The issue is not necessarily that too little money flows into a
neighbourhood. Rather, it is what consumers, public services and
businesses do with that money. Too often it is spent on services with
no local presence, and so immediately leaves the area.
Our starting point is the energy for changing the local economy from
within a community, and the natural resourcefulness, skills and
passions of local people.
The principle behind this approach is that
people who live and work in a place, and others who care about its
future, are best positioned to find enterprising solutions, implement
them and reap the rewards.
In many places, local energy and creativity become trapped, and
different parts of the economy - local businesses, voluntary sector
agencies, and the public sector - do not talk to each other to maximise
local opportunities.
For the local economy to undergo durable and
robust change, the capability and energy of everybody needs to be
harnessed.
We believe that promoting and supporting local enterprise should be
part of any strategy for economic regeneration.
Local enterprises are
more likely to employ local people, provide services to improve the
local quality of life, spend money locally and so circulate wealth in
the community, promote community cohesion and, by reducing
transportation of goods from across communities, are likely to have a
smaller environmental footprint.
The approach also recognises that
communities do not develop their local economies in isolation.
How do we recognise sustainable local economic development?
A plugging the leaks approach is built around supporting
community-based action towards developing a more sustainable local
economy. This we describe as having the following outcomes:
Diverse range of businesses and enterprises in terms of size,
social & private mix, and diversity of goods and services produced.
Positive local money and resource flows
(a high local multiplier and local re-use of waste).
Strong local asset base including local people's attitudes, skills and knowledge; physical, financial and natural resources.
Responsive public and business sector which is working to strengthen and invest in the local economy.
Strong community & civic voice including local activism, leadership, volunteering, and engagement in debate.
Sustainability and a reduced environmental footprint.
Increased understanding of economic, cultural and ecological
inter-connections that link communities, span the globe and impact on
the future.
nef uses the metaphor of a leaky bucket
to open up conversations in communities about a local economy and money
flows into and out of that community.
We explain the local economy as a
bucket with water being poured into it - to represent for example
tourism spending, local school budgets, benefits or salaries of people
living in the area. Then we consider all the ways that money then leaks
out of the bucket, such as taxes, utilities, and purchases of goods and
services from outside of the area.
In a plugging the leaks approach all those outflows of money are
potential enterprise opportunities for people. It builds up a
community's confidence in its own ability to determine its economic
destiny; to make decisions about how the community wants the local
economy to develop. We then support that action through a coaching
approach, drawing on local networks of support. In deciding on what
actions to take forward, it is important that the local economic,
social and environmental impact is understood - the impact on the
triple bottom line.
Within a community a plugging the leaks approach supports a move
from an awareness of opportunities to taking action by exploring four
questions:
What are the opportunities for enterprise development of both new and existing businesses - What do we want to do?
How could goods and services be delivered differently - to keep money circulating locally, and reduce waste?
How can we mobilise resources to do what we want to do?
Will these actions result in positive local economic, social and environmental outcomes?
Suppose you paint a pound coin red and watch where it goes. Every
time it changes hands within a community, it means income for a local
person. The more times it changes hands, the better for that community.
In fact, money that is re-spent in a local area is the same as
attracting new money into that area. Either way, it is new money into
the hands of the person who receives it. This is termed the local
multiplier.
In addition to considering money flows, we also look at how other
resources such as energy, water and consumer products flow into a
community (their source) and how they leave that community (the waste
created) to find enterprising ways a community could reduce their
impact on the environment.
Within the public sector (State sector, and other institutions), a
Plugging the Leaks approach supports this sector to open up local
employment and business opportunities in the way they contract and
deliver capital projects, and purchase goods and services.
