Wide-ranging research has named Preston the UK urban area that’s improving the fastest. The city’s Labour council has adopted a prototype for elements of Jeremy Corbyn’s economic strategy. But the council’s work must also be seen in the context of deep Conservative government cuts to council budgets.
As the Guardian reports:
Preston has experienced a large reduction in its unemployment rate, down to 3.1% last year compared with 6.5% in 2014, while it has also seen improvements above the national average for health, transport, the work-life balance of its residents, and for the skills among both the youth and adult populations.
The research, which accountancy giant PricewaterhouseCoopers (PwC) and thinktank Demos carried out, looked at house prices, transport, inequality, leisure time and pay.
The Labour council part-runs the Lancashire County Pension Fund, which is investing £100m in the local economy. For example, the fund has re-established Preston’s Park Hotel to create jobs and facilitate tourism.
Speaking about Preston, shadow chancellor John McDonnell has said:
This kind of radicalism is exactly what we need across the whole country.
Local spending strategy
Facing council budget cuts of one third, the Labour-run council had to try and make the money go further.
Councillors convinced local public institutions (police, the university, housing) to spend more of their total £1bn budget in Preston. Turning to the other side of the deal, the council also organised advice for local suppliers to successfully pitch for contracts from those public institutions.
The result was an extra £75m spent (£530 per citizen) within Preston, according to the Centre for Local Economic Strategies thinktank. That meant the institutions spent 18% of their budget within Preston, compared to 5% in 2013.
The idea is that these public institutions anchor economic activity within the local area. Preston’s ‘anchor institutions’ featured in a 48-page ‘alternative models of ownership‘ pamphlet commissioned by McDonnell.
An author of the report at PwC, Jonathan House, said:
It’s definitely a combination of the public and local private sector, providing the context for this good growth to take place. Some of the policy and business decisions have led to this improvement.
Given that the Conservatives have drastically cut council budgets, the council has not had much room at all. But still, the strategy seems to have delivered positive results for the local community. And it suggests that more localism and more investment is precisely what the economy needs.
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Featured image via Guardian News/ YouTube