Community Wealth Building for North Ayrshire Council

Transcription

1 NORTH AYRSHIRE COUNCIL Cabinet 29th May 2018 Title: Purpose: Recommendation: Community Wealth Building for North Ayrshire Council The report presents the findings of the Economic Footprint Report study of North Ayrshire Council, and details of a project in Preston City which seeks to maximise the impact of what the council do through a Community Wealth Building Project. The report is seeking approval of an action plan to progress work that will support the council maximising its economic impact. That Cabinet:- - Notes the recommendations of the Economic Footprint Report Appendix 1. - Consider and agrees the Action Plan set out in Appendix 2 of the report to support a community wealth building approach for North Ayrshire Council. - Approves that a report on Community Wealth Building to the Community Planning Partnership. 1. Executive Summary 1.1 This report sets out the recommendations and proposed action plan from the Economic Footprint report, developed by North Ayrshire Council and the Improvement Service. The aim of the action plan is to supplement and enhance the Council s leading approach to promoting Inclusive Growth. 1.2 The report also details a related approach which has been pioneered in the UK by Preston City Council and its key local partners called community wealth building. This involves changing the way large public sector institutions, or anchor organisations use their procurement spend to retain more wealth in the local/ regional economy, within the current framework of procurement legislation. The report also highlights some of the other areas of work Preston City Council and its partners are looking to progress as part of a Community Wealth Building approach.

2 2. Background 2.1 The Economic Footprint Report is part of the Economic Outcomes Programme (EOP) led by the Improvement Service. The EOP is designed to help local authorities understand their significance as economic actors within their local area, and more widely across Scotland. Building on that understanding, the EOP seeks to work with Councils to identify how they can enhance their economic impact and improve economic outcomes. 2.2 The Economic Outcome Programme draws its focus from the concept of Inclusive Growth as set out in the Scottish Economic Strategy. Within the context of the Inclusive Growth agenda, economic outcomes are about understanding and using the economic levers that the Council does control as a: Major Employer; Procurer of goods and services; Asset owner and; Deliverer of a wide range of services and policies that impact on the local economy. 2.3 Appendix 2 sets out the proposed action plan responds to the recommendations, set out in Appendix 1, of the Economic Footprint Report. The action plan also provides a short progress update on the current status of each of the actions included in the plan. As the data assessed was 2015, it is proposed to seek more recent data analysis from the Improvement Service subject to its availability. These actions are presented under four sub headings: Workforce Procurement Assets Inclusive Growth 2.4 Key findings included: Council Employment Analysis As of 2015, North Ayrshire Council employed 7,226 people 5,617 of these employees (77.7%) lived in North Ayrshire Most employee s resident outside North Ayrshire were from neighbouring local authority areas of South and East Ayrshire, Glasgow City and Renfrewshire. Annual Salary spend of million on all employees Just over 100 million salary spend on employees resident in North Ayrshire (68.3% of total salary spend) Council Procurement Analysis A total procurement spend of 168m in 2014/15 Local spend of 32m in 2014/15 (19% of total procurement spend); A lower proportion of spend is local in comparison with the average for Scottish local authorities. (9% lower in 2014/15);

3 Asset Management- Analysis A capital investment programme totalling 133 million for the period 2016/17 to 2018/19. Capital investment is projected in the Council s Capital Programme to decline from 57.8 million in 2016/17 to 23.2 million in 2018/19. A significant portfolio of investment opportunities aimed at boosting local inclusive economic growth. A portfolio of 357 operational properties, valued at 397 million 2.5 The importance of the Council s role in promoting inclusive growth and supporting community wealth building is particularly acute in North Ayrshire, given the economic challenges the area faces. North Ayrshire continues to face major challenges due to: High levels of unemployment A lack of jobs and low skills levels High levels of poverty and deprivation 2.6 These long standing challenges are compounded by economic uncertainty at a national level in relation to the outcome and impact of Brexit and continuing austerity and budget reductions for the wider public sector and for the Council in particular. Given this degree of challenge, it is essential that the Council uses all the economic levers it has to their maximum positive effect in the local and regional economy. 2.7 An example of a local authority utilising its economic footprint to support local inclusive growth is the work that has been led over the last 5 years by Preston City Council, in the northwest of England around community wealth building. 2.8 Preston City Council, working with key partners and with the Centre for Local Economic Strategies (CLES) developed a community wealth building approach. The basis for this is to identify and secure the wealth that already exists in a local area, to reduce the level of leakage of wealth from the local Preston and Lancashire economy. 2.9 One example of how anchor institutions (large public sector organisations such as Councils, Colleges and hospitals who employ a lot of people, spend a lot of money through procurement and which have a long term commitment to a particular place and are very unlikely to leave the area as they are rooted there) to change their practices to better benefit the community in which they do business. The anchor institutions working with the Council are Lancashire County Council, Preston s College, Cardinal Newman College, Lancashire Constabulary and Community Gateway, can impact their local communities is with their procurement buying goods, services and works from local companies which creates employment and expanded business opportunities in the community Evidence identified by CLES and the Federation of Small Business (FSB) showed that for every pound spent by an anchor institution with a local SME, 63p of this money was re-

4 spent in the local economy. This figure drops to only 40p for every pound spent with a multi-national company. Work was undertaken to establish what the anchor institutions spent through their procurement processes with businesses and other organisations, in Preston and the wider Lancashire areas and then to understand where this spend leaked out of the local economy. They did this by examining the data for the top 300 suppliers of each institution- with a total collective spend of 750 million a year in The process has produced financially tangible outcomes. In 2013, Preston City Council and its five partner organisations spent 28 million in Preston, and 292 million in Lancashire (39% of procurement spend was in Lancashire). By 2017 this had increased significantly to 111 million in Preston and 486 million in Lancashire (79% was in Lancashire) By way of comparison, North Ayrshire Council spent 191 million on procurement of goods, services and works in 2016/17, 37.4 million with local North Ayrshire companies, or 19.5% of total procurement spend. The Scottish average for local procurement spend is around 27%. This in part reflects the local economy which has a smaller local business base which may not be geared up to provide the goods and services required by the local authority It should be noted also that this was over a period when the combined procurement budget for Preston City Council and its partners fell from 750 million to 616 million. Even in the face of substantial budget cuts, Preston City Council and its partners managed to significantly increase the value of their procurement spend in the local economy Preston City Council and its partners are progressing with other areas of work to support Community Wealth Building, including: A Campaign to promote the living wage with the public, private and voluntary sector. Further work to consider the role of the supply chain in procurement. Undertaking a Business Citizenship survey to understand the contribution companies make to the local economy and in addressing social and environmental issues. The potential positive impact of physical development schemes to support local economic growth. Developing new worker co-operatives, one for IT services and one for food. Ongoing discussions about establishing a local bank and supporting a credit union Preston is the most advanced example of local authorities in the U.K. using the economic levers they have to support community wealth building. There are other examples of work taking place across the UK to support Community Wealth Building For example, in Plymouth, a city which has suffered from severe post-industrial decline and has as a result high levels of poverty and deprivation, has championed and supported a model of social enterprise development. In the five years since adopting this model, Plymouth now has 150 social enterprises, employing 7,000 people and generating a combined income of 500 million. These social enterprises have brought derelict shops and buildings back into productive economic use, including the previously derelict

5 Guildhall in the Devonport areas of the city, which is now a combined community, business and arts centre In Dumfries, a local community organisation, the Stove Network, with the full support of Dumfries and Galloway Council, has recently announced its plans to buy back 8 unoccupied buildings in the town centre from absentee private landlords. The aim is to achieve community ownership around the Midsteeple area of Dumfries High Street The Stove Network, a community arts organisation, aims to use community empowerment legislation and follow the model of community buy outs which have been used in rural Scotland, such as on Eigg, Gigha and Assint, to have the first urban community buy out in Scotland. Proposals are at an early stage of development, however along with support from Dumfries and Galloway Council, the Scottish Government has indicated its support for the idea of an urban community buy-out The Recommendations in Appendix 1 and the Action Plan set out in Appendix 2 of this report provide the basis for progressing a community wealth building approach for North Ayrshire Council. 3. Proposals 3.1 Note the recommendations of the Economic Footprint Report Appendix Consider and agree the action plan set out in Appendix 2 of the report to support a community wealth building approach for North Ayrshire Council. 3.3 Agree that a report on Community Wealth Building is presented to the Community Planning Partnership.

6 4. Implications Financial: Human Resources: Legal: Equality: Children and Young People: Environmental & Sustainability: There are no direct financial implications from the report. The paper contains recommendations which may have an impact on how the Council addresses issues of recruitment and workforce development There are no legal implications from the report This report contains findings and recommendations that could reduce inequalities in North Ayrshire. This report outlines findings that will support sustainable economic growth. Key Priorities: Growing our economy, increasing employment and regenerating our towns; Working together to develop stronger communities; and Ensuring people have the right skills for learning, life and work. Community Benefits: The Economic Footprint report contains recommendations on developing and sharing the Council s practice on Community Benefit Clauses. The Community Wealth Building approach set out in the paper has a key focus of promoting local community economic growth. 5. Consultation 5.1 In terms of developing the Economic Footprint Report, there was a reference group of officers that worked with the Improvement Service to develop a detailed understanding of the economic challenges and opportunities and the structure and focus of service delivery relating to economic outcomes. The reference group included colleagues from Place, Corporate Services, Economy and Communities, and Chief Executive s Office.

