Tech co-ops circulating cash in Finsbury Park to combat offshore ‘wealth extraction’
PUBLISHED: 09:42 17 July 2019 | UPDATED: 10:40 18 July 2019
A Finsbury Park co-operative picked as Islington’s first genuinely affordable workspace provider will nurture tech start ups to share wealth in the community.
Islington Council has chosen digital agency Outlandish to run Space4 in Fonthill Road, where a new generation of tech co-ops will contribute social value by hiring and training people from the area.
The town hall has purchased a long lease on the property and has given it,on a peppercorn rent, to Outlandish, which has already set up 10 tech co-ops in the past two years at it's adjacent HQ.
In return, the workers co-op will create a "tech for good" workspace to boost employment and enhance Islington's lucrative digital sector, while ensuring profits circulate locally instead of being extracted by monolithic multinationals.
Space4 was unveiled on Friday at an event attended by Jeremy Corbyn and Preston Council leader Matthew Brown, whose authority's work with co-ops helped inspire the town hall.
Speaking after the event, the Islington North MP told the Gazette: "The [Finsbury Park] ward in which Space4 sits is one of the most deprived in the borough but it is also a place with sense of community and determination.
"This spirit embodies the work that Islington Council have carried out alongside Space4 in creating a co-working space for local co-operative tech businesses.
"By providing low-cost rent, new businesses and ideas can thrive in Islington as well as providing training and jobs to the local community. Through worker ownership, we can create a thriving local economy in which money is circulated around our community, not extracted by companies registered in far-away tax havens. We want an Islington economy that works for the many, not just a few."
Islington Council matched the £1million provided via the mayor of London Sadiq Khan's Good Growth Fund to purchase the Space4 premise. Crucially, this money hasn't come from the council's core budget but rather through past donations made by developers in Section 106 agreements. These planning agreements are meant to offset the negative impact of housing developments, but are proscriptive about how the funds can be used - for example, cash couldn't be spent on schools or social care.
Islington Council's tough planning policy now sees it dictate that 50 per cent of any new housing development is genuinely affordable. It would rather this threshold was met than take payments to counterbalance the disadvantage of a luxury block of flats springing up in valuable space during a housing crisis. Similarly, the council has used its planning clout to demand affordable workspace in new developments. It has secured about 4,000 square meters of office space at low rates this way in recent years.
Many developers would prefer to give the council cash than meet its quota for affordable housing and workspace because they can make more money from market rents.
Islington's economy chief Cllr Asima Shaikh said: "This is our first, really positive, action to support the setting up of co-ops.
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"If you look at the economy, it's structured in an unequal way where large corporations make profit and pay low wages. It's not democratic - it's someone else making decisions about the local economy. We think wealth should not be centralised in few hands.
"We think it's more democratic for people to gain control over their work and how they earn their incomes."
By embedding social value in it's workspace contracts, Islington Council can dictate firms employ more women and people from BAME backgrounds, while also encouraging start-ups to take on young people from the community.
Cllr Shaikh argues there's no clear "skill pathway" into tech sector jobs, making it easier for youngsters who aren't academic to excel so long as they have aptitude.
Other worker-owned models being supported by the council are social enterprises and charity sectors.
Cllr Shaikh hopes these workspaces will counteract gentrification in the area.
"We are not working from a model of deficit," she added.
"We do not think Finsbury Park is lacking. Our people and existing businesses are more than good enough. We just need to support them to thrive and grow."
After the event, Preston Council Leader Matthew Brown said it was "the beginning of strong collaboration between Islington and Preston to build richer communities."
Outlandish's Polly Robbins, manager of Space4, told this paper: "From our point of view obviously it's amazing to have been awarded a new building to continue what we already do - and do it better. Off the back of our partnership with Islington Council we are further developing relationships with the local community groups and businesses, and also supporting more independent businesses to become resilient and be able to use and understand tech well."
Outlandish aims to help found a minimum of five tech co-ops per year at Space4.
The idea is the incipient co-ops will stay at Space4 for stints of about a year or so, or however long it takes for them to grow and become independent, before they then move out and make space for a new wave of start ups.
Islington's affordable workspace strategy ties is informing Labour's national Community Wealth Building Unit, which Cllr Asima Shaikh sits on.
Over the past 18 months the unit has brought together councils, such as Islington and Preston, with unions, think tanks (like the New Economics Foundation) and Industry experts to discuss ways to create sustainable local wealth.
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