Case Study: The Islington Model

In 2010, Islington’s Fairness Commission reported that the borough is a place of stark inequalities, ‘two Islingtons’ where acute deprivation still exists side by side with extreme wealth. On the one hand, Islington is home to some of the wealthiest people in the country and lies at the centre of one of the most dynamic cities in the world, which is home to world-class business clusters, over 18,000 businesses of all types and sizes, and employs over 256,000 people. On the other hand, Islington has the second highest rate of child poverty in the UK, with over a third of our children living in poverty, and frequently trapped in unsuitable accommodation. Also, too many residents struggle to find good jobs, and lack the right skills, networks, or confidence for growing economic sectors. 

The financialisation of the economy has been especially prominent in Islington’s property development, meaning smaller businesses are now facing the impact of rapidly rising property costs and business rates, which negatively impacts not only their ability to grow but the opportunity to remain in the borough. This uneven investment also has a tendency to focus on clusters of high-tech and high-growth companies in areas such as ‘Silicon Roundabout’, leaving other parts of the borough, such as Finsbury Park, and low-growth sectors such as textiles, without financial support.

Those not benefiting from this immense growth are the borough’s working class and Black, Asian and Ethnic minority community, who are more adversely affected by disparities in employment, savings, and education. The Runnymede Trust’s Colour of Money report, published in 2020, strongly supports the claim that Black African and Bangladeshi households, particularly, are largely losing out on their share of this economic growth. Most visibly, this gentrification is forcing residents to use public transport for affordable food shopping, or worse, leaving the borough for lower commercial and residential property rents.

Within a broader context, the UK’s local government has often been an enabler of an extractive economy, supporting inward investment at the cost of decent work, secure wages, and retaining local wealth. In a wider reflection on the state of democratic institutions in the UK, CLES argues that the majority of local government is “captured by a managerialism which is more keen to facilitate this flow of wealth extraction, than to capture wealth for the purpose of addressing deepening inequalities.” This culture within local government has primarily focused on value for money and efficiency within its public services, rather than social value, permitting national providers to outcompete local businesses in tender opportunities and deliver poor outcomes for residents.

Community Wealth Building Adapted

In the last decade, during a period where local authorities have reluctantly imposed public funding cuts on nearly all services, new economic policy initiatives have attempted to reverse their effects by proposing a transformation in the role of local government through reconnecting social value and corporate priorities, and plans to redirect public wealth back into the local economy. Through this relatively new approach, councils are starting to facilitate new opportunities for people to create their own businesses and take an active role in shaping the local economy.

Within this context, a policy export from the US – Community Wealth Building – has been trialled in deprived areas like Preston, Lancashire, and inspired related efforts from many other municipalities from Birmingham to North Ayrshire. As a policy approach it starts from recognising the failure of market-led approaches in addressing inequality and recommends an active role for local government in exploiting its municipal services, programmes, assets, and broader institutional power to build local economic security.

Community Wealth Building, though, has largely been modelled on areas of widespread deprivation that have experienced deindustrialisation and disinvestment over the last few decades, from Preston to Cleveland, Ohio. What happens when you use this approach in a local economy, such as Islington, where the lack of inward investment is not the problem? What happens when you make these interventions into a Central London borough that is a UK leader in business generation and experiencing immense economic growth? 

Council interventions and the role of democratic business

Since 2017 Islington Council has pioneered an interventionist approach, using its services, programmes, and assets to directly tackle the roots of inequality and disadvantage in the borough, challenging itself to use its institutional power as part of rebuilding a fairer local economy before and after the pandemic. 

Despite the long-term nature of this approach, it’s already having a significant impact on the Islington’s economy and has produced a number of notable outcomes, including new affordable workspaces focussed on supporting co-operatives, technology, and fashion startups; a range of employment and apprenticeship schemes, partly supporting entry into the tech sector; and most recently funding the development of the first local government funded Co-operative Development Agency in the UK for nearly 40 years.

A core focus of this approach is the transformative role of democratic ownership, as part of an economic development approach focused on supporting those most marginalised by the current economy. As businesses, co-operatives can be part of a pro-business approach within local government, while their emphasis on democratic ownership and decision-making puts direct control into the hands of the local community as employees, investors, volunteers, and users. 

At the most fundamental level, democratic ownership models – where businesses are owned and controlled by their workers and other stakeholders – ensure that institutional investments and wealth generated by council activity is more likely to remain locally rooted and circulating in the local economy. But beyond their roles as businesses, they are also recognised as cultural organisations for community empowerment, and often have an outsized impact on local people’s sense of safety, collective efficacy, trust, and social connections. 

