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Sustainable Business Research Institute

Anchors away: realising wider socio-economic value for local economies

Transforming how anchor organisations operate, through the creation of a framework to support the making of ‘good jobs’ in the supply chain and to encourage organisations to spend locally. 

Anchors away: realising wider socio-economic value for local economies

The Challenge

Despite being one of the wealthiest nations in the world, more than one in five people experience poverty in the UK (Social Metrics Commission). Anchor institutions (anchors) have emerged as a means of addressing the persistent problem of poverty. Anchors – such as local authorities, hospitals and universities – make a major contribution to the character of a local economy through the amount they spend and the number they employ.

At a time when public sector reform and greater devolution is creating space for these organisations to contribute to wider socio-economic development objectives, our research has identified major opportunities to alleviate poverty through innovation, co-production and new forms of collaboration between anchors within and across sectors.

The Approach

Drawing on more than a decade of applied research associated with devolution and regeneration of deprived communities, Sanderson (2009) called for ‘intelligent policymaking’, which identified the potential that action learning can play in supporting local economic development partnerships to improve their effectiveness in dealing with complex problems such as poverty. The research argues for the need to review the ideas that underpin thinking about evidence-based policymaking, and move beyond the territory of instrumental rationality to a position founded upon two intellectual pillars: developing knowledge about complexity and the role that practical knowledge plays in guiding action to address complex social problems.

During a similar timeframe, Yeo and Gold (2011) were exploring the role of action learning within the discipline of Human Resource Development (HRD) and conceptualising the process as a type of transformative experience, highlighting that linking action learning to HRD can lead to a continuous process of questioning complexity in organisations. These ideas informed the development and implementation of an action learning project to explore the role that anchors play in alleviating the complex problem of poverty in the Leeds City Region (LCR).

The research engaged 12 anchor organisations over a two-year period (2015-17) and sought to encourage innovation, and influence the money that is spent in the local economy through procurement activity and the provision of ‘good jobs’ to minimise the risk of in-work poverty. Working together, the anchors spent more than £1.4bn a year on procuring goods and services, and identified the opportunity to shift 10% of this spending to suppliers in the LCR, worth up to £196m to the LCR economy (Devins et al, 2017). They also co-created a framework for ‘good work’ to apply to analysis of employment in their own organisations and in organisations operating in their supply chains. Anchors then set about seeking to innovate in a variety of ways. This might seem from the outside easier than is the case, as it often takes considerable knowledge, skill, time and perseverance for innovative ideas to take root and become accepted (Devins, Watson and Turner, 2019).

Impact

This research has influenced policymaking and practice in the region and further afield. It has also promoted and supported innovation in several of the anchor organisations participating in the original research.

Evidence informed policy development

Leeds Beckett University is at the forefront of a policy experiment in Leeds. Leeds City Council has formed a group of a dozen large organisations rooted in the city, an anchor network of universities, colleges, health and hospital trusts, and major utilities. The aim is to increase the positive impact these organisations have on the city, and to provide more support to those suffering disadvantage. These anchors employ one in seven of the Leeds workforce, and spend more than £2bn every year on goods and services. The Leeds Anchor Network is chaired by the Vice Chancellor of Leeds Beckett University and is encouraging innovation to increase the amount of money circulating in the city economy through targeting local spend and supporting the development of sustainable local supply chains.

The Anchors Network is part of a wider inclusive strategy in the city of Leeds to support economic growth that is more fairly distributed across society and creates opportunities for all. Our underpinning research on the use of evidence in policymaking and the role that anchor institutions play has informed policy development within and beyond the Inclusive Growth Strategy adopted by the city of Leeds and has influenced the City Region Inclusive Growth Strategy, the Wakefield Council Inclusive Growth Strategy and policy scoping activity in Calderdale (R1.). The Welsh Government has used the research to consider the development of a framework to promote shared value and an approach to evaluation that encourages learning and sustainable development (WCPP, 2017). One of the authors of the underpinning research (Professor David Devins) has informed further policy scoping work undertaken by NHS England and is acknowledged by the World Health Organisation in a report that brings forward new evidence, practical methods and opportunities to show how the health sector is essential to a stable, functioning economy (Boyce and Brown, 2019).

