Agenda item

Report of Service Director, Corporate Commissioning and Procurement

The Committee received a report as part of its Review of Community Wealth Building.  The Council has agreed to implement a Community Wealth Building (CWB) model as one of the tools to support the Thrive agenda, in order to achieve this the Council have been working with CLES (Centre for Local Economic Strategies).

Gateshead Council is establishing itself as a leading practitioner of CWB, as a fundamental drive of an inclusive economy, CWB aims to reorganise and control the local economy so that wealth is not extracted but broadly held and generative, with local roots so that income is recirculated, communities are put first and people provided with opportunity, dignity and well-being.

Traditionally the Council has focussed on redistribution after wealth is created, CWB is about pre-distribution during and before wealth is created.  It is about wealth, power, institutions and community with a focus on growing social and environmental benefits into all economic activity.

The medium-term recommendations to achieve this are set out below:

·         Re-engagement with Anchor Institutions including Queen Elizabeth Hospital and Gateshead College. – initial discussions were held with Anchor Institutions, however; further work needs to be carried out to support the development of a memorandum of understanding/charter committing to their collaboration and advancing CWB work. Key intentions are to:

·         Review of land and property assets held by anchor organisations in Gateshead to see if they could be re-purposed.

·         Develop a carbon reduction/energy transition approach with anchor institutions.

·         Anchor institution workforce analysis. Identification of gaps with parts/cohorts of citizens more distant from labour market.

·         E-learning modules to be rolled out via the intranet providing training on CWB for all staff. 

·         Appoint a Social Value Coordinator (subject to funding) to facilitate the allocation and coordination of £3.8m Social Value offers.

·         Continue to work with the VCSE sector, branching out to schools and internal colleagues to identify what Social Value requirements they have and embed them into future procurement opportunities.

·         Develop our internet pages and social media platforms to improve SME’s access to contract opportunities.

·         Greater emphasis on pre procurement engagement with local organisations, quotations being ring fenced to local companies, a number of Dynamic Purchasing Systems (DPS’s), similar to frameworks, have been established to enable participation of local companies, a recent example of this is on the Construction DPS, where we have specifically targeted local companies to get on the DPS, we have received 30+ applications.

·         Addressing gaps in the local supply chain and those opportunities offered to local suppliers.

·         Investigation into existing business support activities that support the development of the generative economy and improve the competitiveness and readiness of local supply chains, ensuring business opportunities are accessible to the local market.

·         Support the development of the social economy and alternative business models, including cooperatives and community interest companies that have the potential to provide goods and services that meet community need and address gaps in Council and anchor institutions’ supply chains. Explore the potential for a Gateshead Plural Economy Development Network.

·         Explore the viability of a co-operative and ethical business Accelerator Programme.

·         Development of Social Value framework/Community Benefit for all planning and development.

·         To ensure that all future planning activity considers maximum social/community benefit, including improving residents’ access to employment opportunities arising from major regeneration projects through the Gateshead Works Service.

Traditionally economic development has been private sector led, there has been some area based regeneration, there has been silo working and has come from external agencies rather than local government.

Community Wealth Building is framed by co-operation, localising wealth, anchor institution led regeneration, multiple outocomes, collaborative working, local government as a place maker, socially and environmentally focused and has a blended infrastructure.

There are five pillars to community wealth building:

1.    Anchor commission and procurement

2.    Fair employment and just labour markets

3.    Socially productive use of land and property

4.    Making financial power work for local places

5.    Grow local and community ownership of the economy

There are a number of areas around the UK who have adopted Community Wealth Building Strategies, Preston are renowned as leaders.  Birmingham’s Anchor Network consists of seven of the City’s largest institutions, a combined workforce of over 50,000 people and budget of over £5bn.  They have a community wealth builder in residence and they are expanding into Sandwell and Wolverhampton, with Dudley and Walsall in discussion.

