Why British Cities Keep Going Bankrupt

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A video about why British cities are running out of cash.

Written, directed and presented by Tom Nicholas.
Edited by Georgia Burrows.

*Chapters*
00:00 British Cities are Going Bankrupt
01:46 Act I: Birmingham Goes Bust
12:10 Act II: A Brief Guide to UK Local Government
28:17 Act III: Deceptive Decentralisation
35:06 Epilogue: Community Wealth Building

*Bibliography*
You can find a bibliography for this video on my Patreon, here: https://www.patreon.com/posts/104406583

*Blurb*

British cities are going bankrupt. What was once an exceptionally rare event has become a regular occurance as six city, borough or county councils have announced they’ve run out of cash over the past two years.

In order to find out why, Tom Nicholas sets off on a four-day road trip around the UK to unpick how local government in the UK works, and how local councils might be empowered to become more sustainable in the future.

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Select footage courtesy of Getty
Music from Epidemic Sound

This city just declared bankruptcy. And, unless something changes in the UK pretty soon, it’s unlikely to be the last. I’m in Birmingham, the UK’s second most populous city. Home of the Peaky Blinders, Black Sabbath, Cadbury’s Chocolate, Aston Villa football Club, and a genuinely interesting Pen Museum, Birmingham has long been a trend-setting town. But, at the end of last summer ,it became a pioneer in a slightly less desirable sense when the city’s council announced that it had gone bust. A British City declaring itself bankrupt like this is usually an exceptionally rare event. Between 1988 and 2018 just two English councils ever found themselves in such a terrifying position. In the 6 years since, however, the number of cities falling into financial turmoil has skyrocketed. Six local councils have declared themselves effectively bankrupt since 2021 and it seems unlikely that they’ll be the last. A recent survey by the Local Government Association found that nearly one in five council chiefs in England feared their council could similarly run out of cash in the next two years. I’ve blocked four days out my schedule, booked three Travelodges and committed to driving an inadvisable distance in order to visit four British cities or counties which have recently gone bust. And to try and figure out exactly what’s going wrong here. As well as visiting one city which is experimenting with a whole new model of governance which can hopefully help cities to avoid a similar fate in the future. [Music] Morning! Welcome to the car. This will be our home for the next four days, three nights. So, we have all the basic features. Five wheels; one for steering. I think it’s going to be good. So, here’s the plan. Over the next three days, we’re going to be visiting four cities and counties, all of which have gone broke over the last few years. We’re driving up to Birmingham, down to Northamptonshire, back up to Nottingham, across to Liverpool (which hasn’t gone bankrupt, but I’ll explain why later) way back down to Woking and then, well, I’ve got an additional surprise destination for Day Three, but I’m going to keep that under wraps for now. I’m not going to lie, I am a little bit apprehensive of how much driving I’ve got to do over the next few days, as well as whether we can try and squeeze in all the filming we want to do in each location with the time that we’ve got. But, trying to tell this story from behind my desk back at home didn’t feel like it would quite capture the scale of the crisis that British cities are currently facing. Okay, the sun is up, we’ve had some breakfast, we are on the M5 and have avoided accidentally getting the bridge to South Wales and the next stop is Birmingham! [Music] With the council being bankrupt, they’re saying that now youth clubs are not going to get opened. And, I think it’s just detrimental to the youth. Buses, as well. Because, they’re heavily packed. Like, the other day, I’m fasting, and I left Uni about two hours early to get home on time and I was on the bus for about an hour and a half, when usually it should take 25 minutes. And that was really exhausting. They’re talking about the bin collections going from one week to two weeks. So, it’s like, it’s the little things that you’re starting to notice that it’s… it just makes me a bit sad. This structure behind me is the Alexander Stadium: the largest purpose built athletic stadium anywhere in the UK. Just two years ago, this arena played host to the opening ceremony of the Commonwealth Games, a kind of off-brand Olympics for ex-members of the British Empire. And ,Birmingham was a fitting choice for such an event. Not only does it have a rich history as one of the crucibles of Britain’s industrial revolution, but a steady stream of global migration to the city has made it one of Europe’s most diverse. In the lead-up to the Commonwealth Games, Birmingham City Council’s then-leader Ian Ward had promised the event would kick-off what he described as a "golden decade of opportunity" for the city: inviting all kinds of new jobs, opportunities