Preston's 'anchor institutions' act to boost local economy through procurement

23 April 2015

Preston City Council has increased sourcing from local suppliers after an analysis of procurement by ‘anchor institutions’ in the region showed significant “leakage” of spend outside the area.

Over the past 18 months, the Centre for Local Economic Strategies (CLES) has been working with the local authority to improve the local economy.

A baseline analysis of the supply chain found that the region’s anchor institutions - including the Preston City Council, Lancashire County Council, Lancashire Constabulary, and the University of Central Lancashire - spent £750 million buying goods and services in 2012-13.

The CLES report, Creating a Good Local Economy, said around £458 million "leaked out" of Lancashire, especially for administrative activities, business activities, communications and manufacturing.

The city council and CLES concluded procurement was a key lever for achieving wider local economic benefit and that buying locally could significantly outweigh the benefits of other economic development initiatives.

As a result, various changes were implemented with the anchor institutions. The county council has revisited its commissioning and procurement strategies, the report said. It has broken down some contracts into smaller lots to allow more businesses to engage in the procurement process. Lancashire Constabulary now requires quotes from local organisations on procurements between £10,000 and £50,000.

In 2013-14, the amount spent by Preston City Council with suppliers based in both Preston and Lancashire increased to 17 per cent, from 14 per cent, and to 33.5 per cent, from 29 per cent, respectively.

Around £8 million was still “leaking” out the study found, although £3 million of this was deemed to be “potentially ‘influenceable’”, according to the study.

The report identified opportunities for ongoing work to maximise benefit through procurement. These included:

• Linking procurement decisions to the priorities of the city and council where appropriate.
• Signposting businesses and voluntary and community sector organisations to the various portals which exist in Lancashire to raise awareness of opportunities.
• Seeking to influence the behaviour of core contractors around supply chain and recruitment practice.
• Advising purchasers of below threshold opportunities in their own organisation where it is appropriate to utilise local suppliers
• Identifying suitable businesses in Preston and Lancashire and making them aware of opportunities
• Promoting the value of packaging contracts
• Regular ‘meet the buyer’ events
• Exploring cooperative development and delivery
• Apprenticeships

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