But then something surprising happened, with Preston turning what seemed like a terminal setback into an opportunity. It did so by taking inspiration from the US city of Cleveland and its own response to similar problems it faced a few years earlier. There the response to a budgetary crisis had been heterodox and unprecedented, with local government refusing the default medicine of privatisation and outsourcing – focusing instead on energising the city’s economy through the procurement of ‘anchor institutions’ like schools, hospitals and universities. In time it proved a success, so much so that the approach came to be titled the ‘Cleveland Model’.
Its adoption in Preston, relatively unique in the context of the UK, provided the most unexpected of triumphs. Working with the Manchester-based Centre for Local Economic Strategies (CLES), Preston Council approached the town’s anchor institutions in 2011 proposing to redirect as much of their spending as possible back into the local economy. Six agreed to participate. This cooperative efort between civic and public institutions meant that locally focused contracts covered everything from school lunches to large-scale construction projects. All of this meant that while local anchor institutions spent £38 million in Preston in 2013, and £292 million in Lancashire, by 2017 those figures had increased to £111 million and £486 million respectively. While that alone was impressive, even it fails to illustrate the extent of change that locally focused procurement achieved, with a multiplier efect taking of in the city as pounds continually recirculated throughout the local economy. That meant that while real wages for workers in Central Lancashire fell after 2008, much as they did across Britain, in Preston – despite austerity – they actually went up.
Fundamental Principles
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