anchor institutions, is more resilient than a local economy that is dependent on FDI as Preston is demonstrating with a furlough level of 6.9% compared to the UK average of 12.5%. The pandemic has exposed the cracks and fallacies of traditional economic development with the majority of people wanting to ‘build back better’ for a greener and more just system that is kinder to people and planet. There is now a greater appetite for fairer alternatives. CWB offers that alternative. On behalf of its citizens, Belfast City Council now needs to be bold and ambitious and embrace CWB. Preston, North Ayrshire and other places have provided them with a blueprint of how to begin this journey. Since completing my research, the Northern Ireland Minister for Communities has made a clear commitment to CWB, stating,
“We need to develop a new and ambitious model that gives economic control to local people with collective ownership. Community Wealth Building can play a key role in this agenda with a focus on: creating a more just and fair labour market; and creating a more inclusive economy with more democratic and social forms of ownership such as community banks, cooperatives, social enterprises and community interests.”
Queen’s University is actively exploring the approach as part of its new corporate strategy based around the United Nation’s Sustainable Development Goals (SGDs). With another major Belfast anchor exploring the approach, a commitment at the NI Assembly level and a growing awareness of alternatives, Belfast City Council will find it increasingly difficult to ignore progressive alternatives and pursue their business as usual approach. All the signs are that CWB is an idea whose time has come.
Looking at Belfast through a CWB lens, it has a wealth problem rather than a poverty problem. Consider for a moment the purchasing power and assets of some of the anchor institutions in Belfast, the council, Queen’s University, Ulster University, Belfast Met, the Belfast Health and Social Care Trust, Belfast Harbour Commission, the the PSNI. Imagine how transformative it would be if they all paid the living wage, created apprenticeships for the long-term unemployed, procured in a way that supports SMEs, cooperatives and the local communities in which they are based, invested in local projects, supported a mutual bank and allowed their assets to be used as part of the commons.
It is time for all the anchors in Belfast to embrace CWB with Belfast City Council taking a convening role as recommended in the 2013 Impact of Belfast Anchor Institutions report.