and investment. But, whatever optimism might have buzzed through the city during those two weeks of pole vault and pentathlon, it’s safe to say those grander promises now ring pretty hollow. I’m Julien Pritchard. I’m a Green Party councillor representing the ward of Drury Heath and Monyhull, which is in the south of Birmingham. Birmingham City Council is often, it’s said it’s the biggest local authority in Europe; certainly it covers the biggest population, certainly in the UK. The council is Labour run, so Labour have a majority on the city council, so I’m in opposition. I mean, I don’t think any of my ward gets a good deal, to be honest, out the council. We’re now potentially going to lose even more. So, we have a library and we have a youth centre, and wepotentially might lose both of those. See, back in September 2023, Birmingham City Council’s Director of Finance uploaded this letter to the city’s website. This document is what’s called a Section 114 notice. And it is, in effect, a financial distress signal. In publishing a Section 114 notice, the city was formerly notifying the UK central government in Westminster that its projected income for the coming year in taxes and other revenue was not able to cover the cost of its projected outgoings. The consequences of admitting financial defeat in this way are pretty dire. Here in Birmingham, residents are preparing for an unprecedented 21% hike in local property taxes to try and dig the city out of its financial hole, while council-run services are being cut to the bone. This ranges from a 100% cut to all arts funding in the city, to a slashing of the support given to children and their families, to dimming street lamps to try and save on electricity. And, it’s not like council Services were being lavishly funded around here to begin with. In fact, one councillor quipped last month that, amid brutal cuts to bin collections and youth centres, the next decade was unlikely to be "golden" for anyone but rats and gangsters. Now we’ve got several million in cuts to the library budget. As I said, potentially all the libraries are under threat in the city. There’s 36 at the moment; and they are going to potentially close up to 25 of those. So there’ll be 11 left. It would be a, you know, we would be losing something. The council is, you know, we’re supposed to be about trying to create neighbourhoods and communities and investing in areas, and so… you take stuff out then that makes it a lot harder to do. So, how did Birmingham go from such dazzling highs to such bleak lows in such a short period of time, and why has financial turmoil here caused anxieties in council buildings across the country? Okay, assuming I’m able to navigate the incredibly confusing roads, that is goodbye Birmingham! There are a couple of events unique to Birmingham which have caused it to implode in quite such a spectacular fashion. The Section 114 letter which officially announced the city’s insolvency placed the blame squarely on a series of equal pay disputes brought against the city council by current and former employees. Over the past 15 years, the city has repeatedly been found to have upheld discriminatory pay practices which caused women to be paid less than men. And, having already paid out over £1 billion in settlements, it was suggested that the outstanding £760 million the city is still estimated to owe was the key reason for the council going bust. This narrative has since come under question. In March, accountant and academic James Brackley wrote a piece for The Conversation based on an extensive review he’d undertaken of Birmingham City Council’s finances. Brackley found that the real reason for Birmingham’s immediate financial turmoil was the fumbled implementation of a new accounting and HR system by the American company Oracle. Not only did migrating to the new Oracle software system end up costing more than three times what was initially quoted, but the software itself was highly dysfunctional At points, council staff basically had no idea how much money was going out and coming in. With these events in mind, it’s tempting to view Birmingham’s financial collapse as solely the result of mismanagement on the part of council leadership. Michael Gove, the member of the UK central government in charge of overseeing local councils, did just that: blaming Birmingham’s bankruptcy on "poor leadership, weak governance and woeful mismanagement of employee relations". Nevertheless, whilst bad decision-making was clearly a factor in pushing Birmingham over the edge, the idea that the city’s insolvency is only a product of compensation claims and bad computer systems begins to crumble the moment that we place Birmingham’s troubles into wider context. Because, as I mentioned at the top of this video, Birmingham is not the first city here in the UK to go bankrupt over the last few years, and neither was it the most recent [Music] So, it’s worth me acknowledging that the place we’re currently in, Northamptonshire, is not a city. In fact, it is very much a rural county. But, the ways these things are governed in the UK is remarkably similar. I’ll explain a bit more about it later but… just go with