Growing your local economy – ‘Plugging the Leaks’

What is the purpose

To support community-led action for local and community wealth building – developing a locally owned economic strategy for your community.

The ‘Plugging the Leaks’ tool is used to bring local people together to discuss their local community wealth and self-sufficiency, to help them understand how the money circulates in their local economy and how quickly it leaves (leaks). Through a series of workshop activities local people learn how to address these leaky issues and develop ideas and projects to strengthen the economy of their area by keeping the money circulating locally for longer.

In areas where wealth is held by global and national organisations, deprivation can grow. Building local wealth, resourced and decided upon by local people, is a way of communities practically delivering solutions from the ‘bottom-up’. This tool was developed to support community-led action such as identifying opportunities to prevent money flowing out, and finding ways of encouraging more local spending. 

Based on ‘Plugging the Leaks’ and the concept of the ‘leaky bucket’ -devised by the New Economics Foundation (NEF), participants are asked to imagine their local economy as a bucket, with the bucket representing the geographic area of the groups. To fill the bucket up you need to put water (money) into it. Economic development traditionally focuses on this activity. Once the bucket is full – the economy is buoyant.

Money (water) pours in through wages, pensions, spending on goods/services, grants, tourism etc. Money that immediately flows out of the bucket does not help to fill the bucket – and this is the situation faced by many deprived communities.

The more leaks, the less long-term local benefit of the money. By ‘plugging the leaks’ and keeping money in the area for longer (local sourcing / procurement, adding value locally, using local resources), local economies can improve. There is a great deal that local people can do to improve their local area economy – and even more can be achieved when people work together. Each time money is re-spent locally, it has the same impact as attracting new money into that area.

For example, looking at things that are sourced from further away and considering if there are steps that could be taken to supply them more locally (such as procuring goods from a co-operative of small local producers) could help keeping money in the area.Furthermore, local businesses that are rooted in the community are more likely to deal with other local businesses. As NEF says:“local enterprises are more likely to employ local people, provide services to improve the local quality of life, spend money locally and so circulate wealth in the community, promoting community cohesion”. The longer money circulates in the local economy, the more it generates through the ‘multiplier effect’. Engaging local businesses, residents and municipality representatives in the development of their area can create an enterprising community and mobilise people into action (to increase local spending patterns).  Local enterprises can be encouraged and supported to work together more effectively to improve their local economies and make each local business more profitable.

How does it work?

This tool forms part of a process that involves a range of stakeholders: residents, businesses, municipal representatives/professionals/experts from communities within a defined area (e.g. small market town and surrounding villages).A series of participative activities are held over a suitable time frame.It may help if the activities are supported by an external facilitator e.g. local development agency staff (to guide the process, not the content/outcome).

Steps:

1. Getting started – identify ‘stakeholders and what will appeal to them; identify area boundaries (your bucket)
2. Workshop preparation: mapping what is there already (e.g. locations of businesses), briefing materials, inviting people, source equipment if required.
3. Workshop activities– working in small groups, clustering ideas, feeding back to plenary, voting on priorities for projects to be developed.
4. Maintaining progress – agree area/thematic ‘working’ groups / reporting structure / communicate with the wider community e.g. through project plans / local economic development initiatives.

Workshop activities explore (see tool attached):

• Understanding the local area economy
  • Map of the area to identify local businesses and their location
  • Setting the scene – strengths, weaknesses & opportunities
  • Money-go-round – understanding the local multiplier
• The Leaky Bucket
  • Identifying incoming wealth (flows) and outgoing wealth (leaks) from a personal / customer perspective
  • Identifying incoming wealth (flows) and outgoing wealth (leaks) from a business perspective
  • Group feedback
• Plugging the Leaks
  • Identifying ways to prevent money coming to the area (inward investment) leaving too quickly / slowing down the rate of leakage
• Designing a plug tree
  • Identifying areas of interest and prioritising–group common themes and ideas, agree priorities
• From ideas to action
  • Developing prioritised themes and ideas(irrigation)
  • Identifying opportunities and challenges to keep money circulating(re-spending) locally
  • Working out the next steps – who, what, how by when(to take the project idea forward)

Who is the tool for?

The tool will help a group of people who may never have worked together to focus onissues/opportunitiesincluding:

• Agriculture (organic, specialist products)
• Horticulture
• Forestry
• Fishing
• Tourism
• Education/Health
• Climate change/adaptation
• Renewable energy
• Culture, Arts & Crafts
• Retail and Processing local products / adding value
• Social Enterprise

The benefits are most widely felt when people work together / collaborate to find creative solutions for their local area.Every community will get something different from using the tool –not so much dependent on geography as the particular area’s needs, interests, resources and timings.

Dos and Don’ts

• Don’t worry –you do not need need expert knowledge of economics – just enthusiasm, an open mind and a willingness to share ideas.
• Do remember that the process should be led by the local community (even if workshops are facilitated by a local development agency) – try to gather a good cross-section of the people in your community – Initially a core group will need to come together to enlist the interest of as many people from the agreed area as possible.
• Do share ideas at an early stage is important – if you haven’t involved key people from the start will be difficult to get them to feel enough ownership of the results and act on the ideas
• Do prioritise the more direct and tangible ‘leak–plugging’ ideas – those that can swiftly bring about a change in people’s pocket sand practically demonstrate action, rather than those that require a multi-pronged strategy – focus on those ones later once you have a few ‘quick wins’
• What you achieve is entirely up to you and your group: from finding ways of helping two or three local businesses to become stronger by finding additional local markets for them; or you might decide to set up entirely new initiatives such as festivals that celebrate local heritage, culture and produce; activities for young people; community energy programmes.

How the tool was already used?

Stemming from a collaboration with NEF, the tool was piloted in Pembrokeshire, Wales. It was presented in the Czech Republic at VENKOV conference in NoveHrady. During the COVID-19 pandemic the tool has been used in a webinar form for the Czech Local Action Groups to encourage discussion for locally-based solutions to improve economy of rural regions in the Czech Republic.