In terms of the role of local authorities in co-operative development, there is a historical precedent that strongly indicates that public money in the sector leads to more diversity, and Islington Council has exciting ambitions for this ownership model to reconnect with the unemployed and economically inactive in the borough today.  

Fairness to social value

More than a decade ago, the widening inequality and intractable disadvantage in the borough inspired the council to create the The Islington Fairness Commission in 2010. With the objective of establishing a Fairer Islington agenda to work towards addressing inequality of wealth, health, housing, education, and crime in the borough, the report inspired several pioneering initiatives. Islington Council became one of the first members of local government to pay the London Living Wage, it introduced free school meals for all nursery and primary school children, and created a new in-house employment services team – iWork – that has supported 5,500 people back into work.

Building on this fairness agenda, Asima Shaikh – now a member of the Council’s Executive to provide political leadership and strategic direction for the inclusive economy and jobs – started exploring inclusive approaches to regeneration in the borough. With a background in international economic development and a previous role in the Economic Unit of the Greater London Authority, Shaikh realised that democratic business could broaden economic participation and provide an opportunity for new partnerships and council-led market interventions.

The initial focus was transforming an institutional approach towards local economic development and procurement. First, the council created the Inclusive Economies Portfolio, the beginning of a process to build its capacity to support these aspirations. Then in 2018 it created the Inclusive Economies team, appointing a Head of Service and an Inclusive Markets Development officer to explore what economic interventions could support a more democratic and fairer economy. 

With the support of Manchester City Council consulting on their procurement strategy, the council retrained its procurement team, raised the corporate standard for social value weighting from 10% to 20%, and engaged local anchor institutions – large social buyers and employers – such as Whittington Hospital, City University of London, and Metropolitan University. This was followed by the creation of a Community Wealth Building directorate to integrate the council’s economic development function, planning, procurement, and asset management to accelerate these ambitions. At this point, the council made a decision to start testing a new social value framework through an initiative to secure office space from developers – Affordable Workspaces.

Finding space for inclusive growth

Affordable Workspaces – which has now delivered more than 2,520sqm of space and secured a further 2,824sqm from new developments to deliver in the next five years – is a council-led market intervention to offer long-term leases of 10-20 years on peppercorn rent to create badly needed office space for co-operatives, social enterprises, and other entrepreneurs within an overheated property market. As part of this initiative, the council developed a social value commissioning framework to assess affordable workspace operators, incorporating this framework as an obligation into new contracts. Among the five social value indicators that feature in the bidding process is the extent to which providers plan to support women and unemployed residents to get back into work, and how many disabled, young ex-offenders, and black or minority ethnic staff they expect to employ. To date, the programme has generated over £1 million of additional social and local economic value.

To secure funding for this initiative, the Inclusive Economies team created an ambitious bid for the Mayor of London’s Good Growth Fund, Sadiq Khan’s £70M regeneration programme to support growth and community development in London. The £1.2M bid was successful and then match funded by Islington Council, providing a further £1M to invest in the Affordable Workspaces programme. Over the next year or so, the council released several tenders, inviting local businesses to bid to manage spaces in Finsbury Park and Clerkenwell. In 2019, the first tender – for an office space on Fonthill Road, Finsbury Park – was awarded to Outlandish, a local tech agency, who are now managing it as a coworking space for pro-social tech businesses. The anchor tenant is Founders & Coders, a tech nonprofit that offers tuition-free, peer-led training programmes in web development.

The coworking space is operated on a ‘pay what you can’ model, with 50% of space members benefiting from a partial or full discount, with the aim of attracting local businesses and entrepreneurs who can not afford local commercial rents. For example, Breakthrough – a charity that offers coding training to prison leavers – have a free tenancy at Space4, which enables to them to direct their funding to their beneficiaries. Other tenants, such as Animorph, are using VR for social good, working with the NHS to create apps for pain relief.

The relationship between Outlandish and Islington Council, starting with small public events to create local awareness, building a carbon pledge tool for the councils’ environment team to managing a coworking space and now leading the development of a new Co-operative Development Agency, is a partnership model that should be an inspiration for how Community Wealth Building councils can effectively work with local businesses to deliver on shared ambitions for a fairer economy.

Increasing access to the Tech sector 

At the beginning of the pandemic, Founders & Coders had seen notable success with their model of training individuals through coding bootcamps to give them access to the tech industry, funded by taking a percentage of the salary of those who completed their courses and went on to be successfully hired in the sector. However, while this model seemed well suited in principle to help bridge the gap between the worst off and the most prosperous industries in Islington, in 2020 they were training more coders in Italy than in their home borough.