it now, please! It was from here in Northamptonshire that we got the first sign that things might not be entirely rosy in the world of British local government. In 2018, the county council here became the third English council ever to issue a Section 114 notice, announcing itself effectively bankrupt. The fact that eight years had passed since Hackney had been the most recent place to do so meant that it was easy to view this as a pretty exceptional event. The government commission tasked with investigating Northamptonshire council’s failure cracked out all their Microsoft Office skills to blame its insolvency on "hubris" on the part of local politicians and council staff. Since then, however, the catastrophes have kept piling up. Croyden, Slough, Thurrock, Woking, Birmingham and, most recently, Nottingham have all announced they’ve run out of cash in the past two years. And, even in cities which remain in the black for now, leaders are warning that their situation is so dire we might soon be facing "the end of a local government" in the UK. While there might be unique circumstances involved in all of these cases, then, there’s clearly something much larger going on here But, to understand that we first need to take a little look at how local government here in the UK works. But, that’s a job for tomorrow because I am absolutely knackered. We always vote. Women died to get us the vote. We always vote. I think I think the vote’s very important, yeah. People have given a lot of time and effort and some their lives, I suppose, over the years to guarantee what we can do today. I’ve never voted. They all think of the themselves, they don’t think of us. Well, probably the one I vote for will not get in. But it certainly will not be the main parties, because… well, I don’t rate them. For the local election we always go for the same people because they’re so good to our area. They’re so supportive. You can email them, they’ll try and do something for you. S,o we didn’t actually plan to film this video mere weeks out from a local election here in the UK. This video has been on the cards for ages, we just happened to make it now. But, we’ve been in Nottingham City Centre this morning chatting to people about whether they’re planning on voting, how enthusiastic they are about that, what kind of issues really matter to them. And, it’s been a really interesting few hours. We’ve heard a real range of opinions about people who aren’t planning on voting at all, about people who believe it is a kind of fundamental civic duty that they should, people who are really angry at the council, people who have got these really heartwarming stories of councillors helping them out, which has been really lovely too. But, in order to get on with the next part of the video, I first need to come good on my promise to explain exactly how local government here in the UK works. I’m in Nottingham just to the north of where we finished off yesterday’s journey. Of all the cities we’re visiting on this little road trip, Nottingham was the most recent to declare itself effectively bankrupt. And, it’s also the one which begins to point to the larger issues at play here. Unlike Birmingham or Northamptonshire, Nottingham hasn’t befallen any great financial calamity. There are no error-prone computers or council "hubris" here. And yet, the city has still managed to go bust. Like most countries, the UK has multiple tiers of government, with different entities having different powers and responsibilities depending on where they sit in the hierarchy. If that sounds fairly orderly, it’s not. In fact, the whole system is so wildly inconsistent to the point that, depending on where one lives in the UK, one might be blessed with as few as two layers of government to deal with or as many as four. Where I live down in Plymouth, political governance is divided-up between just two bodies. Matters of national importance are decided upon by the central government in London, whilst local matters are overseen by Plymouth City Council. Nice and simple. If, however, you’re lucky enough to live in the picturesque village of Denmead in South East England, various decisions affecting your life will be broken-up between the Denmead Parish Council, the Winchester City Council, the Hampshire County Council and only then the UK Parliament. You get to vote for representatives for all of those bodies and, if you have any issues, you have the additional fun of trying to work out which of those four representatives has the power to do anything about it. To make matters even more confusing, some areas of England such as Nottingham here have recently become part of what are called "combined authorities". This involves neighbouring city or borough or county councils working together to coordinate transport and economic development plans, often under the auspices of a regional mayor. In London, this is actually taken a step further in the form of the Greater London Authority. Led by the London mayor, the GLA has strategic responsibility for life across London’s 32 boroughs, despite each of those boeoughs having considerable day-to-day autonomy in their own right. Meanwhile, Wales, Scotland and