Economic recovery and reform: the role of community power
by Neil McInroy & Tom Lloyd Goodwin
Long before the Covid-19 pandemic, our economy was failing many people and the planet. The imperative then was to create an economy that serves our needs, and shares wealth amongst as many people as possible. This imperative has only been amplified by the situation in which we now find ourselves. We believe the surge in community power in response to Covid-19 harbours the key to building back a better economy.
The recent upsurge in social solidary has been impressive with millions of acts of kindness taking place every day. Within days of the NHS volunteer scheme being announced, over 750,000 people had signed up. The Covid-19 Mutual Aid movement has mobilised 2.5 million people across the UK who are now working with community groups to deliver emergency food parcels.
This resurgence of community action is powerful and needs to be the start of something. As we have written recently, the community and the local state should be on a joint mission to build a better economy. They should be new partners and allies against the threat of state centralism and underfunded local services.
“The community is not and should never be a replacement for the local or national state.”
But let’s be crystal clear. The community is not and should never be a replacement for the local or national state. With our public services stretched to breaking point and with huge impending economic and social crises, the idea that hard pressed communities can or should provide a substitute for the state must be continuously challenged. We should be wary of any slippery slope in which a struggling community sector delivers less with less – and inadvertently contributes to the weakening and hollowing out of the public sector. Local government should be a bureaucratic manifestation of the community and the human bonds between us all. No one wants a re-run of the Big Society.
To build back a better economy, we need to see this community resurgence as a power source. Instead of a confrontation to the local state or as a route to cost savings in public services, it should be a source of community wealth and be directed to growing new forms of community ownership in the commercial economy. We need to build community wealth by unleashing a new wave of retail and manufacturing co-operatives, community businesses and municipal forms of ownership. This is where energy and vim should be focused. This is the pathway to resilience and prosperity for all.
“Local economic development should be throwing out any belief in the free market and take urgent action here to intervene.”
Furthermore, as the dreamy hopes of a “bounce back” start to subside, we have private equity firms waiting in the wings for the opportunity to acquire an even greater ownership stake in our economy. As such, local economic development should be throwing out any belief in the free market and take urgent action here to intervene. The stakes are high and the need to animate the power of the community within the commercial economy is now even more acute.
Shepherding our economy through this unprecedented crisis will require a combination of big policy actions from the top as well as a groundswell of local strategies from the bottom up. CLES has recently published 9 approaches for local government, to help move from recovery to reform. Four of these approaches are particularly apt here as they call on local government to:
- Repurpose/replace existing business growth hubs, to support social economic growth and community ownership – including new social enterprise zones with a relaxation in business rates and planning.
- Transfer some land and property earmarked for traditional development to the community to support local social enterprise.
- Unleash mutual credit networks for business and look to grow community banks to help provide local finance.
- Use Covid-19 procurement rules to support more local co-operatives, social enterprises and community businesses through its supply chains.
The voluntary, community and social enterprise sector should of course play a role in some aspects of public service delivery – particularly in services such as adult social care and public health, for example. However, we must be very clear: divesting swathes of public services to impoverished communities will never be the answer.
Let’s harness the energy in our communities; let’s repurpose our economy. This is a prerequisite to a flourishing society. Communities must be empowered to take the economy on as we rescue, recover and reform in the wake of Covid-19.
Neil McInroy is chief executive and Tom Lloyd Goodwin is associate director of CLES.
This was originally posted on the MJ blog on the 22nd May 2020.
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