The five clear principles of community wealth-building | Rethinking Poverty

The five clear principles of community wealth-building

Posted on 26 Nov 2020   Categories: Blog, Cross-posts, New economic models, Community Wealth Building, The place we want Related Tags:  

by The Alternative UK


As we noted in our Editorial last week, the Biden presidency (assuming it kicks off eventually by Jan 30th) may have a worrying tendency to top-down policy direction. Which would be a shame, because the forces towards bottom-up community self-empowerment are so strong and active in American society (see the links in our editorial for proof).

The Democracy Collaborative’s “community wealth-building” model – pioneered in Cleveland, Ohio, exported to Preston, England, and now flowering around the world – is a great example of that in action.

CLES (the Centre for Local Economic Strategies) is a deep supporter of this approach, and have helpfully posted the five principles of community wealth-building here.

  • PLURAL OWNERSHIP OF THE ECONOMY.

  • CHALLENGE

    The UK is the fifth most unequal country in the world, according to the OECD. Financial wealth is held by a small minority, 44% of the UK’s wealth owned by just 10% of the population. At a local level, this means that the wealth generated by workers, local people, communities, local enterprise and business in our towns and cities does not flow back to them, but instead is extracted by distant shareholders as profits and dividends.

  • SOLUTION

    Locally owned and socially minded enterprises are more likely to employ, buy and invest locally. For this reason, community wealth building seeks to promote locally owned and socially minded enterprises by promoting various models of enterprise ownership that enable wealth created by users, workers and local communities to be held by them, rather than flowing out as profits to shareholders.

  • Learn more →

  • MAKING FINANCIAL POWER WORK FOR LOCAL PLACES.

  • CHALLENGE

    Access to credit is the life blood of many small businesses. Without it they struggle to operate and compete. Yet the UK banking sector is orientated to global markets rather than local investment and economic development and, in recent years, we’ve seen a stagnation of lending to small business and a loss of connection between lenders and communities.

  • SOLUTION

    Rather than attempting to attract national or international capital, community wealth building seeks to increase flows of investment within local economies, by harnessing the wealth that exists locally. Measures that channel investment to local communities can still delivering a steady financial return for investors.

  • Learn more →

  • FAIR EMPLOYMENT AND JUST LABOUR MARKETS.

  • CHALLENGE

    The rise of in-work poverty and zero hour contracts coupled with the erosion of job security mean that the reality of employment for many in the UK is increasingly precarious.

  • SOLUTION

    Often the biggest employers in a place, the approach anchor institutions take to employment can have a defining effect on the prospects of local people.

    Working with human resource departments within anchor institutions to stimulate the local economy through progressive employment and local labour market activities has proved a powerful tool to improve employment opportunities and workers rights

  • Learn more →

  • PROGRESSIVE PROCUREMENT OF GOODS AND SERVICES.

  • CHALLENGE

    When it comes how money is spent and services commissioned by anchor institutions, cost is often the dominant determining factor in who gets the contract. Environmental credentials, social value and decent employment conditions tend to be weaker considerations.

  • SOLUTION

    Community wealth building promotes the progressive procurement of goods and services, as this spending power can be a means through which greater economic, social and environmental benefits can be achieved. By adapting their procurement processes and decision making, anchor institutions can create dense local supply chains and ecosystems of businesses that are more likely to support local employment and have a greater tendency to recirculate wealth and surplus locally.

  • Learn more →

  • SOCIALLY PRODUCTIVE USE OF LAND AND PROPERTY.

  • CHALLENGE

    How land and property assets are owned and managed are key features of any local economy. Land ownership matters because it is an expression of economic and political power, and in the UK the ownership of land is concentrated in the hands of the very few while the least wealthy 30% have no net property wealth at all. The current state of landownership is a major driver of inequality, as a few private owners benefit from speculation on property markets whilst the majority suffer the consequences of unaffordable house prices.

  • SOLUTION

    In a community wealth building approach assets are owned and managed in ways which ensure that they generate wealth for local citizens, rather than enclosed by private interests. To achieve this, public land owners should develop governance and management structures where communities can take direct control of common assets, for example through transferring under-utilised assets to Community Land Trusts, or working through Public-Commons Partnerships.

  • Learn more →

We have also been alerted by Joe Guinan of the Democracy Collaborative of the exciting CWB model being prepared by Scotland’s East Ayrshire council – as Joe inimitable says, it’s going to be “soup to nuts” comprehensive in its planning, and the “most advanced” model yet. Here’s the page containing all the info, here’s a PDF of their 2020-2025 plan, and below is embedded a short Zoom video where the main players speak of their ambitions:

This was originally posted on the Alternative UK blog on 13th November 2020.


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Posted on 26 Nov 2020   Categories: Blog, Cross-posts, New economic models, Community Wealth Building, The place we want Related Tags:  

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