Northern Ireland have their own national parliaments which, in those countries, form a separate layer of government between local government and central government in London. And, this is before we even begin to talk about the nine administrative English regions which are used for some statistical purposes, or local Police and Crime Commissioners. All that being said most people in the UK will have either one or two local councils which serve as their primary forms of local government. [Bells Ring] I mean it’s incredibly cool. Those councils might be called city councils or district councils or borough councils or county councils depending on their size and how rural or urban they are. But, whether or not they have a strategic body such as a Combined Authority above them or a voluntary Parish or Town Council which sits beneath, there will usually be one or two bodies which have the largest impact on their lives. But, what exactly is it that a local council does? The role of city, borough, district or county councils here in the UK, then, is very similar to that of city governments in other countries. Where the central government in Westminster retains the power to issue currency, set trade policy, and start and end wars, local city, county, or borough councils are in charge of operating on-the-ground services such as development planning, housing, waste management, libraries, parks, street maintenance, and delivering certain social care and family support services. So, I thought I’d bring you to some kind of council amenity for our second bit of filming in Nottingham. And, we’ve come to the Nottingham Arboretum, which is apparently the inspiration for Neverland in J.M. Barrie’s Peter Pan. See, in the UK, central government actually has a pretty big say in how local councils run the areas they’re responsible for. For one, councils actually don’t get a huge amount of choice in what services they provide. If you look down a list of services which tend to be provided by city and county councils in the UK, you’ll find that some are what’s called ‘discretionary’ services. This means they’re provided entirely at the council’s own initiative. While many councils will provide public parks, leisure centres and museums, for example, there’s nothing to say they have to other than the fear residents might vote them out if they don’t. Other services, however, are what are referred to as ‘statutory services’. This means that the central government in Westminster has passed legislation requiring councils to provide them by law. City governments, for example, are legally required to provide free bin collections; they have a legal responsibility to maintain roads and pavements; and they have a duty to provide welfare and safeguarding services for children and vulnerable adults. Councillors might have some degree of flexibility in exactly how they provide these services, but they can’t simply choose not to. In fact, if you drive through a pothole in the UK and it damages your car, you’re often entitled to claim compensation from the council responsible for that road for failing to keep it in a good enough state of repair. This requirement to provide a minimal level of service is probably a good thing. Turnout at local elections in the UK is notoriously low, and so it’s probably good to have a defence against some mad libertarian taking over a city and deciding to just let vulnerable kids sleep on the street or something. The problem is is that all of this stuff costs money. And, when it comes to raising funds to pay either for these core services or for discretionary services that councillors might want to provide for local residents on top of them, local governments have even less power. But ,if we’re going to make tonight’s Travelodge, we should probably talk about that one on the road to our next destination. This next stop is actually a bit of a detour, but I think it’s really important to visit if we’re going to tell this whole story properly. I mean, I don’t know if I’ve explained how much I dislike driving yet but, yeah, I definitely wouldn’t be adding an extra stop if I didn’t feel it was important. So, there are four main ways in which city and county councils in the UK are allowed to raise money. The first is what’s called “Council Tax” in England, Scotland and Wales or “Rates” in Northern Ireland. These are both property taxes calculated based on the value of the property in which a resident lives. It’s one charge for everyone who lives in a particular property, but there are discounts for people who live alone Depending on where you live in the country and how valuable your house is, council tax might be as low as £763 per year for a cupboard in the City of London or over £5000 for a mansion in Rutland. I think a lot of people understandably assume that council tax covers a sizeable portion of the cost of running a local government. But, this is actually far from the case. If we take the example of Staffordshire County Council, whose jurisdiction we’re currently driving through, we find that council tax accounted for just 37% of the body’s income in the year 2023 to 2024. A further 10% came from business rates, which is