It is true to say that the Government believes that vibrant and successful local economies play a vital part in shaping the places where we live and work and that local authorities have an important role to play in ensuring the sustainability of local economies through the stewardship of their local areas.
Indeed through the Local Government and Public Involvement in Health Act 2007 and the subsequent statutory guidance “Creating Strong, Safe and Prosperous Communities” (July 2008) we have
placed great emphasis on developing Sustainable Communities Strategies to set the overall strategic direction and long-term vision for the economic, social and environmental well-being of a local area.
The Government is also consulting in its draft legislative programme for 2008/09 on a Community Empowerment, Housing and Economic Regeneration Bill in which we propose to introduce a new economic duty on local authorities to assess local economic conditions and to work in partnership with other statutory and non-statutory bodies to improve the economic well-being of localities.
We therefore recognise the remarkable contribution that local authorities play both as a local economic actor themselves, but also in partnership with a range of other organisations in the private and third sectors in shaping local economic fortunes. Public spending can have a significant impact in nurturing, supporting and driving the local economy.
But it is even more important in turbulent economic times that the public sector provides an anchor upon which a resilient local economy can be founded in order to for instance, build local supply chains, create pathways into skills and training and provide a bulwark against the worst consequences of global economic forces. This research represents an important contribution to our understanding of the role that the public economy can play in building resilient local economies and shows the value that a local authority commercial services department plays in terms of both its procurement and employment spend in maximising the effect of public spending in the local economy.
Understanding the impact of both procurement and employment spend on the local economy and having reliable baseline data can help shape procurement strategies and policies and local service configuration to ensure that the benefits of public spending to local economies and to the wider sub-regional economy are realised. It can also ensure that leakages from the local economy are reduced and that there is a virtuous cycle of spending that provides high quality employment, promotes local businesses and social enterprises and encourages investment and innovation.
I am delighted to have been asked to write the foreword to this research report and I commend the research methodology and the findings as an exciting contribution to our wider understanding of the role of the public economy in creating local economic multipliers.
A copy of the full report is available to download below: