LocalMultiplier

= What is the local multiplier? =

Starting point text for a leaflet (?) introducing the idea of the LM3 to participants in an active research project in spital hill

When you spend money in Burngreave, some of it stays in Burngreave and some of it leaves. Some that stays goes to people you know, and people who own places where you spend money. Some that goes travels to family living further away, or people who live outside burngreave, or goes to companies outside burngreave that own places here. Some of the money that stays gets spent in burngreave again, and some of that is spent again locally. And so on.

The 'local multiplier' is a measure of how much stays. It's called a multiplier because money that stays local gets a chance to be spent locally again - it multiplies. The more money is spent locally, the more local people benefit.

Now, imagine shop which buys products locally, where local people help with selling, help deliver it and do most other things needed to run the business. When you spent £10 at this shop around £8 stays local and £2 leaks away out of the local economy. This means that most of the money - £8 - is still in burngreave, circulating amoung other people and businesses here. Some of it may even come back to you!

Now imagine another shop, one owned by someone from outside of town, a shop which doesn't employ many local people, and doesn't buy the things it needs locally. When you spent £10 there only £2 stays local, the rest leaves Burngreave.

So it is important how a business spends their money, not just how much trade they do. You might not want to have a shop like the second kind in your area, even if it was doing lots of business. If the money spent there leaves the area straight away then it doesn't get a chance to get spent locally again. In fact, you could have a situation where one shop brings in twice as much money as the other, but because that money doesn't stick around to be spent locally again, the less busy shop is better for local people.

We think that proposals for new shops should take account of how the money they bring in will be spent, and that this should be compared to what happenes currently to money spent locally

[Description of LM3 / Active Research process here]