Behind the Leaflet III – Jobs AND Profits

I’m running out of time now before the elections (Vote for me!) – so this’ll be the last post in this series spelling out the bullet points behind my election leaflet:

“Commit seriously to local procurement, supporting local business and jobs, and keeping what money it has in the county
“If NCC decides to outsource – contract to local businesses, keeping both jobs and profits in the county”

The ‘jobs and profits’ tag is a paraphrase of the New Economic Foundation ‘Local Multiplier 3’ (LM3) which they actually developed with Northumberland CC a while back. Basically it argues that money spent with local businesses rather than with national or international companies (eg local shops and supermarkets) – because the wages, procurement and profits of local businesses are three times more likely to stay in and be ‘recycled’ the local economy than (at least procurement and profits) spend by nationals and multinationals. Relatively speaking, the big companies effectively drain money out of the local economy. 

So – even on a tight budget, NCC has a lot of money to spend in its operational budgets – we’re not talking about job guarantee funds or anything here – we are just talking about the money NCC spends on its day to day functioning. The more of that money that is spent in the county – or at least in the region – with locally owned businesses, the better the local and regional economy will be. The variously Development Trusts across the county are potentially particularly good vehicles for local service delivery.

And – if NCC does continue down the route of commissioning, contracting and outsourcing services and functions rather than keeping them in house – it’d create and protect  ‘more and better jobs’ (to borrow a phrase from the North East Independent Economic Review) if it commissioned local businesses rather than national and multinational conglomerates to take on the work. Creating and supporting local businesses is the only way out of the ‘branch economy’ mentality which has dogged the North East for well over sixty years and led to many ill-conceived ‘inward investment’ schemes. 
And better still – since a lot of businesses taking on outsourced work employ the people that have been made redundant by the outsourcing process, because they are the ones with the expertise – they know the job – NCC should make advice on in setting up businesses – better still cooperatives or social enterprises - part of their well-honed redundancy package. 

Unitary Proposals could export jobs

A couple of years ago, Northumberland County Council carried out some groundbreaking work on local procurement with the New Economics Foundation.
This “LM3” study showed that money spent on procurement with local businesses benefited the local economy by three times as much as money spent with businesses outside the area.
And yet, proposals for the new unitary authority suggest outsourcing service delivery to a joint company shared with Cambridgeshire and Hampshire, likely to be based in Hampshire.

Outsourcing may possibly save money for the council but if it exports jobs and drains money from the county then its going to cost the local economy far more than is saved.

In fact, I’m surprised that the NE Chamber of Commerce is supporting proposals which could do so much damage to the local economy quite so strongly.

The County Council have a good reputation for local procurement and supporting social enterprise. The District Councils have some very good teams in place delivering high quality services, which are likely to be broken up in the restructure.
If we’re going ahead with the restructure, and if outsourcing is a must – then surely it should be possible to create local businesses to deliver services saving jobs and supporting the local economy in the process rather exporting jobs to the south.