Community Wealth Building - Preston Model

1. Overview

Community Wealth Building (CWB) is a systems-based approach to local economic development focused on creating an inclusive, resilient, and equitable economy by reorganizing and controlling local assets. The Preston Model is a pioneering UK implementation of CWB from Preston, Lancashire, challenging conventional top-down economic strategies that often lead to wealth extraction. It addresses the cyclical disinvestment faced by post-industrial cities by redirecting existing community wealth to build a stronger, self-reliant local economy for all residents.

The Preston Model emerged in 2011 after the collapse of a £700 million city center redevelopment project. This failure prompted Preston City Council, led by Councillor Matthew Brown, to partner with the Centre for Local Economic Strategies (CLES). Inspired by the “Cleveland Model” and the Mondragon Corporation, they adapted CWB principles to Preston’s context. The model leverages “anchor institutions”—large, local public sector organizations—to use their procurement, employment, and assets to foster a democratic, locally-rooted economy.

2. Core Principles

The Preston Model’s interconnected principles, adapted from the broader CWB movement, guide anchor institutions and local stakeholders in building a democratic and resilient local economy.

1. Plural and Democratic Ownership: This principle fosters a diverse business ecosystem beyond large private corporations by encouraging cooperatives, employee-owned businesses, and social enterprises. The goal is to broaden capital ownership, retain profits locally, and increase business accountability to the community.

2. Local Financial Power: This principle harnesses local financial resources by encouraging the use of local banks and credit unions, exploring a regional community bank, and leveraging public pension funds for local projects with social and financial returns.

3. Fair Employment: The model promotes high-quality, stable employment with fair wages and conditions, pushing for a “Real Living Wage” city. It also emphasizes skills development and employment pathways for marginalized residents to ensure shared economic benefits.

4. Progressive Procurement: This well-known principle involves shifting anchor institution procurement to prioritize local suppliers. By redirecting their purchasing power, the model creates stable demand, helping local firms grow and create jobs, recognizing procurement’s power in shaping the local economy.

5. Socially Productive Asset Use: This principle advocates for the strategic use of public land and property for community benefit, such as affordable housing, community enterprises, or renewable energy. The aim is to generate long-term social, economic, and environmental value rather than short-term financial gain.

3. Key Practices

The Preston Model’s core principles are translated into practical actions that form the operational heart of the model, demonstrating how anchor institutions and partners can reshape the local economy.

1. Anchor Institution Spend Analysis: This foundational practice involves a detailed annual analysis of each anchor institution’s procurement spend to identify opportunities for local sourcing. The initial analysis in Preston, for example, showed that only 5% of the anchors’ £750m spend was local, creating the impetus for change.

2. Progressive Procurement Policies: Anchor institutions adopt progressive procurement policies, including breaking down large contracts, prioritizing social value in tender evaluations, and engaging with local suppliers to help them navigate the process.

3. Cooperative and Social Enterprise Development: The model supports the growth of businesses with democratic ownership structures by providing business support, identifying market gaps, and creating a supportive network for social enterprises and cooperatives.

4. Local Financial Ecosystem: The model promotes local financial institutions, including a campaign for a regional community bank, to provide affordable finance and ensure financial decisions serve the local community.

5. Anchor Mission Commitments: Anchor institutions formally adopt a “community wealth building mission,” embedding CWB principles into their core strategies to ensure it is a central part of their identity and purpose.

6. Fair Employment Charter: The model champions a Fair Employment Charter, encouraging employers to commit to standards like the Real Living Wage, secure employment, and skills development.

7. Community Land Trusts and Asset Transfer: The model supports Community Land Trusts (CLTs) and the strategic transfer of public assets to community ownership to ensure the socially productive use of land and property.

4. Application Context

The Preston Model’s effectiveness depends on context and scale; understanding its ideal application is key to successful replication.

• Best Used For: Post-industrial cities seeking economic renewal, areas with strong anchor institutions, tackling persistent inequality, and building local economic resilience.

• Not Suitable For: Areas lacking political will or anchor institution buy-in, contexts requiring rapid, large-scale job creation, and economies dominated by a single, mobile industry.

• Scale: The model’s primary focus is the Multi-Organizational/Ecosystem level, creating a collaborative ecosystem. Its principles also apply at the Organization, Department, and Team/Individual scales.

• Domains: The model impacts a wide range of domains, including Public Administration, Healthcare, Education, Housing, Construction, Food and Catering, Professional Services, and Social Care.

5. Implementation

Implementing the Preston Model is a strategic, long-term process of institutional and cultural change, not a simple checklist.

• Prerequisites: Political leadership, a coalition of willing anchor institutions, baseline data and analytical capacity, and a dedicated coordinating body.

• Getting Started: Form an anchor network, conduct a baseline spend analysis, identify quick wins, develop a shared action plan, and communicate the vision.

• Common Challenges: Overcoming institutional inertia, navigating procurement law, lack of local supply chain capacity, and measuring and demonstrating impact.

