Published: 26th Sep 2016

3. Anchor institutions embedded in and working for the local economy:

How far are hospitals, councils, housing organisations and universities supporting their local economies? A local multiplier analysis conducted by the Centre for Local Economic Strategies (CLES) showed that the total spend of the three hospitals on the border between Birmingham and Sandwell in the West Midlands was £150m and that, for contracts worth over £100k, only around 15% was going back into the local Birmingham and Sandwell economies. Sandwell and West Birmingham NHS Hospitals Trust and Sandwell Council aim to change that, with a plan to embed a new hospital – Midlands Metropolitan – as firmly within its local area as Cadbury’s was in Bourneville. Before a brick has been laid, people who live in the deprived areas which neighbour the new hospital are being engaged in training opportunities to take on the new jobs at the hospital and encouraged to set up social enterprises that will fulfill some of its contracts. Local food businesses are being invited to supply the hospital. This builds on the work of Evergreen in Cleveland, Ohio, and of community wealth building work led by Preston council. NHS hospitals and other place-based institutions can look at how far they are contributing to their local economies – from the training and employment of disadvantaged groups, to better links with locally-owned businesses, developing local supply chains and facilitating close live-work patterns. Major public sector developments are looking at the social value involved, rather than the efficiencies, not only in the building work, but in the long-term impact of the institution. They are helping create social and local supply chains that keep money circulating within local economies. Councils such as Manchester and Glasgow are localising their procurement strategies to align them more with local needs. Belfast Council has maximised the social and community benefit from the development of its Innovation Factory.

Who’s doing it:

Midlands Metropolitan Hospital | Manchester Council localised procurement. Belfast Council’s Innovation Factory | Glasgow Council SME procurement strategy

What it needs:

Commitment from public sector and other anchor institutions to understand the needs of place and of local citizens. This support can be through local and social purchasing; through local employment; or as incubators for start- ups and community organisations. Local government can create ‘anchor networks’ to build partnerships between anchors and public sector bodies, local businesses and community groups. This should be framed by existing policy frameworks and legislation. The new EU procurement directives have three key themes around flexibility’, positioning SMEs, and maximising social and environmental goals through procurement. These considerations should be at the heart of anchor institution strategy and the behaviour of individual institutions, as should the principles of the public services (social value) act.


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