Councils across the country are using community wealth and assets approaches to improve their local economy and involve local people in decision-making. Our Researcher Jon Tabbush looks at how these models could work in London.

London councils are in crisis. Between 2010 and 2020, their core funding from central government fell by 63 per cent. Even now, they face the largest funding shortfall of any region in the UK. The pandemic’s economic impact on the city has been substantial and is set to worsen as the furlough scheme ends, the £20 uplift in Universal Credit payments is cut and the extent of the city’s over-supply of office space becomes apparent.

Talk of building back better is widespread, but at a time when revenue from business rates is falling and the need for support from local residents and businesses is growing, it’s difficult to know where the resources for a better ‘new normal’ will come from without outside help (of which there is no guarantee). Instead, one answer is to turn inwards and re-evaluate the assets that local areas already have and whether they could be used in ways that generate more value for residents.

There are examples of councils already taking this kind of action. In 2011, Preston City Council responded to the failure of a major regeneration scheme centred around a shopping centre with a programme of ‘community wealth building’. They worked with public sector employers to procure more goods and services from local small businesses and cooperatives, strategically invest their financial assets in local projects, and promote decent, well-paid work. Over the 2010s, the council and the city’s ‘anchor institutions’ (large, locally rooted employers and purchasers, like hospitals and universities) more than tripled the proportion of their procurement budgets they spent in their local area from 2012/13 to 2016/17. In 2018, Preston was named the most improved city in the UK by the Good Growth for Cities Index. The council now plans to set up a regional cooperative bank, support 10 new cooperative businesses, and use money in its pension fund to make local investments.

But these approaches haven’t only been used in Preston. Councils under different political control around the UK are attempting to make their procurement more local and impactful, experimenting with how to get the most social value, not just financial value, out of their property portfolios, and debating innovative investment possibilities for the £272 billion saved in UK local authority pension funds. This could mean designing procurement processes to give local providers a fair shot at competing against big businesses, using vacant council property for affordable or free workspaces rather than selling it to developers, or using pension capital to fund local infrastructure. How the framework is applied will vary from place to place but will rest on shared principles.

Could this kind of strategy work in London? The challenges are easy to see. London is a patchwork of 32 boroughs (and the City), each with overlapping services, institutions, and local economies, overlaid by the Greater London Authority, Transport for London, and other pan-London institutions. Londoners cross borough borders every day to work, shop, and socialise, making beggar-thy-neighbour competition impossible, even if it were desirable. Residents of my home borough, Barnet, would obviously lose out if the high streets in Brent, Haringey, and Enfield that we rely on declined and their businesses failed, even if our own high streets flourished. London’s overheated land market also makes experimenting with property much more expensive and difficult than in places like Preston.

However, there are also some obvious opportunities for this approach in the capital. London boroughs spend more than £23 billion on services and capital expenditure a year, employ nearly 170,000 people, and own over 130 square miles of land – a larger area than the entire city of Dublin. Such a significant transition will take political will, but this seems to be growing. The mayor has convened a London Anchor Institutions group of major employers to aid in the recovery from COVID-19 and many London councils have begun to experiment with community wealth building and community asset approaches. What’s needed is a shared understanding of how these strategies could work in London and a common language with which to cooperate without imposing a single framework on a city of 32 diverse boroughs.

Jon Tabbush is Researcher at Centre for London. Follow him on Twitter.

We’re conducting a research project, supported by The Friends Provident Charitable Foundation, to explore the scope for community asset approaches in London. In conversation with councils and experts, we’ll try to create that shared language, to map what London boroughs are already doing and what their plans are. We’re particularly interested in getting local people involved in developing these strategies and in exploring the potential for collaboration across the borders between boroughs and institutions. If you are interested in getting involved in the research, please contact Josh Cottell.