Over the last month we have seen local government accomplish things which just weeks before would have seemed the stuff of fantasy: a huge redeployment of staff and the repurposing of buildings, fleet and supply chains to supply critical goods and services; and the creation of new welfare, employment and business advice services to name but two.

In this work, councils have acted to protect communities where the market economy and an overcentralised state has woefully failed. In this, they have shown a willingness to:

• Intervene, acting directly in those parts of the economy on which we all rely for our survival and wellbeing.
• Collaborate, to break down barriers to empower, coordinate and upscale citizen action and innovation, jettisoning vertical, managerial bureaucracy.
• Act, at pace and scale.

These achievements must rightly be celebrated. However, the key task is to ensure that these are not exceptional responses to exceptional times but instead foreshadow a transformation in local government.

The challenge of economic recovery from COVID-19 cannot be one of resuscitating local economies as they functioned in January 2020. It is becoming abundantly clear that local economies have already suffered permanent damage – in just one month of lockdown, jobs have been lost, businesses have collapsed and whole sectors are on the brink. There can be no doubt, the current crisis has laid bare the fragilities of our national and local economies and the brittle state of the public sector following a decade of austerity.

As the economy is battered by the pandemic, the very real risk is that this dysfunction will be magnified in the scramble to get people into jobs no matter how secure or well paid, as those generative local businesses that make economies flourish are lost and the race to recovery enables subsidies for the big beasts of the corporate world. The mainstream economic development practices of the pre-Covid-19 period offer little to these challenges and cannot provide a road map for the task ahead.

CLES has recently published two papers outlining how the coming economic recovery effort must bring about a reformation in local economic development, with the practice of community wealth building at its heart. Underpinning community wealth building is a drive to replace extractive models of wealth ownership – those companies whose business model relies on maximising profits to distant shareholders – with locally generative, democratic forms of wealth ownership. The present crisis makes the case for community wealth building all the stronger, just as it strengthens the potency of the challenges to which it is a response. The first of our papers – written in collaboration with the US-based The Democracy Collaborative – makes this case.

In the second paper, we outline a framework for action – taking in three phases of response.

• Rescue - concerned with acting to ensure basic needs and critical supplies are produced and distributed and workers and businesses are protected from the impact of the public health crisis.
• Recovery – in which local authorities must ensure that as direct state support is reduced, transition arrangements support the survival and growth of locally rooted, socially productive businesses.
• Reform - building on these to drive radical change through intervention, using the full agency of local government to replace businesses that extract wealth with those that generate it.

For each phase, we make suggested actions for local authorities – based on the work we have seen emanating from councils in this immediate rescue phase and drawing on our decade of practice with local and regional authorities across all four nations of the UK.

Recovery from the pandemic is a fork in the road. Taking the right path will see local government return to its rightful place as an agent for growing local, socially rich economies, with fair wages, cooperative ownership models, more local enterprise, greater worker control, and genuine social value and environmental responsibility. The choice of which path to take is not simply for local government – it will require a profound financial and constitutional reset of the sector's relationship with central government. This prize is enormous: The interventionism we have seen in the past month, the new partnerships with citizens which enable them to run more of the economy and the ambition and determination to act at scale are welcome glimmers of a long overdue emergence of a new municipalism in the UK.

Frances Jones is associate director of CLES