Our Local Economies

Chris Johnes and Neil McInroy celebrate the successes of communities building prosperity and outline the conditions that are needed to build more local wealth in Wales.

Later today, Building Communities Trust (BCT) and the Centre for Local Economic Strategies (CLES) will launch Our Local Economies. This document is the result of a year or so of collaboration across Wales and beyond, which has highlighted what people in local communities are doing to build stronger local economies and take control of key assets – a process increasingly called Local Wealth Building.


The work we have seen has covered everything from social enterprises running tourism ventures to new forms of care commissioning that supports community businesses, from SMEs establishing local networks to community-run renewable energy schemes. And while Our Local Economies showcases some examples of this activity, we know there is much, much more going on across many parts of Wales.


What the myriad actions have in common is an attempt to take or retain local control of economic and community activities, securing spend and employment locally, reducing vulnerability to external decisions and trends, and maximising returns. In many instances, these local initiatives have found it much easier to reap not only economic, but also social or environmental benefits.


This work has been led by a wide range of actors: local authorities innovating in commissioning, new forms of initiative by social enterprises, SMEs with strong commitments to their localities, and new forms of governance from community councils. The commonality has been a willingness to innovate and question established ways of working, often after trying established approaches first with more limited success.


While we have seen this work in a Welsh context, this is clearly not a Welsh phenomenon. Across the world, many areas are starting to interrogate how the economy is working poorly for communities. This includes a rise in action on community economic development, deepening the role of the local and nation state (and the public sector more generally) in realising the power of its anchor institutions. In England a programme of Local Wealth Building is taking place in over a dozen localities and the Scottish Government have this as an element of its Programme for Government.


Locally-focused community and business initiatives are not new, but there seems little doubt we have seen a significant increase in Local Wealth Building in recent years. This has come from entirely new initiatives: councils thinking that they need to plan more local economic sustainability, and third sector bodies which once focused solely on a social or environmental mission appreciating the value of an economic aspect, not just for their own financial sustainability but because there is a growing need for more local economic activity.


At a policy level, debates about stronger local economies have focused on either ‘Inclusive Growth’ (a notion we have criticised before as offering little of substance that merits the adjective) or the Foundational Economy, which is gaining greater traction. And while local wealth building is not ‘pure’ Foundational Economy, in many cases there are substantial links to foundational thinking (and indeed to Welsh Government’s halfway house of ‘foundational sectors’). Collectively, they offer a picture of what a more foundational-focused economy might look like in practice.


These developments are the antithesis of the City Deal: bottom up, lightly resourced and often focused on peripheral areas. Whether they are a refutation of City Deals or a necessary complementary approach is probably an unnecessary academic question. What is certainly true is that much local economy work can reach the parts that big investments focusing on large population centres cannot.


The success of many of the initiatives we have discussed in Our Local Economies depends on a number of factors. Local enterprise is fundamental, but success is also highly dependent on access to the right assets, networks and resources, as well as an appropriate regulatory regime, including breaking new ground in many cases. If we want to see more strong local economies, we need to make these conditions more readily common. This means easier ways for social and private enterprises to access finance and to share good practice, a greater willingness for public bodies to embrace best practice in asset transfer and access (including to the public estate), and a conscious effort to boost local economies through procurement and joined-up planning by public bodies. All of this is possible and it is being done now, but we need to take the conditions that have produced pockets of good practice and spread them across our country.  


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Chris Johnes is Chief Executive of Building Communities Trust. Neil McInroy is CEO of Centre for Local Economic Strategies (CLES).

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