continue buying from their on-line shops, search on their platform and drink their coffee. If a company structures its operations to

minimise its taxes, exploits its staff and takes money out of the local economy – they will continue to do that, despite the protestations of politicians and newspaper columnists, so long as consumers are still happy to buy their products and use their services. However, they might think twice if consumer spending were to reduce in protest. Easy to say, not so easy to do. Then again, there might be a way to help consumers to gauge the economic impact of their spending choices. Economists refer to this as the Local Economic Factor or LM3. LM3 is a methodology that can be used by companies, government, or community organisations to measure how their spending generates local economic impact and benefit to communities. The LM3 formula has been used for many years to measure how income entering an economy then circulates within it. The New Economics Foundation (NEF) originally adapted the model for use at the local level, and this version measures three 'rounds' of spending - hence Local Multiplier 3. The current version of the model has been significantly improved

so that it now differentiates between local and non local impacts. The tool was first applied on a large scale within Northumberland County Council where it was shown that: Every £1 spent with a local supplier is worth £1.76 to the local economy, and only 36 pence if it is spent out of the local area. That makes £1 spent locally worth almost 400 % more to the local economy. A ten per cent increase in the proportion of the council's annual procurement spent locally would mean £34 million extra circulating in the local economy each year. Perhaps if companies, goods and services were given a LM rating, where the higher the

number the greater the economic benefit to the country or region, then consumers would have the knowledge to decide, should they desire, to make the LM rating part of their spending choices. Whatever one’s disposition on taxation, it will

continue to be a hot topic for years to come. So much so, it has even led to the creation of the modern phrase “...a moral obligation to pay a fair amount of tax...” Quite often, though, those shouting the loudest

for a tax blitz tend to be the very people who manage to spend badly the taxes we already pay. So, in that respect, perhaps efficient spending should go hand in hand with effective revenue raising. If there is to be a moral obligation to pay fair taxes, it stands to reason that those in the public sector should adopt a similar moral code and accountability when it comes to spending them? For example:

Spend £150,000 on a new NHS logo, we get a new NHS logo. Spend £150,000 on defibrillators; we can get 110 of them. Which of these spending choices will help save lives and improve healthcare? In a western democracy and capitalist economy;

we get what we vote for and we get what we pay for.

Angus Long

Is the managing director of Impression Marketing and Writers4U Ltd Ability Needs Magazine 43

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