Headlines: August 12th, 2005

Nef, the independent think-and-do tank that challenges mainstream thinking on economic, environmental and social issues, has called for more public spending to be directed at developing local economies. It sets out ways in which the public sector can use its purchasing power to deliver local economic development.The UK public sector spends 125 billion pounds per year on delivering goods and services and if just 10 per cent more of spending was directed into the country’s most disadvantaged areas, this would amount to 12.5 billion pounds of income in one year. This amount is more than 17 times the UK’s annual spending on regeneration, which is 725 million pounds. Public bodies including local authorities, hospitals, and schools can deliver both regeneration and savings targets by developing solutions to local problems that promote local economic linkages.

The Nef report ‘Public Spending for Public Benefit’ argues that those responsible for procurement need to re-think their role in promoting regeneration and approach service delivery in a different way. Local public bodies need to change their practices to open the playing field to small businesses and take a proactive role in developing supply chains that deliver cheaper services.

The report quotes examples of public spending promoting the local economy. The Cornwall Food Programme generates 47,000 pounds more per year for the regional economy by sourcing higher-quality local ice cream that costs the same as national alternatives with less nutritional content. Lincolnshire County Council saves over 70,000 pounds per year by working with a local community woodland to provide alternative youth education. Liverpool City Council responds to 70 per cent more bulky-waste-removal calls using Bulky Bob’s for less money than it previously delivered using a national company. Northumberland County Council re-invests 1.5 million pounds per year in regional food suppliers by supplying county schools with fresh food.

Link: http://www.neweconomics.org/gen/uploads/4oj3gb55yxhg54555awtyey001082005100445.pdf