An “innovative” programme of keeping public money in the local economy which helped “reverse” the fortunes of Preston should be adopted in Dundee, a councillor has said.
The so-called Preston Model, which saw the English council adopt policies keeping money spent by them in the local area has, according to some economists, revived the flagging economic fortunes of the post-industrial town.
The Centre for Local Economic Strategies (CLES) said Preston City Council increased its expenditure on local companies from 5% in 2012 to more than 18% in 2016-17 – an increase of more than £74 million.
They were able to do so after enacting policies which saw procurement and construction contracts being given to companies based in Preston and the larger Lancashire area.
West End Labour councillor Richard McCready has now called for Dundee City Council to follow suit, adding it would be “vital” for construction contracts on the rapidly-developing Waterfront to be given to local firms.
The council said almost 75% of the labour used in its recent developments came locally, with £55 million having been invested by them.
He said: “It is disappointing that the people of Dundee have not received the maximum benefit which they could have from building investments — the contracts go to large businesses with little staying in the local economy.
“The local authorities in these cities decided they should use their economic clout to make a difference to their communities.
“Instead of outsourcing profits and jobs consideration was given to how money could be kept in the local economy.
“In some respects this is about how contracts are let, making sure that local companies can compete by not making the contracts so big that only multi-national companies can apply for them.
“It is about employing local people where possible and about buying from local suppliers where possible.
“Often when a business in Dundee goes bust politicians line up to wring their hands and say how terrible it is whilst at the same time supporting a system which stops the local council from spending money locally as the default situation.”
CLES insists the introduction of the Preston Model has kick-started the town’s economy, as well as making it more democratic and accountable.
A spokesperson for Dundee City Council said: “In a report to the policy and resources committee last month showed that major construction projects including V&A Dundee, the new railway station, primary and secondary schools, new housing and development of Waterfront sites boosted the local economy by more than £55 million, using nearly 75% of local labour and creating hundreds of employment opportunities, apprenticeships and work experience opportunities.
“The report, which was approved unanimously also included a new community benefits policy which refreshed and updated the previous version from 2012 in light of policy and legal changes, local priorities and developments and innovations within the programme.
“It also noted that the approach to community benefits in Dundee meets the requirements of the Procurement Reform Act and continues to maximise the economic and social benefits for the people of Dundee.
“As a social justice city Dundee is always open to new ideas and best practice from other places that can help the city to meet those objectives.”
