Anchoring community wealth

Preston’s skyline: Carl Ji, a Chinese student, at the University of Central Lancashire

Austerity has been devolved to local councils and, perversely, areas with higher levels of poverty have been hit hardest, councils have on average faced 40% cuts in their budgets.

In the face of adversity councils such as Preston have responded by bringing together anchor institutions and working with them to drive through a local programme of economic transformation. The government’s Commission for Employment and Skills defines an ‘anchor institution’ as “one that, alongside its main function, plays a significant and recognised role in a locality by making a strategic contribution to the local economy” and ‘tending’ to be non-profit.

By changing their procurement policies, these anchor institutions were able to drive up spending locally protecting businesses and jobs. They are looking at the council pension fund to see if its investment can support local businesses keeping the money circulating in their town.

A study by the Centre for Local Economic Strategies found that six of the anchor institutions in the area are now spending 18% of their budget in Preston, up from 5% in 2013. So an extra £75 million a year is being spent within the city, with the top 300 local suppliers creating an extra 800 jobs last year alone. And others are watching: Manchester city council has now increased its local spend from 44% of its budget to 70%; Lowestoft and Salford are also interested.

Last year this blog reported that Birmingham City Council was to work with Centre for Local Economic Strategies, with funding from the Barrow Cadbury Trust and support from Localise West Midlands, to see how anchor institutions in the non-profit and private sectors, including Birmingham University, Pioneer Housing and the QE hospital, could use their spending power to increase economic opportunities for Birmingham’s communities, businesses and citizens. Read more on the council website here.

In a separate project, Localise West Midlands has been working with the Midland Metropolitan Hospital (under construction, artist’s impression) which will be the closest adult hospital to the centre of Birmingham. The Sandwell & West Birmingham NHS Trust and LWM are partners in Urban Innovative Actions supporting the development of the local economy. The Trust hopes to spend 2% of the new hospital’s annual budget with local suppliers, adding £5-8m to the local economy. It will provide locally sourced meals and the builder has a target of 70% local employment, aiming to source 80% of construction materials locally.

Alice Thomson in The Times pointed out that making a legal requirement that councils buy and hire goods and services locally is banned by EU law at the moment, so it should be noted that the Preston project operates on a voluntary basis.

She commented: “The government should take the idea and encourage it, particularly in hollowed-out market towns where out of town shopping centres have crushed their sense of identity” adding “But (procurement policies) could also be used for more high-profile programmes such as the rebuilding of Big Ben, where the steel has had to come from Brazil, Germany and the United Arab Emirates, or the V&A which showcases Britain’s greatest designs but where the tiles for the new forecourt came from Holland”.

 

 

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Localising Prosperity? See Localise West Midlands’ new website

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On the Localising Prosperity website, Localise West Midlands asks if you want to maximise the benefits of economic development in your area: “Do you want a socially inclusive, redistributive, prosperous economy?”

This is about localising prosperity for everyoneby integrating community economic development into everyday business. About understanding and building upon an area’s existing strengths so that it can develop from within – maximising the local economic and social benefits for all. To learn more, go to the new website.

It’s a private, public, social and for-profit agenda.

It can be used within public bodies, community groups, private businesses, local enterprise partnerships, Chambers, Business Improvement Districts, thinktanks and the voluntary sector anyone who wants to play a role in making places better and sharing prosperity.

There is a “virtuous circle” relationship between more locally owned businesses, more local power, better social outcomes and greater prosperity:

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LWM’s research concluded that higher levels of small business and local ownership lead to higher levels of economic success, job creation, social inclusion, civic engagement, well-being and local distinctiveness, and this virtuous circle explains how.

So we can realise local economic power rather than handing it to ‘absentee landlords’ i.e. distant private and public sector owners with little understanding of the local area.

Localise West Midlands secured funding from the Barrow Cadbury Trust for 2013-14 to develop this work, building on their 2012-13 research findings and generating practical outcomes from the approach.

Graham Young’s account in the Birmingham Mail quoted Professor David Cannadine: “The Barrow Cadbury Trust has been both an exemplary and a pioneering charity, especially concerned with social improvement, social justice, peace and reconciliation.” Many local people will remember the founders’ son, Paul Cadbury, who furthered these causes, chairing Birmingham’s Research Committee, which published a 1941 document called ‘When We Build Again’, a visionary attempt to look beyond the Second World War towards rebuilding the city.

Localise West Midlands is one of several organisations working to rebuild and rebalance the economy.

Exploring the systems by which we organise our livelihoods

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In this Barrow Cadbury Trust blog, the co-ordinator of Localise West Midlands gives feedback on the opportunity to research the assumption at the heart of Localise West Midlands’ mission offered by the Trust.

The assumption is: “. . .that in a more localised economy, more people have a stake, which redistributes economic power and resilience, reducing disconnection and inequality . . . in need of exploration in the face of growing inequality and economic failure”. She continues:

“There are plentiful ideas around what we have been calling community economic development: social inclusion as CSR, community-led job creation, co-ops and social enterprises, local procurement initiatives. To many economic development practitioners these are very nice projects that go into a little box labelled “voluntary sector” and have little to do with the real economy, which is about big sites, tax breaks for multinational corporations – “prostituting ourselves for inward investment” as the Centre for Local Economic Strategies‘ Neil McInroy colourfully puts it.

“Our project, Mainstreaming Community Economic Development, is an attempt to take localised economies out of this little box. Firstly, to see the social potential not only of voluntary sector initiatives with social objectives, but also of private sector activity that is locally controlled and based, where the community’s participation is as owners, investors, purchasers and networkers . . . ”.

To read the whole article go to the Barrow Cadbury Trust blog