Idea and goals
The impact of the financial crisis and austerity, the loss of a traditional inward investment project to the city and a change in political leadership finally led Preston begin work on community wealth building in 2011. From 2013, various procurement activities were introduced to enable the city to address its wider challenges and to help its economy to become more resilient. It was helped by the fact that the UK introduced the Public Services (Social Value) Act in 2012 that enabled local authorities to consider additional economic, social environmental benefits when carrying out procurements.
Preston's approach to community wealth building and the latest project of its various procurement activities, "Making Spend Matter",illustrate Preston's approach to public investment and procurement. Community wealth building follows a bottom-up approach seeking to redirect wealth back into the local economy and place control and benefits into the hands of people and communities. It is based on five key principles: a progressive procurement of goods and services, plural ownership of the economy, fair employment and just labour markets, making financial power work for local people and places, and the socially productive use of land and property.
As part of progressive procurement e.g., the city council and a number of anchor institutions (public organisations with a significant stake in the city) have undertaken a spend analysis to understand where their procurement spend is going. This identified the extent to which procurements are with businesses based in Preston and Lancashire or elsewhere in the UK and beyond, small and medium-sized enterprises (SMEs), social enterprises, and in which sector, and to explore the extent to which this money could be spent with different types of business, for example. They have also explored the extent to. Having gathered this information, the city could change its procurement behaviour to achieve more local economic, social, and environmental benefits, for example whether suppliers could create jobs or apprenticeships and what practices they could apply in terms of social engagement or environmental management as part of the procurement.
The objective of the "Making Spend Matter" Network was to transfer Preston’s identified good practice of using the analysis of procurement spend as an evidence-based tool to improve procurement processes and practices to six cities across Europe. The core of the transfer was to teach the other cities how to carry out the spend analysis themselves, with the aim that they would adapt it to their own circumstances and consider how to reuse it in the future.
The collective spend analyses of Preston shows that the way the city conducts its procurement is shifting towards more local spending. Whereas in 2013 five per cent of the city’s spending occurred within Preston, in 2017 this figure rose to 18 per cent. Spending within the region Lancashire also increased from 39 per cent to 79 per cent. Of equal importance was the fact that the percentage of SMEs engaged in procurements increased, showing a greater diversity in the number of businesses supplying goods and services.
The fact that Preston's procurement strategy was awarded an URBACT good practice in 2017 and made the city Lead Partner in URBACT twice in a row shows the relevance of the topic and Preston's exemplary role with its approach.