Gateshead started its Community Wealth Building Journey in 2019 with investigation into the 5 pillars of CWB a desk review and officer interviews and workshops.  A spend analysis was undertaken with a gap analysis of ‘influenceable’ spend and exploration of the wider local economic impact.  There was some early engagement with anchor institutions but this stalled during Covid.

During Covid and Action Plan for CWB was developed and work was undertaken on developing the narrative.  A social value framework was developed with an achievement of £3.8m in social value offers which will help deliver CWB.    Work is also ongoing to reconvene the Anchor Network.

Phase 3 commenced in 2021 with a Gateshead Summit in December 2021.  With regards to the Anchor Institution Network, 3 working groups have been set up to look at areas such as spend analysis and employment analysis. 

Next Steps include, re-engagement with Anchor institutions, tracking the impact of the e-learning module, looking to embed CWB into all procurements and look at the work undertaken by the Local Enterprise Group.

In January 2023, we will hold another Evidence Gathering Session with colleagues from Economic Development, HR, and Procurement to discuss their work around employment and skills, the development of the local economy and the CWB outcomes achieved through procurements.  Followed by an interim report to OSC in March and a final report in April 2023.

It was noted that when you look on the landing pages for doing business with Gateshead Council there is no mention of Social Value, an estimate of £3.8m of social value, it was queried how that was worked out.  A toolkit was mentioned, it was suggested that it would be useful for members to see that.  It was noted that the social value toolkit is a national toolkit which is used by most local authorities, we have adapted it at Gateshead and there is a plan to bring it along to a future meeting.

It was noted that it will be a positive to look at how we enable smaller organisations to bid for work, and this is a good opportunity to do so.  It was also suggested that there is a  lot of expertise in the form of Ward councillors who have spent previous roles in non-profit and other voluntary and social enterprises whose experience might be helpful.  It was suggested that this experience could be exploited.

It was also noted that there is a whole new health structure which covers the whole of the North East and whose Chief Executive is really conscious of their role as Community Wealth Builders.  It was suggested that officers be put in touch initially with the Director of Place for Gateshead.

It was suggested that we need to get better at understanding why companies aren’t submitting bids to us.  It was noted that we will be working very hard to make sure Gateshead businesses are able to bid for work.

It was queried whether there was a role for the council is connecting informal networks which are in place, who are set up in a way where no money changes hands goods are exchanged in lieu of money, for example a person pays for apples to feed their livestock with jars of jam.  Things like people who have a garden but don’t want to move and aren’t able to tend their garden would allow for people to use these resources.

It was also noted that there is a problem in people knowing who other ethical businesses are.  It was noted that Covid did do the Council a favour in terms of us knowing what businesses are out there as they applied for grant support.   It was agreed that we do need a much better understanding of what exists as there is a real issue around market intelligence, it was noted that creating a database is something that could be done but the issue is maintaining it.  It was suggested that it is incumbent on all of us to maintain knowledge and networks, partnerships and social media.  It was noted that there must be a role for Local Authorities to pull together this information.

It was queried how Community Wealth Building works in the context of moving around areas, for example, if a business wanted to expand out of Gateshead, would it hinder Gateshead businesses.

It was noted that CWB is focussed on areas of deprivation by building social economy models and in doing so providing economic opportunity it is not the intention to displace from somewhere else.  It is looking to correct a failure in the market with the intention of brining economic activity closer to the source and provide stimulus where it is needed.

It was noted that in one ward the ward councillors brought all of the voluntary organisations together as a thank you to them and it was surprising how many of them didn’t know about each other, it was suggested that there could be events set up where the Council or other anchor organisations work as intermediaries. 

It was noted that market intelligence is a real challenge and if someone is registered as a co-op they aren’t all necessarily registered to the same structures.  It is a question about how we build market intelligence.

RESOLVED      -           (i)       that the arrangements for gathering evidence for the review of Community Wealth Building be noted

                                      (ii)      that the views of the Committee be noted for incorporation into the final report.