another property tax which is similar to council tax but which is charged to businesses with premises within a council’s jurisdiction. Offices, shops, factories, warehouses, bars and cafes can all be liable to pay business rates, which are calculated based on an independent valuation of that property. As with council tax, however, there are again discounts for smaller businesses and charities. An equally paltry 6.5% came from what’s labelled "Other Income". This will include a wide range of income streams from services that the council charges for. Car parking, taxi licences, commercial waste collection… all these services come with a charge and therefore generate a direct income for the council. Now, the maths heads among you will have noticed that these figures don’t come even close to hitting 100%. And, that’s because a full 46.5% of the council’s revenue doesn’t come from locally-raised taxes on residents or businesses, but from grants provided to it from central government. Some of these government grants are pre-assigned and ring-fenced for certain services. More than half of the money that Staffordshire receives from central government, for example, comes in the form of the Dedicated Schools Grant, and this has to be spent on schools. A council can’t simply decide to skimp on schooling in order to spend some of that money on something else instead. Other grants from the government will be much more flexible; with councils being able to allocate them as they see fit. There are some obvious benefits to such a huge chunk of local council’s incomes coming through central government. Spatial inequality runs deep in the UK. The median weekly pay for full-time employees in London is £796 whereas in North East England, it’s just £614. Capturing tax centrally through income tax and the like and then distributing it outward to local councils at least theoretically gives central government the power to soften the effects of this imbalance. That’s not to say they act on that power as much as they should: but they at least could if they wanted. Nevertheless, the combination of such a large chunk of local councils’ funding coming from central government, alongside the fact that that same central government also gets to tell councils what services they should prioritise through that system of Statutory Services begins to place a big question mark over how autonomous local councils really are. All of which would make politicians in London seeking to place the blame for British cities going bankrupt entirely on city governments seem a bit questionable. Because, rather than an unfortunate accident, this enfeeblement of local councils by the central government is very much by design. And our next stop will be able to show us why. I’m in Liverpool, where it is incredibly, incredibly windy. Liverpool has long maintained a slightly distinct political identity to much of the rest of England. Never was this clearer than in the 1980s. Throughout the course of that decade, the UK as a whole thrice elected Margaret Thatcher on a platform of cutting taxes and reducing public expenditure. Many in Liverpool, however, remained deeply sceptical. In fact, in 1983, the city went in the complete opposite direction to the rest of the country, voting in a city council led by Militant, a left-wing faction within the Labour Party which couldn’t have been more opposed to Thatcher if they tried. Where Thatcher sought to open up every aspect of national life to the free market, Militant sought to overthrow it entirely. This animosity came to a head a year later, when Thatcher’s government introduced legislation which placed a limit on the amount of tax local councils could raise from their residents. This served the Conservatives’ agenda in two ways: not only did it reduce people’s taxes but, by limiting the amount of money councils had available to spend, it forced councils to streamline services and thus further reduced the role of the state in people’s everyday lives. Militant-led Liverpool had other ideas. Rather than reducing their spending, the city council unveiled an ambitious programme of activity in which they pledged to build new houses, open new sports centres and provide a greater number of nursery places for children. Crucially, the cost of all this required the council to set a budget in which their expenditure exceeded the income they were due to receive through government grants or through the newly-capped taxes. This was, and is, illegal for a city council to do. Nevertheless, local leaders adopted the slogan that it was “better to break the law than break the poor” by allowing the city to drift into decline. The response from the political establishment was swift. The council’s hope had been that central government would be forged to plug the financial gap in the council’s budget; but Thatcher refused to do so. The Labour Party, who on the national level were under the firmly centrist leadership of Neil Kinnock, enthusiastically denounced the council as foolish idealists and suspended the politicians responsible. If Thatcher had already been keen to curb the power of local government, the Liverpool rebellion only emboldened her further. Her