Local model is key to reviving the economy
WITH 17 days left, it feels like this election is already over. Maybe it’s something to do with postal ballots being received and dispatched late last week, or the fact most TV debates preceded the publication of manifestos.
Either way, the repetitive nature of some leaders’ messages is starting to grate. Anas Sarwar’s “peacemaker” spiel about the pandemic not distinguishing between rich and poor, young and old, Yes and No voters was good first-time round, but is now so familiar I can repeat it in my sleep. Likewise, Nicola Sturgeon’s thoughts on not holding an indyref mid-pandemic and Douglas Ross’ insistence that independence and recovery cannot happen at the same time (though combining the roles of MP, MSP, linesman and party leader apparently can).
Maybe then, to revitalise and reground the campaign, it’s worth digging deeper into the most novel and transformational proposal to date – not free NHS dentistry, a Millionaire’s Tax or even the Libdems’ laudable idea of play-based education until the age of seven.
In fact, the commitment to community wealth building in the SNP manifesto, whilst dull and worthy-sounding in the extreme, could provide the single biggest shot in the arm to the real economy this side of independence – if politicians really mean business.
The fading rust-belt city of Cleveland,
Ohio, was rebooted and revived by $5.8 million of investment from a variety of sources led by social entrepreneur Ted Howard in 2008. The “Evergreen” worker co-operatives he established bid successfully for contracts to supply local hospitals, councils and universities. A laundry, energy co-operative and co-operative urban farm now collectively employ 150 people – many with criminal convictions and no qualifications. But the co-operatives are profitable and now – using “patient capital” from investors with no need for quick profit – a new Fund for Employee Ownership aims to take family businesses whose owners are approaching retirement and convert them into the Cleveland co-operative model, creating a thousand more local jobs.
Service delivery for local taxpayers has remained largely unchanged – the key difference is the experience of the Evergreen workforce. Half own a stake in their co-operative and are eligible for pension payments, profit sharing and help to buy their own homes.
According to Ted Howard: “A job is not enough. For people to stay out of poverty they need to have assets.”
The irony is that councils, health boards and universities the world over would endorse this sentiment, whilst failing to use their considerable, combined, contractual clout to help achieve it. That changed in Cleveland where civic bodies dramatically changed their attitude to the criminal waste of millions of dollars flowing from the city every year in “best value” contracts awarded to massive, zero-hour contract-deploying companies headquartered elsewhere.
It was a mini civic revolution, which could happen in Scotland too, if central government, councils, health boards, universities and quangos could operate together to extract better value from the billions they spend in our name every year through procurement processes that are currently stacked to suit massive outsourcing specialists like Serco – an outsourcing giant whose profits soared as its disastrous testand-trace system recently collapsed.
Of course, such a dramatic change from the old “safe” best value outlook will inevitably create problems.
Chief amongst them, the need to ditch the deep-seated belief that still persists amongst managers and professionals, that economies of scale are supremely important to achieve – no matter how disastrous the big company performance or how many capable, smaller, local firms – starved of public sector contracts – go to the wall.
British governments have always agreed that big is beautiful – in the shape of massive nationalised industries or equally large corporate players. But now the privatising zeal of Margaret Thatcher has combined with Boris Johnson’s contracts for cronies, to make this size issue more extreme.
There are a lot more contracts knocking about and they’ve grown steadily larger, more complex and consequently lie even further beyond the reach of local firms.
Big is automatically seen as a guarantor of success – even though banks that were “too big” did fail and small countries, with ultralocal government and a highly developed instinct for self-reliance have been held up as exemplars during the pandemic.
EU procurement rules have been blamed (as ever) for carving local suppliers out, since contracts over a certain size had to be advertised across the whole European
Union. But councils were always allowed to select bids based on quality, risk, social value, food miles and other factors besides price.
The proof of that pudding is Preston Council which used the Cleveland Model to double its spending with local businesses in the pre-brexit period of 2012-2016. It used a weighting system that scored local labour recruitment and skills training to award contracts to local firms. In 2018 Preston was declared the most improved city in the UK, by an independent Demos report and the city’s unemployment rate halved as local procurement spending rose in the five years to 2017.
In Scotland, innovative councils like Aberdeen have also awarded public contracts to local food producers by inserting food miles into their selection criteria whilst remaining “EU compliant”. Where there’s a will there’s a way. So, does the absence of a Scottish Cleveland or Preston suggest a lack of political will here?
Community Wealth Building made an appearance in the SNP’S programme for government last year, prompting councils like Glasgow City to trial small, pilot projects. According to leader Susan Aitken, the council now intends to build on its experience and announce a city-wide Circular Economy Action Plan.
This is the scale of ambition needed if the Covid recovery and Green transition – more empty buzzwords during this election campaign – are not to become disappointing missed opportunities.
We lack the “patient capital” that allowed Cleveland to set about transforming itself. But with this election, Scotland has a political opportunity to radically change procurement policy so that our council tax millions invest in local people to deliver local services.
We need pump-priming councils who think like local economic dynamos, so that what goes around in taxpayer cash comes around in locally sourced jobs.
And we need a new Holyrood government willing to lead by example.
A job is not enough. For people to stay out of poverty they need to have assets