Anchor institutions such as local councils, universities and hospitals have the potential to boost local wealth building by working with community businesses, according to new research by the Centre for Local Economic Strategies (CLES), funded by Power to Change.
The study, Community Business and Anchor Institutions focused on Liverpool, Ipswich and Bristol because of the three cities’ community businesses presence and openness to new methods of delivering local services.
The report argues that by procuring services locally and from community businesses, anchor institutions have the opportunity to positively impact their local economies and upskill people in their local area. The report includes key recommendations to community businesses, anchor institutions and local authorities to encourage closer working practices:
- Community businesses should work to become more visible locally . Through joining consortia, networking and communications, they can better demonstrate the impact of their work and communicate clearly about the sector.
- Anchor institutions are recommended to harness local spending power by broadening procurement strategies to embed social value; ensure procurement is accessible for a full range of applicants; provide early engagement support at pre-commissioning events for community businesses and maximise valuable assets like land and property.
- Local authorities are encouraged to involve community businesses at a strategic level to understand their challenges and be open to new solutions.
- Finally, national policymakers are encouraged to raise awareness of the role of both anchor institutions and community businesses.
Neil McInroy, chief executive of CLES said: “The desire to create economies that work for local people and communities, demands enterprises within our economy that are socially virtuous. Embedding community businesses within the supply chain of anchor institutions is a key source of building local wealth and counteracting the extraction of wealth that bedevils too much of the economy today. Indeed, due to the very nature of how they operate and are owned, we must increasingly see community businesses as a vital plank of the growing local wealth building movement: they are generative not wealth extractive.”
Ailbhe McNabola, Head of Research and Policy at Power to Change said: “We welcome the focus in this research on the role that community businesses can play in their local economies, and on how local anchor institutions can be proactive in supporting them, whether through commissioning approaches or other means. Community businesses are embedded in a place and committed to improving the lives of those who live locally. This makes them natural partners for local authorities and other major local institutions.”
Notes to editors
What are anchor institutions?
Anchor institutions are sites of ‘sticky capital’ which make a significant contribution to the local economy as employers and holders of land and property assets. They are defined by a number of key features, as defined by the UK Commission for Employment and Skills (Mosavi, 2015), including their:
- Spatial immobility – anchors are unlikely to leave a place once they have taken root, as they have strong ties through invested capital, mission and relationship to customers and employees
- Size – they are large employers with significant purchasing power
- Tendency to operate not-for-profit – while there are examples of for-profit organisations as anchor institutions, such as airports and football clubs, it is much simpler for private businesses to move, meaning there is ‘no guarantee they will continue serving the local community in the long term’ (Mosavi, 2015).
Examples of anchor institutions include local authorities, universities, hospitals and clinical commissioning groups, religious institutions and housing associations.
The Centre for Local Economic Strategies is the UK’s leading, independent think-and-do-tank realising progressive economics for people and place. Established in 1986, CLES aims to achieve social justice, good local economies and effective public services for everyone, everywhere.
CLES has a long-standing interest and extensive body of work on the role of anchor institutions in advancing good local economies, as part of our local wealth building work. For a number of years, CLES has explored the role that individual anchors play in the local business supply chain as regards contracts for goods and services to local private business, social enterprises and community businesses. In the last six years this has focussed on the collective role that anchors play. There has been notable work in Birmingham and Preston (CLES, 2018a, Jackson and McInroy, 2017).
The work has identified that while there are many challenges associated with harnessing the potential of anchor institutions for local social, environmental and economic benefit, there are many opportunities.
About Power to Change
Power to Change is the independent trust that supports community businesses in England.
Community businesses are locally rooted, community-led, trade for community benefit and make life better for local people. The sector is worth £1.05 billion, and comprises 7,800 community businesses across England who employ 33,600 people. (Source: Community Business Market 2018)
From pubs to libraries; shops to bakeries; swimming pools to solar farms; community businesses are creating great products and services, providing employment and training and transforming lives. Power to Change received its endowment from the National Lottery Community Fund in 2015.
About The National Lottery Community Fund
We are the largest community funder in the UK – we’re proud to award money raised by National Lottery players to communities across England, Scotland, Wales and Northern Ireland. Since June 2004, we have made over 200,000 grants and awarded over £9 billion to projects that have benefited millions of people.
We are passionate about funding great ideas that matter to communities and make a difference to people’s lives. At the heart of everything we do is the belief that when people are in the lead, communities thrive. Thanks to the support of National Lottery players, our funding is open to everyone. We’re privileged to be able to work with the smallest of local groups right up to UK-wide charities, enabling people and communities to bring their ambitions to life.