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Buy local, and the cash stays local
Thu 22nd Jan 2009, 10:13am
THIS Saturday, marks the first anniversary of the Buy North- East campaign, which was launched by the North-East Chamber of Commerce and supported by The Northern Echo after we highlighted that if more councils spent more money buying services from local firms it would give a major cash injection to the region.
Buy North-East highlighted that £3.5bn is spent each year by the North-East public sector on contracts with the private sector and yet only £1.6bn is invested in local companies.
The campaign showed that if public bodies to increased local contracting by a mere one per cent each year until 2016, it would boost the North-East economy by £1.35bn and create 6,000 direct jobs.
Given the economic climate, does this not represent 1,350,000,000 reasons for the public sector to wake up to the benefits of working more closely with local firms?
Never has this been a more pertinent issue. Recessions bring with them company closures which leads to unemployment – and when this happens, the burden on the public purse is heightened.
The chamber is focusing on measures to enable recovery and we are lobbying nationally for measures such as the empty property rates relief changes to be reversed. We have called on the public sector to sharpen up when it comes to paying suppliers and we are regularly advising politicians on ways that will boost business success rates.
This pales by comparison with the impact that local procurement can have on the economy. This is not an argument for parochialism, it is an argument for pragmatism.
Money spent locally circulates the regional economy many times, cash spent elsewhere is rarely seen again.
Were our local authorities to start increasing spend in the region by the requested one per cent minimum from today, I would be able to report next year that an additional £311m had gone into our economy. What better way to kick-start that recovery?
â– James Ramsbotham is chief executive of the North-East Chamber of Commerce.