It’s the ‘local’ economy stupid!
With so much coverage of the American electoral process it’s hardly surprising that when you start to think about some of the complex issues facing local government your mind reverts to some of the soundbites used across the pond.
However, it wasn’t Obama’s ‘change we can believe in’ that sprung to mind for me, but one of Clintons - and not Hillary’s but Bill’s.
John Healey’s announcement of the consultation two weeks ago on placing a responsibility upon upper tier local authorities to understand their contribution to local and sub regional economies set me thinking about the ‘comeback kid’s’ famous 1992 statement of ‘it’s the economy stupid’.
In my view, the Government’s proposals are a logical extension of the place-shaping agenda, by measuring the effectiveness of a council’s performance in not only tackling deprivation but in helping create prosperity for local communities. Whilst the ‘Prosperous Places’ paper focuses on sub-regional economies, vibrant local economies are essential in helping to meet sub-regional targets for jobs, skills, housing and transport.
APSE and CLES are currently finalising a major piece of research on ‘the economic footprint of local government’ that demonstrates how significant this expenditure can actually become. By using Swindon Commercial Services as a case study for a variant of the local economic multiplier 3 model we have examined the contribution the in-house service makes to Swindon’s economy.
Early indications are that Swindon Commercial Services spends approximately £66m per annum, with 49% of this going on supplies and just over 36% on employees. With 96% of employees having a Swindon postcode and 32% of suppliers having local addresses, we felt it important to also measure respend in the local economy.
We found that the money sub – contractors and suppliers spend on local staff and their own supplies generates a further 30.8p, with the 1021 directly employed staff spending on average 52.5p in the local community. This means that for every pound Swindon Commercial Services spends, £1.64 finds its way into the local economy.
Using this as a baseline and then deploying a range of measures such as community benefits clauses that, for example, encourage contractors to use local labour in construction projects, could prove to be a real boon in coming years. If you improved that ratio of expenditure in the local economy by 10%, the knock on effect on local prosperity would be highly significant.
Its early days for the research and we will be finalising it prior to publishing our final report. But one thing it does tell us is that it would be stupid not to recognize the contribution that local authorities make to the local economy.