• Success Factors: Sustained, collaborative leadership; a long-term, patient approach; data-driven decision making; and community engagement and empowerment.

6. Evidence & Impact

The Preston Model has gained significant attention for its innovative approach and tangible results, with evidence of its impact in economic data, social outcomes, and its adoption by other localities.

• Notable Adopters: The Preston Model has inspired other UK localities like Birmingham and Manchester to implement CWB strategies, and is being studied and adapted internationally.

• Documented Outcomes: The most cited impact is the shift in local procurement. Between 2013 and 2017, anchor institution spending in Preston increased from 5% to 18.2% (£74 million boost), and in Lancashire from 39% to 79.2% (over £200 million increase). Preston also became the first accredited Living Wage City in the north of England.

• Research Support: The model’s impact is documented in reports by CLES and Preston City Council, The Democracy Collaborative, and academic studies from institutions like the University of Central Lancashire and the British Medical Journal.

7. Cognitive Era Considerations

The Preston Model’s principles are well-suited for the Cognitive Era. AI, data analytics, and automation can enhance CWB’s effectiveness and scalability, while highlighting the importance of human judgment.

• Cognitive Augmentation Potential: AI can enhance spend analysis, map and develop the local supply chain, and create intelligent tendering platforms to simplify procurement for small businesses.

• Human-Machine Balance: The core of the model remains human-centric, focusing on relationship building, ethical judgments in procurement, and nurturing democratic ownership.

• Evolution Outlook: The model will likely evolve into an AI-optimized system, with digital twins for policy simulation and predictive capabilities for economic needs. The challenge is to ensure this evolution serves the goal of a democratic, equitable, and human-centered economy.

8. Commons Alignment Assessment (v2.0)

This assessment evaluates the pattern based on the Commons OS v2.0 framework, which focuses on the pattern’s ability to enable resilient collective value creation.

1. Stakeholder Architecture: The pattern defines clear responsibilities for anchor institutions to act in the interest of the local commons. It identifies a broad set of stakeholders including businesses, employees, and residents, but formalizes their rights and roles less explicitly than for the core institutions. The architecture is robust in its institutional focus but could be enhanced by creating more direct channels for resident participation in the governance of the value creation system.

2. Value Creation Capability: It excels at enabling collective value creation far beyond simple economic output. The model is explicitly designed to generate social value through fair employment, ecological value through the productive use of assets, and knowledge value by building local skills and business capacity. This holistic approach directly counters extractive economic models by focusing on retaining and circulating diverse forms of value within the community.

3. Resilience & Adaptability: The model is fundamentally a strategy for building resilience. By diversifying the local economy with plural ownership models and strengthening local supply chains, it reduces dependence on external corporations and makes the community less vulnerable to economic shocks. Its origin as a response to a major project failure demonstrates its inherent adaptability and capacity to help a system maintain coherence under stress.

4. Ownership Architecture: A core principle is “Plural and Democratic Ownership,” which redefines ownership as a set of rights and responsibilities, not just monetary equity. The model actively promotes cooperatives and employee-owned businesses, distributing control and accountability more broadly. It also reframes public assets as tools for long-term community benefit rather than items for short-term sale, aligning with a stewardship-based view of ownership.

5. Design for Autonomy: The pattern is heavily reliant on human-centric coordination, such as relationship building and institutional collaboration, which gives it a high initial coordination overhead. While Section 7 notes its potential for augmentation with AI and data analytics, its core logic is not inherently designed for compatibility with autonomous systems like DAOs. It is a transitional pattern in this regard, capable of being adapted but not natively autonomous.

6. Composability & Interoperability: The Preston Model is highly composable, designed as a framework that integrates multiple other patterns and initiatives. It naturally combines with Fair Employment charters, local banking movements, and cooperative development programs. This interoperability allows it to be adapted to different local contexts and to form part of a larger, multi-faceted system for building a commons-based economy.

7. Fractal Value Creation: The pattern’s value-creation logic is fractal, applying at multiple scales. While implemented at a city-wide, ecosystem level through the anchor network, its core principles can be scaled down. Individual organizations can adopt progressive procurement, departments can prioritize local hiring, and even individuals can contribute by supporting local, cooperatively-owned businesses, demonstrating that the logic holds true from the macro to the micro level.

Overall Score: 4 (Value Creation Enabler)

Rationale: The Preston Model is a powerful and proven framework for enabling resilient, collective value creation. It strongly aligns with most pillars of the v2.0 framework, particularly in its focus on holistic value, stakeholder responsibility, and alternative ownership models. It serves as a crucial bridge from extractive economic systems toward a true commons-based economy.

Opportunities for Improvement:

• Formalize the rights and roles of residents in the governance of the anchor network to enhance democratic accountability.
• Explore deeper integration with digital and autonomous systems to reduce coordination overhead and scale impact.
• Develop more explicit mechanisms for valuing and regenerating ecological and knowledge-based commons alongside economic and social ones.