Localising Prosperity – a short film

We are delighted to launch our new Localising Prosperity video – a seven-minute film exploring better ways to do economics.

Through four projects that exemplify aspects of the Localising Prosperity approach our film shows how we can create an economy which is lively and diverse, meets local needs with local resources, & in which more people have a stake.

Our thanks to all the contributors involved in making this film (see more below). Please share it widely!

Thanks also to our film-maker, Susan Jones of Redhead Business Films and to our funder the Barrow Cadbury Trust.

In such a short film we’ve not had space to fully describe the featured projects and who is behind each of them, so here’s a quick round-up and some useful links:

The New Hospital: anchoring prosperity in the community

This is about ensuring “anchor institutions’ like Sandwell & Birmingham’s new hospital (leaving aside current concerns about Carillion!*) has the maximum positive impact on local people, by ensuring that retail options, procurement and related services are locally sourced and employ locally wherever possible. The organisations working on this – Sandwell Council, Citizen Home, Localise West Midlands and Smethwick CAN amongst others – are proposing that one of the hospital’s retail units is taken by a social enterprise shop  that could not only sell locally produced goods but act as a “concierge” type service for busy staff and visiting families, to access the services they need from local businesses.

Thanks to Conrad Parke, Martin Hogg, Karen McCarthy for appearances in this one.

*UPDATE: although the Carillion failure means a new developer will need to be found for the Midland Metropolitan Hospital, the work of the USE-IT! project in Ladywood, Soho and Smethwick will continue, as it relates to those areas rather than the hospital itself.  For anyone directly affected, there is advice here, a general helpline 0800 063 9282 and a helpline for Black Country businesses: 01902 912322.

Inclusive business support ecosystems in Balsall Heath

Citizens UK and the Centre for Research on Ethnic Minority Enterpreneurship have been working together with business people in Lozells, Small Heath and Sparkbrook to achieve better engagement with support agencies, aiming to generate an inclusive business support ecosystem in these areas. Nayer’s jewellery business is one of those involved. Thanks to Moses Dakurivosa and Nayer Khan-Farrukh for contributing here.

Energy Capital – local business innovation for social good

Headed by Matthew Rhodes, Energy Capital is about collaborative sector development, in which energy innovation delivers on the needs of real people and the environment, and policy shifts support it to do so, with locally owned businesses  involved at every level. RentE Cars is on of the local businesses that is ‘driving’ (forgive the pun) and taking advantage of electric car charging innovations. As well as Matthew we are grateful to Rob Jolly and Waqar Bukhari for taking part in this one.

Social care: an opportunity for inclusive economics?

Our final case study is about how social care, rather than being a problem, can be a positive force for inclusive economics that could help the West Midlands Combined Authority achieve its stated aims of sharing prosperity more widely – as a report by NEF for LWM outlines. The “foundational economy” is made up of the things society really needs, social care being one, and deserves a closer economic focus. Built around adaptable, small scale and community enterprises, social care may not provide conventional ‘growth’ but could have a huge impact on local jobs in places where they are needed, providing something we all need and care about. Crossroads Care is an example of a locally accountable and adaptable enterprise delivering care and economic opportunity. Our thanks to Christine Christie, Graham Evans, Carol Glover and her mum, and Joanne Ferguson for their time.

Together these stories show some of the ways that communities can have greater economic power and prosperity.

If you’re interested in our approach try our Localising Prosperity webpages for more information.

Karen Leach

 

 

The Centre for Retail Research – some common ground?

The Centre for Retail Research (CRR) has provided authoritative research and analysis of the retail and service sectors for twenty-one years in Britain, Europe and North America and is completely independent, not funded by the retail sector or suppliers.

In an article on its website, a ‘recalibration of policy’ is advocated.

Themes relevant today:

  • Create a comprehensive industrial strategy, based on local needs and using local knowledge.
  • Replace imports and create the vital supply chains needed by British business.
  • Build housing, potentially a provider of 1mn new jobs and a swift way of improving the living standards and opportunities.
  • Increase the focus on learning science, maths, technical subjects and foreign languages;
  • Abandon the current emphasis on university as the only useful goal for young people;
  • Increase vocational training, retraining and part-time study for adults.
  • Renew concern for manufacturing industry and jobs rather than focussing only on retail, service industries, banking and the City of London.
  • Legislate for government permission to be required before a significant UK business is bought by a foreign company.

Localisers would find some common ground here.

*

CRR’s retail recommendations:

  • A level playing field where online businesses face the same levels of corporation tax and property tax as does retailing through stores.
  • Higher wages for retail workers and better jobs, which will probably mean fewer jobs, more automation and perhaps fewer stores.
  • Reform of Insolvency laws to ensure that creditors, employees and pensioners are better served than they are at present by legislation designed to keep failing companies alive.

And the summary of a Localise West Midlands exploratory report (2008-9) expresses the value of independent retail:

Retail plays an essential role in a localised supply chain of food and other goods; ‘walkable’ retail builds social inclusion and reduces the need for the car; social capital and local multiplier are stronger in a town centre full of independent shops, and local distinctiveness is another benefit”.

 

 

 

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Birmingham’s budget dilemmas: defences against the vandalism of austerity

I’m just looking at the Birmingham City Council service reviews and budget consultation to make Localise West Midlands’ response – emphasising ways in which the Council can maximise local multiplier to reduce its whole system costs.
As a citizeSaveMRBn it’s incredibly frustrating to see the city forced into making such ridiculous choices. In my own area the likely closure of the much loved Edwarding swimming baths is painful to think about, but I know this is mirrored by similar swimming losses and threats to other vital local facilities across the city.  Then, talking to officers,  it’s clear that many of the procurement staff who were dedicated to maximising local returns from procurement are no longer in post: the cost saving of each salary needs to be set against the value of the contracts they would have brought in to the local area. I don’t think Birmingham City Council are yet calculating net costs and gains in this way, but hope I’m wrong.
Then of course there are the few who are still convinced by the false economy logic of the austerity agenda. In the collated responses to the inclusive economy part of the service review, I found the following perplexing little extract – albeit thankfully a lone voice:
“I object in the strongest terms to the whole idea of an inclusive economy. Do not spend my money on “addressing inequalities ” because you should treat all your residents equally. Every time you redistribute wealth you are incentivising dependency and failure. Your review has missed the point. Let people alone and they can work their way out of poverty. If you ‘ensure’ people have ‘skills and opportunities’ you are just going to treat them unequally and that is wrong. I think the review is deeply biased to outdated socialist notions and you need to modernise your approach.”
Someone obviously doesn’t quite understand that the inequality status quo didn’t arrive by laissez faire but by public intervention of the wrong sort.
Worth posting to demonstrate why it’s important to have some more progressive engagement with this agenda!
By contrast, Enfield Council are tackling the same set of problems by mobilising pension funds and persuading companies with large local markets to employ local people, and Preston Council are promoting employee buyouts to safeguard jobs and increase local control over the economy. Further afield, the advantages of municipal utilities are being rediscovered.ShitCreekPaddleStore Plenty of scope for Birmingham to learn from these and take them to a new level.
So – despite the vandalism of austerity, there are things we can do….
Karen Leach

Lincolnshire Co-operative’s local multiplier is evaluated

Localise West Midlands argues that small and medium locally based businesses, including those who may be part of a larger national franchise, have a greater ‘local multiplier effect’ on local communities, increasing the community’s prosperity directly, as well as creating comparatively high numbers of jobs.

In summer 2012, Lincolnshire Co-operative, an outstandingly well-run society, used the Local Multiplier 3 (LM3) to measure the local economic impact of its operations on Lincolnshire. The process was sponsored by Co-operatives UK and economic analysts K2A evaluated Lincolnshire’s project.

LM3 study coverLM3 methodology is set out in The Money Trail, a handbook published by nef in 2002 and authored by Justin Sacks, now with K2A; Justin advised LWM on the workshops following their 07 report for Birmingham Strategic Partnership, ‘Developing Sustainable Procurement in Birmingham’.

His evaluation of Lincolnshire’s project was published in a booklet Sticky Money (left), which can be downloaded here.

Research by K2A followed the money spent by customers of the Lincolnshire Co-operative and found that it increased in value by going to local suppliers, to customers as a dividend and to employees in wages, who in turn spent a proportion of their money locally.

On conservative estimates, using internationally accepted benchmarks, the co-operative generated an additional £40 for the local economy for every £100 spent by a customer, rather than generating profits for outside investors and global suppliers.

The study referred to the money generated for the local economy by Lincolnshire Co-operative as ‘sticky’ – because after being passed on to suppliers, employees and customers it passed through local people’s hands five times, generating local wealth and jobs in the process.

In addition, £5 million a year, that would have gone to external investors in a conventional shareholder business, is distributed to the 205,000 owner members of the society in Lincolnshire as a dividend, which can be spent locally again.

Local food lincs4

Lincolnshire Co-operative sustains 2,800 local jobs in all parts of the business, using more than 600 local suppliers, 47% of which see their contract with the co-operative as a significant part of their business. It supports small local suppliers by helping them to grow their business to a scale where they can supply a large retail operation; where some local businesses supplying Lincolnshire have faced closure, the co-operative has stepped in to save the jobs and business. 

As Ed Mayo, Secretary General of Co-operatives UK said: “Every pound spent in a co-operative shop is a real boost to the local economy. In fact, every pound spent in a co-operative store changes hands five times, at diminishing levels, until the final penny leaves the local economy. This adds a wonderful life to any local community.”