Evidence-informed innovation amongst anchor institutions in the city region

Research outputs realised in the course of the action research project included the identification of almost 50 good practices associated with procurement and employment initiatives to support inclusive growth and alleviate poverty. The sharing of this knowledge amongst participants created a platform to support innovation and provided a foundation for impact in participating organisations.

A growing recognition that procurement can be one of the best ways of connecting economic growth to alleviate poverty and encourage inclusive economies emerged during the action research project. Representatives of the local authority procurement teams worked collaboratively during and after the project, sharing information and knowledge, acting as ambassadors for change in their organisations and influencing £150m procurement spend in the West Yorkshire Combined Authority. Within one of the university anchors, the procurement team embraced the opportunity to embed sustainability (social value, economic and environmental) into all procurement activity. The analysis and subsequent actions have seen the university move from about a quarter to almost 60% of discretionary spend in the city, 70% of which is now with small- and medium-sized businesses, with 20% in the most deprived areas of Leeds. The university now monitors and reports on this spend and continually improves measurement and reporting on impact.

The action research also resulted in the co-production of a framework to support the development of ‘good jobs’ in the supply chain. The Employment Manager (C7.) at Leeds City Council described the framework as the clearest explanation of what is meant by the term ‘good jobs’ that he had seen. The action research process encouraged planning and the development and implementation of inclusive human resource management and development practices in each anchor organisation. The impact is exemplified by one of the local authorities employing more than 15,000 staff who undertook impact assessments, collated evidence in the organisation, which showed a marked difference in the policies and practices impacting on low-paid staff and built the case for innovation and change. This was shared with other local authorities in the region who adopted and adapted these policies and practices relevant to their operating contexts. Further innovative learning and development services have been developed to promote fringe benefits to minimise the risk of in-work poverty. A pilot project to develop financial literacy has seen 400 staff members participate with 95% reporting that they would take positive action related to their personal finances. The Council estimates that every £1 spent on financial inclusion generates £8.40 for the regional economy.

We see the Leeds Anchors Network as being a fundamental partnership in the city in terms of helping us deliver against our inclusive growth strategy’.

Chief Officer, Culture and Economy at Leeds City Council

Find out more about our impact

A growing recognition that procurement can be one of the best ways of connecting economic growth to alleviate poverty emerged during the action research project. By developing a better understanding of the effects of their organisational spend through action research, participating organisations were able to look to increase their impact on the local economy, establish targets for redirecting spend locally, adapt procurement processes and seek to develop capacity within local supply chains.

The framework has informed the development of a new procurement strategy (2019-2024) in Leeds, setting out improvements to delivering wider social value, including a commitment to paying the real living wage, through procurement. Within one of the university anchors, the procurement team embraced the opportunity to embed sustainability into all procurement activity. The analysis and subsequent actions has seen the university move from about a quarter to almost 60% of discretionary spend in the city, 70% of which is now with small and medium sized businesses, with 20% in the most deprived areas of Leeds.

The research recommendations highlighted the role that local authorities have to play in catalysing and coordinating collaborative anchor activity, making the most of their convening role and enabling other anchors to contribute to the alleviation of poverty.

The Council has convened a group of a dozen large organisations rooted in the city, an anchor network of universities, colleges, health and hospital trusts, and major utilities. The aim is to increase the positive impact these organisations have on the City, and in particular to provide more support to those suffering disadvantage. These anchors employ one in seven of the Leeds workforce, and spend more than £2bn every year on goods and services.

The Anchors network is a pillar of a wider inclusive strategy in the city of Leeds to support economic growth that is more fairly distributed across society and creates opportunities for all.

Our underpinning research on the use of evidence in policy making and the role that anchor institutions play has informed policy development within and beyond the Inclusive Growth Strategy adopted by the City of Leeds. The Corporate Policy Manager at Wakefield Municipal District Council notes the impact of the underpinning research on the Key Cities Networ, and the Welsh Government has used the research to consider the development of a framework to promote shared value and an approach to evaluation that encourages learning and sustainable development.

Professor Devins has informed further policy scoping work undertaken by NHS England and is acknowledged by the World Health Organisation in a report that brings forward new evidence, practical methods and opportunities to show how the health sector is essential to a stable, functioning economy.

More recently the underpinning research and the Leeds Anchors Network are cited in a report highlighting the role of health in driving inclusive, economic growth in a post-pandemic future.

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