7 5.2 In terms of the Community Wealth Building approach officers from Economy and Communities have liaised with colleagues in procurement and the Finance and Corporate Support directorate to consider initial work around a community wealth building programme for North Ayrshire Council. Karen Yeomans Executive Director, Economy and Communities For further information please contact Andrew Noble on Background Papers Insert titles of any background papers or N/A

8 Appendix 1 Economic Footprint Report Key Findings North Ayrshire faces challenging economic circumstances, which are long standing and deep seated. These challenges risk being compounded by external factors such as the potential impact of Brexit and the performance of other regions of the Scottish economy relative to North Ayrshire. North Ayrshire Council has a very clear insight and understanding of the economic challenges the area faces, as demonstrated by its recently refreshed economic development and regeneration strategy and by its commitment to developing an inclusive growth diagnostic in partnership with Scottish Government and in pursuing an Ayrshire Regional Growth Deal and Regional Partnership working closely with East and South Ayrshire. The Council has also structured its services in such a way, through the Economy and Communities directorate which brings together a wide range of services specifically to address the challenges to inclusive growth it has identified. In addition to this the Team North Ayrshire approach to providing an integrated responsive support offer to businesses looking to grow and invest in North Ayrshire is innovative and has shown initial signs that it is having a positive impact. Based on the analysis of data, discussions with the local reference group and comparisons with other local authorities, there are a range of actions North Ayrshire Council could take to further enhance the positive impact that it has on the local economy. Economic Footprint Report Recommendations 1. The Council could promote Living Wage Accreditation with other local Community Planning Partnerships, particularly the major employers such as the NHS and the Ayrshire College. 2. The development of the Ayrshire Growth Deal, in partnership with East and South Ayrshire and the national enterprise and skills agencies provides an opportunity for the development of a shared Ayrshire economic vision, strategy and services through the development of the Ayrshire Regional Pathfinder. One of the key objectives of the Regional pathfinder is to

9 enhance the Council s impact on the local economy, to help support positive economic outcomes for the area. 3. Consideration of Council employment in relation to deprivation could also be a useful criterion to include in assessing potential options for budget reductions or service redesign. For example, would cuts in particular service areas have a disproportionately negative impact in disadvantaged communities? In the same way that major budget or service changes are assessed for equality or environmental impact, they could also be assessed in relation to economic impact. It may be the case that realising short-term savings in one service area could result in longer-term service demand increases for the public sector. 4. There is the potential to strengthen partnership working by embedding the inclusive growth diagnostic as part of the Community Planning Partnership Local Outcome Improvement Plan (LOIP). 5. There is the potential through Team North Ayrshire to provide closer links between business support and Council and wider public sector procurement opportunities for North Ayrshire companies. There is an opportunity to increase local spend to bring North Ayrshire Council closer to the Scottish average local procurement spend. 6. The structure of the Modern Apprenticeship programme provides an opportunity to target opportunities towards more disadvantaged groups, for example those people who are in the employability pipeline at present. 7. Through the development of the Inclusive Growth diagnostic work and a focus on localities which face the highest level of inequality and poorest outcomes, there is the potential for the Council to develop a more targeted approach to recruitment, particularly in areas of employment growth/ higher turnover / skills shortages. For example, in early years care expansion and social care. 8. There is the potential to reinforce the Council s approach to local inclusive growth by having a specific commitment to supporting local businesses and social enterprises to develop their ability to bid for and win public sector contracts. 9. There is the potential to establish a strategic group to align economic development, including social enterprise development and Council procurement activity to facilitate increased local contracting opportunities building on the aims of the North Ayrshire Social Enterprise Strategy. 10. The Council should promote its good practice in terms of the use of Community Benefits to local Community Planning partners. 11. There is an opportunity to collaborate on a regional basis with other Councils regarding their procurement spend. 12. The development of Locality plans can facilitate more focused engagement with SMEs in more deprived areas.

10 13. There is the potential for the Council to collaborate more closely with its Community Planning partners in terms of the wider management of the public sector estate. 14. There is the potential for greater collaboration between services in relation to the use of assets to support local economic growth.

