Connected local economies Understanding local economies and local economic impact

Challenge The current economic system: »Unsustainable »Unfair »Unstable Well-being

Living within environmental limits - Resources - Money - Decision making - Institutions Economic activity at a scale to maximise social, environmental benefits. Well-being Ultimate goal

Adaptation & local economic opportunities Supporting and shaping the structure of the economy for long term benefits Environmental transformation of infrastructure  Energy – saving and generation  Transport  Waste management  Food systems Focus:  Reducing reliance on fossil fuels  Reducing negative environmental impact  Seeking positive economic, social and environmental outcomes from how delivered

The problem is not necessarily that too little money flows into a community. Rather it is what consumers, public services & businesses do with that money. Too often it is spent on services with no local presence, and so immediately leaves the area Need to make money work harder locally

Value of local spending Marsh Farm, Luton: est. £58m spending power locally, £21m on home expenditure – 90% spent outside the estate. Including £1m on takeaways. Sleaford, Lincolnshire: est. £38.2m available to spend on consumer goods annually. 70% of this money is currently spent outside of Sleaford. Manchester City Council: Tracked their spending of top 300 suppliers (of a budget comprising £600m revenue and £300m capital expenditure per annum) Found: 86 per cent of spending are with businesses based in greater Manchester area Reduces to 55 per cent for suppliers ranked 301 – Can use this data to understand the local enterprise and job opportunities available within the city region if these supply chains become more localised. What actions can be taken to retain wealth in economically disadvantaged areas.

Housing associations £10bn. annual turnover TSA Global Accounts of Housing Providers 2010 Annually invest over £435 mn. in community investment activities...made up of £272 from own funds NHF Neighbourhood million (56%) social housing residents of working age are not working. DWP % of housing associations offer support / work opportunities to residents – mostly as separate to considerations of mainstream spending. HACT 2012 survey

Circulating Pound - The local multiplier effect It’s not just where you spend your money that matters It’s also important where the people you spend it with - then spend it

LM3 - Measuring money flows Purpose: To measure the impact of spending locally Can be applied at local (self-defined) and regional level LM3 (Local Multiplier 3): Adapted from Keynesian multiplier Measures how money is spent and re-spent locally to 3 rounds of spending to determine local economic impact Applied to: Municipalities, Organisations, Projects, on Contracts or whole organisations

Construction – Norfolk district council S ea wall C ar park Local Non-local Round 1£ 72,000£ 120,000 Round 2 £ 57,600£ 20,400 Staff 24,480 0 Suppliers 33,120 20,400 Round 3 £ 24,980£ 6,760 Staff 17,038 0 Suppliers 7,949 6,768 Total £ 154,580£ 147,160 LM Practical tool to measure local spending (LM3)

Increasing LM3 - What to think about  How many of your staff live in the local area?  How could you address local staffing issues?  Where are your suppliers located?  How much are your suppliers spending locally?  How could you improve local sourcing decisions?  Are there supply chain gaps?  Will changes you make matter? How could goods and services be delivered differently?

Every way housing associations spend money has the potential to: Achieve sustainable economic development aims. Open up local employment and business opportunities. Generate positive local economic, social and environmental outcomes.