Ahead of the 2018 local elections Responsible Finance calls on local councils to commit to building wealth through an inclusive local finance ecosystem. This will boost prosperity and engage the SME community in the local area.
Over the last six years Preston City Council has worked to harness the spending power of anchor institutions to boost procurement of local goods and services. Over four years this strategy has increased spend with Preston based firms by £75 million, and with Lancashire based organisations of £200 million. Anchor institutions in Preston now spend nearly 80% of their procurement budgets on Lancashire based businesses.[1]
This impressive redirection of spending to support the local economy will stimulate growth and employment in the regional business sector. To support the growth of an inclusive economy, businesses need access to affordable finance. To bridge the gap that currently exists, and complete the circle of an inclusive economy, councils and anchor institutions should support their local responsible finance providers. In particular they can do this by:
- Creating a fund for responsible finance providers to on-lend
- Signposting businesses to responsible finance providers through http://www.findingfinance.org.uk/
Responsible Finance calls on councils across England to adopt this blueprint to grow their local economies. In 2017 the responsible finance sector lent £235 million to over 60,000 people, small businesses and social enterprises. This helped to create or save 12,714 jobs, and start-up or protect 5,435 businesses and social enterprises. It helped 55,348 individuals deposit over £3 million into savings accounts.
The 2018 local elections are an opportunity for councils to set a new strategic direction. By engaging with anchor institutions and responsible finance providers, councils can drive local economic growth and prosperity and reduce spending leakage outside of the local region.
Jennifer Tankard, Chief Executive of Responsible Finance said “Building on the Preston model of local wealth generation by drawing in the responsible finance sector could stimulate local business growth. Councils and anchor institutions should create a capital fund for responsible finance providers to on-lend, creating a more resilient and sustainable business community.”
[1] https://cles.org.uk/blog/local-wealth-building-harnessing-the-potential-of-anchor-institutions-in-preston/