tenure was one of sweeping reductions of the role and agency of city councils. Alongside caps on local taxes, Thatcher also reduced council’s powers over schools and forced them to sell off huge quantities of social housing. This war on local government was partly an economic crusade; but, as the stand-off with Militant Liverpool highlights, there were political motivations at play too. In an ideal world, the relationship between local government and national government would be one of mutual cooperation. But, politicians ever since have tended to view city, borough and county councillors as inherent obstacles to change. After all, it’s no fun sweeping to power with some great vision for how you’re going to change the country only to have that vision frustrated by a bunch of disagreeable councillors in Liverpool or Surrey or anywhere. When the Conservatives were ousted in the late 1990s, it’s telling that the incoming Labour government under Tony Blair didn’t proceed to roll back Thatcher’s reforms. While they did increase local government funding, this came with strings attached in the form of targets and so-called “performance indicators” which councils had to meet to appease Westminster. The lesson learned from Thatcher’s tenure was clear: that local government needed to be constrained and controlled. But, more on that when we reach our final destination tomorrow morning. Morning. Okay, this is our Travelodge for Night Two (the third one is actually for the end of the third day). And, I thought I’d let you into this one because this one comes with its very own podcasting studio. I really could’ve done the interview in here. Like, "What’s your thoughts on local councils struggling for cash?" "Oh, well, I think this and that and that actually" I really think Travelodge could rebill itself as a kind of studio of some description. Okay, it’s actually not raining, which is something. Oh no, it is. Okay. Every time I put my hood up it stops raining and every time I take it down again… Right, let’s get going. [Music] Oh, the parcel’s shelf’s got stuck… [Music] So, with my ability to see out my rearview mirror restored, we headed back down across the breadth of England to our final destination: Woking. We are getting far closer to London than I usually like to be. Although, it kind of feels like it’s correct towards the end of the video to be approaching the corridors of power. Woking. In February 2009, future Prime Minister of the UK David Cameron wrote an opinion piece for The Guardian. Which in itself seems pretty ludicrous now; a callback to an era when conservatives at least occasionally had to pretend to be liberal technocrats rather than solely preaching to a populist base. In the article, Cameron promised that, if he were elected, his government would lead a programme of (quote) ‘radical decentralisation, to reach every corner of the country’. He claimed to have acknowledged the extent to which previous governments had reduced the powers of local councils and to be promising a dramatic reversal of that trend. On the surface, Cameron’s government did appear to come good on this promise. To name just one example, he pushed for a further rolling out of so-called “Metro mayors” to provide strong, identifiable leaders for regions and cities outside London And, this initiative has had more than a little success. In Manchester, Labour mayor Andy Burnham has been able to bring local buses back under city control, to improve support for people sleeping rough, and to develop plans to introduce a new, city-accredited education pathway for local young people who want to enter technical careers. While mayors, devolution deals and other less shiny reforms might have theoretically increased the autonomy of local government, however, the matter of money remains. And, in this, the succession of Conservative Prime Ministers which have held power since 2010 have been far less generous. In fact, according to the Institute for Government, core funding for local councils was cut by 40% between 2009 and 2020. Whatever powers local councils might theoretically have gained, then, they’ve been left with little cash to actually do much with these new abilities. The whole system of “statutory” and “discretionary” services has begun to look ridiculous as councillors have been forced to cut anything which isn’t legally mandated to the bone. Budgets for park maintenance, for example, have been slashed by a third. Funding for local arts organisations has dropped by 40%. 60% of public loos have been closed. And, nearly 400 swimming pools in England have been shut down. Even where councils do legally have to provide a service, they’ve often had to reduce that provision to the bare minimum. Providing a library service might be a legal requirement; but the law is pretty vague about what that service needs to look like. As such, hundreds upon hundreds of libraries have closed over the past decade and others have been reduced to minimal opening times. Similarly, council youth centres which used to cater to a wide range of young people now have to focus their efforts on children who are already in need of intervention. Things were really brought to a head, however, by COVID. Where council budgets were already stretched, the pandemic introduced all kinds of new responsibilities which sent their outgoings soaring at the same time as income through taxes and revenue-generating services like car parks took a nosedive. While the government did provide some additional funding to councils during this period, it was rarely enough to cover the shortfall; and, after 10 years of austerity, there simply isn’t much left to cut. In January, the BBC reported that UK councils were shouldering a collective debt of £97.8 billion. At time of recording, however, central government has refused to provide any additional financial support. Chancellor of the Exchequer Jeremy Hunt, has instead suggested that councils should cut back on diversity and inclusion schemes. Which, given Birmingham’s bankruptcy was at least partly the result of the council there upholding widespread pay discrimination is maybe a little inadvisable. Elsewhere, ministers have allowed councils to sell-off assets such as land, community centres, leisure centres and town halls to try and cover the shortfall in their day-to-day spending. Which really exposes the heart of what’s going on here. For the past decade, Conservative politicians have talked endlessly about the decentralisation of power. First it was “localism”, then the “devolution deals”, then “Levelling Up”. By ruthlessly starving councils of cash, however, Cameron, May, Johnson, Truss and Sunak have essentially forced councils of all political stripes to follow a ruthless agenda of cost-cutting, privatisations and sell-offs. And, the more assets that are sold off, the more services that are transferred into private hands, the worse things are likely to get. But, despite how grim things are (and, they are grim), I didn’t want to leave this video entirely on depressing note. So, let’s round off our trip by going to a town which is trying to do things a little bit differently in a way that doesn’t completely ameliorate the effects of economic downturns or government funding cuts, but does at least seek to bring wealth and most importantly power back to local communities. Welcome to Preston. Preston is a relatively small city of around 150,000 people in North West England. And I will admit… we cheated a bit here. We’re actually filming this on the morning of Day Three, before we go to Woking. But, it felt like a horrigic waste of carbon to drive all the way down to Woking only to drive all the way back up to Preston and then to drive all the way back down to the glorious South West to go home. But, nevertheless, welcome to Preston! To understand what Preston’s been doing differently over the past few years (and why), it’s helpful to understand some of the knock-on effects that the kind of privatisations and sell-offs which the central government has been encouraging councils to perform have in recent years on a town. Imagine you run a council and that council hires a big team of waste-collection staff; folks who get up early in the morning, to drive big lorries round town and collect everyone’s bins. If you directly employ that team, then a large chunk of the money you pay them in wages will get spent locally in your town: on buying food and going to the cinema and doing escape rooms and whatever else it is your fictional waste-collection team are doing in their spare time. But, now imagine you privatise that service; by which I mean handing it over to a private company to run for-profit. A few things happen. The first is that the company will likely look to “streamline” the service being provided to cut costs; as the now-privatised Royal Mail has been petitioning to do by abandoning Saturday post deliveries. The second is that they’ll likely look to employ a new waste-collection team on supposedly “more competitive” terms; i.e. for less pay or, at the very least, on less secure contracts. The third is that all the money that has been saved through this cost-cutting becomes profit which first gets deposited into the bank account of the company which now provides that service and then gets distributed to that company’s shareholders. Particularly where contracts are handed to a big company like Biffa or Virador, both of which are owned by American investment firms, what happens is that money which was previously being paid to local employees who would then spend at least some of it in local shops and bars and bowling alleys is now leaving the area entirely. Particularly in areas which are less well-off and in which public sector employment accounts for a large proportion of jobs, this can contribute to a vicious cycle of civic decline. Since 2013, however, the city council here in Preston began developing a new approach to city governance which has come to be known as the “Preston Model”; or, more broadly, as Community Wealth Building. My name is Martin Rawlinson and I am the deputy leader of the council, I’m also in charge of the finances. It’s a really tough landscape for local government right now and has been for a number of years and it’s not really getting any easier. The finances are very tight: 50% cuts. We’ve got half the staff that we used to have and