11 Appendix 2. Action Plan Strategic Theme Action Lead Officer Anticipated Timescale Workforce Continue to progress plans around Council employment in relation to deprivation. Jackie Hamilton and Greig Robson Progress (action to date and planned) August 2018 From April 2018 we will pilot a Pay Advance Scheme to smooth the transition of new employees in Grade 1-3 posts into employment with the Council. Ensure new employees looking to access Pay Advance Scheme are accessing money management services. The Council will procure a lower cost loan finance service for employees to allow them to access financial information, advice and support, low cost loans to consolidate more expensive debt and over time to improve their financial wellbeing and credit score. Work is progressing to develop a supported employment employability service to support disabled people enter and remain in the labour market. This service will be developed using Poverty Challenge Fund. The Council has ring fenced 5 Modern Apprenticeships every year for young people leaving care. The Council continues to provide the Skills for Life programme- providing in work job training for 6 months to support long term unemployed parents back to work. An evaluation of the first phase of the programme will be undertaken over the summer. Potential for the Council to develop a more targeted approach to recruitment, by using Inclusive Growth Diagnostic and locality approach, particularly in areas of employment growth/higher turnover/skills shortages. For example, in early years care expansion and social care. Jackie Hamilton/ Greig Robson March 2019 A review of the Pay and grading structure has commenced and this will consider the impact of any projected increases to the Scottish local government living wage. A review of our employability pipeline will examine our recruitment process for Grade 1-4 with a view to creating employment opportunities and a career progression pathway within the Council for local people.

12 Procurement Enhance links between procurement and business support in order to make North Ayrshire businesses and social enterprises aware of public sector procurement opportunities and prepare them for the competitive process. Anne Lyndon/Matt Strachan February 2019 Council now publishes its own contract register From April 2018 will publish an Annual Procurement Report. Meet the Buyer events are held twice a year. Undertake analysis of spend on the top 300 suppliers to North Ayrshire Council, by sector, size, location and so on. Review the companies account managed by Team North Ayrshire, approximately 240, who are not currently registered for Public Contracts Scotland. This would include company profile, sector etc. and any direct intelligence from the companies about their views of public sector procurement. Review small company portfolio supported by Team North Ayrshire- assess potential opportunities for these companies to register and win contracts through the Quick Quote system. Establish a new corporate procurement programme board to agree a detailed action plan on the completion of the initial work set out above. The Senior Manager from the Corporate Procurement has joined the Social Enterprise board to improve linkage between procurement and social enterprises. Promote its good practice in terms of the use of Community Benefits to local Community Planning partners. Anne Lyndon February 2019 Initial discussions to take place with community planning partners. Establish a baseline of practice in relation to the use of community benefit clauses

13 Assets Explore potential for the Council to collaborate more closely with its Community Planning partners in terms of the wider management of the public sector estate. Explore opportunity for greater collaboration between services in relation to the use of assets to support local economic growth. Craig Hatton August 2018 Joint property asset group established with the NHS to identify opportunities within the HSCP estate. Locality review of our assets has identified opportunities for joint working with Police Scotland and NHS. Housing are hosting an event in June 2018, where Council services and CPP partners will share their vision for the regeneration of our housing infrastructure and neighbourhoods. Craig Hatton/Audrey Sutton August 2018 Initial meeting in April 2018 between services and Grant Thornton Ltd. to discuss local government commercial investment activities and the use of the Council s asset base to support more vibrant local economies. Review of industrial portfolio has identified opportunities to improve condition of our estate and increase marketability. Inclusive Growth Promote Living Wage Accreditation with other local Community Planning Partnerships, particularly the major employers such as the NHS and the Ayrshire College. Laura Friel/ Caitriona McAuley Elma Murray/ Caitriona McAuley August 2018 Explore potential of Council using its borrowing powers to develop local infrastructure- including i3 (TIF), port infrastructure and hotel development. Consideration of further opportunities to promote Scottish Living Wage Accreditation through CPP and Fair for All. Undertake further engagement with the private sector around the Fair Work agenda Strengthen partnership working by embedding the inclusive growth diagnostic as part of the Community Planning Partnership Local Outcome Improvement Plan (LOIP). Use development of Locality Plans to facilitate more focused engagement with SMEs in more deprived areas. Caitriona McAuley August 2018 Audrey Sutton/Caitriona McAuley August 2018 The Inclusive Growth diagnostic constraints are currently being reviewed to identify what the Council and are partners are doing in response to each Constraint and to identify what we could do more of/ differently and where any gaps are. The current review the Economic Development and Regeneration (EDR) board includes the potential to expand locality group s membership to include local businesses. Five out of six localities have identified the local economy/ employment as a priority. As part of the review of the EDR board, locality groups will be provided with additional input from Economic Growth on a local economic profile and progress with the Economic Development and Regeneration Strategy.