This all changed with the pandemic. Soon after, the council’s Employment, Skills & Culture’s Akeel Ahmed approached Islington resident Dan Sofa, who leads Founders & Coders, about becoming an apprentice provider and refocusing on local recruitment. The council had already identified technology as a key sector in Islington – both as covid resilient and well remunerated – and explored potential partners for a coding programme, especially for furloughed employees who were interested in retraining. Through a council bid to the Greater London Authority’s Covid Response Fund in Autumn 2020 they formed a training partnership, but recognising that Founders & Coders Skills Bootcamp would be inaccessible to most local learners, they worked closely to co-design a pre-entry programme that could expand local participation. 

The council’s role focused on supporting referrals from local adult learners it had been supporting through other courses. One beneficiary, a young immigrant woman who had been in the learning system for three years and supported by a childcare bursary, participated in the course to develop her tech skills and employability. Following the course, she secured a job in a local tech agency.

This initiative was a first for the Adult Learning team and has been part of a valuable process of reducing the cultural distance between the community and local co-operatives. Through this work it also delivers against the council’s Social Value Matrix and Founders & Coders regularly submit evidence of their achievements against these metrics. The partnership has continued to develop with the appointment of a member of Founders & Coders as a governor for Adult Education Learning at Islington Council. 

Beyond working with Islington Council, this change in business direction towards apprenticeships has enabled Founders and Coders to tap into more education, employment and training resources from central government. The support of the council again has been crucial, helping to identify new and additional funding opportunities, including partnering on a two-year contract from the Department of Education.

Ultimately, the support from the council has enabled two major boosts for Founders and Coders’ ability to contribute to its social goals. Firstly, through the funding of Space4, the organisation has gained a stable and affordable space from which it can deliver courses to residents who may not have the equipment or personal resources to access remote courses. Secondly, the council stepped in to offer further support during the pandemic, when like many providers of primarily in-person training, the organisation’s business model came under severe pressure.

Providing security in the gig economy

One increasingly prominent feature of austerity has been the rise of the ‘gig economy’, involving precarious work on short term or zero hour contracts, often with little in the way of employment or other rights, and facilitated by heavily capitalised technology platforms. For instance, on fast food delivery platforms low-paid couriers can often juggle working for three to four platforms in one shift, which can often lead to cold food, customers requesting refunds from the platform and, ultimately, the restaurant losing money. It’s clear there’s only one winner here and it’s not the restaurants and couriers.

Within this economic context, there’s an assumption that worker exploitation is inevitable in new convenient services, but this is being challenged by Wings, a new ethical courier co-operative, which is primarily based in Finsbury Park. In 2020, Rich Mason – a former employee of the RSA – approached Asima Shaikh to discuss an idea for an ethical courier business, modelled as a platform co-operative. The concept of Wings emerged as a multilateral approach to benefit riders, restaurants, and local customers. After positive meetings, Mason was invited to pitch to the council and received a £20,000 grant to support the initial development of Wings. This funding has given the co-operative the opportunity to validate the revenue model, build transactions, and develop its investment readiness, such as a future community share offer. It launched in July 2021, with many riders who were part of an initiative to deliver emergency food parcels during the first Covid-19 lockdown. 

In terms of impact, Wings are committed to developing a business model that addresses job insecurity in the gig economy – it’s currently the only food courier business that guarantees the London Living Wage and offers sick pay and benefits – and is focused on improving poor relations with the courier community. They are also currently working with restaurants to give couriers access to toilet facilities, the lack of which often leads to anti-social behaviour. This is all part of changing the current platform economy, which has created a sense of alienation within the courier community, especially after the vulnerability of gig workers was highlighted by the murder of an Algerian national living in Enfield and working as a delivery driver for Deliveroo and Uber Eats in January 2020. In a marketplace with a lot of distrust, the council has played a significant role in offering credibility to the new platform as it onboards restaurants to the platform and improves community relations.  

With Islington Council’s plan for net zero carbon by 2030, Wings is currently the only platform with 100% zero-carbon vehicles, and is part of wider initiatives to decarbonise London’s streets, restructure urban places towards active transport, and contribute to noise reduction in residential areas. They also have long-term aspirations to reduce and even eliminate plastic waste. 

As a local co-operative, Wings are incentivising local customers to be aware of their social and environmental impact, and creating decent pay and dignified employment for a long neglected low-wage sector of the local community. 

With thanks to Stir to Action

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