half the money. We called it a "fairness agenda" at the beginning. It got labelled "the Preston model" by the former Shadow Chancellor John McDonnell some years ago, and that stuck. We looked at what we were spending. And whether we were spending it in Preston or nearby. And, we also got all the local "anchor institutions", which are public bodies which are never going to leave Preston. You know, the hospital, the university, the police, colleges, housing associations. We got them involved, we got them to look at where they were spending their money. And, it turns out they weren’t spending very much in Preston or nearby. So, we developed a program whereby we encouraged this and we doubled our spending in the local economy between 2013 and 2015. And, we looked at all the anchor institutions and they’d increased their spending. And, we trapped an extra £70 million in the Preston economy. Lots of these bodies are spending more money in Preston and the locality. The money circulates that little bit longer in the locality. The fact that it’s in local people’s pockets for longer, the money, means they decide where it goes next. That’s what democratising wealth means. Whereas if it very quickly filters upwards to shareholders and wealthy people then that choice is gone… we have no choice in when or if that money ever comes back. Alongside that, we’ve started to use our assets for public good. So, we’re building a huge cinema complex. Which, the private sector will not come in and do in the city centre. So, we’re doing it on our land. We keep the land and, when it’s all paid for, it will be our building, publicly owned, public wealth, that will still be ours and we’ll have an asset worth x amount that will belong to the people of Preston and not the shareholders, that would normally have been the model. Every penny we spend, every asset we’ve got, all the work we do directly benefits Preston, not some shareholder thousands of miles away. None of this is a silver bullet to the problem of reduced grant funding from central governments. But, Community Wealth Building here in Preston is seeing the council to leverage what power and resources it does have to improve the quality of jobs and services in the city. While many other British cities and counties have been pushed by 14 years of Tory rule into a vicious cycle of cuts and privatisations and sell-offs and civic decline, Preston perhaps provides a glimpse of what could be possible if local governments here in the UK were given the power and funding they need. So, making this video has felt like a real step up. Not only have we added vox pops and interviews to our repertoire, but spending four days on the road has been a pretty massive undertaking. This hasn’t only been the most logistically complex of any of the videos that we’ve made, but almost certainly the most expensive too. I hope all the added time and energy and resource that we put into it has come across in the final product. If you want to find out a little bit more about how this actual road trip portion of the process came together then we’ve put together a behind-the-scenes featurette, DVD extra thing for Nebula in which you can see me come very close to tears as I take a million wrong turnings on Birmingham’s rabbit warren of roads, get really excited about seeing a nuclear power station and also develop a grand theory on the quality of British motorway services. That behind the- scenes bonus video is available to watch exclusively over on my premium streaming service, Nebula. It allows you to watch all of our videos ad and sponsor-read free as well as to get access to a rapidly expanding roster of exclusive films and series too. If you’re into city governance and urban planning, then you’ll be absolutely spoilt for choice. We recently overhauled how navigation works on Nebula and added really clear categories and urbanism is a whole section, with videos from City Nerd, R.M. Transit, City Beautiful and many, many more. I also recently announced I’m about to start work on a Nebula Original feature called Boomers. I’ll be popping my camera in a suitcase and traveling around Europe and North America to explore how the Baby Boomers changed the world for better and, you know, sometimes maybe a lot worse and to explore why age so often today seems to equal wealth and power. I’ll have a little bit more to reveal about Boomers soon but, in the meantime, if you’d like to support me to make high quality (hopefully!) ambitious videos like this one then you can do so by signing up to Nebula using my personal link go.nebula.comm/tomnicholas This gets you access to 40% off an annual subscription, bringing the price down to just $2.50 a month. Or, if you don’t want to add another recurring fee to your monthly budget, then you can also get access to a lifetime subscription at the moment too. We first experimented with this back last year as a way to raise a bunch of money to fund prestige original work like Boomer’s, Jet Lag: The Game and Patrick Willems’ great Star Wars Holiday Special. The link to check all of this out and to sign yourself up for a lifetime, annual or monthly subscription to Nebula is go.nebula.com/tomnicholas