Policies for the City Region – serialised: Part 5, Anchor Institutions

We continue the serialisation of our report, Policies for the City Region. In this short installment we explore the idea of “Anchor Institutions” as key actors and resources in moving towards a viable Regional society and economy.  And there’s plenty more to come!  But if you can’t wait: download it here. You can also see out policies page HERE and our publications page HERE.

4. Anchor institutions

CIS Tower and One Angel Square

The Co-operative: an important Anchor Institution in our region. By The Co-operative (One Angel Square) [CC BY 2.0 (http://creativecommons.org/

For CLES1 directors Jackson and McInroy

…an anchor institution is an organisation which has a key stake in a place. It will have significant levels of spend and numbers of jobs, and is extremely unlikely to leave due to market forces. Anchor institutions typically include: local authorities, universities, further education colleges, hospital trusts, and housing organisations.2

A government sponsored study gives some more detail:

The concept of anchor institutions emerged from the US where it has become an integral part of urban regeneration policy and practice. It is typically related to spatial immobility, large size and strategic contribution to the local economy as purchaser and employer. …..
Anchor institutions must have a social role, a social purpose which enables it to develop mutually beneficial and sustainable relationships within the host community.
Possible anchor institutions include non-profit organisations such as higher education institutions…, for instance, university business schools, academic medical centres, cultural institutions including museums, libraries and performance arts facilities, religious and faith-based establishments and performance arts centres, utility companies, military bases, sports clubs and, under certain circumstances, large private sector organisations

Our own thinking emphasises using the wealth generated and located locally to invest in local pro-environmental and pro-social development, rather than following the path of dependence on capital external to the city or region4. The work CLES has done with Anchor Institutions in Preston (also Manchester5 and Belfast) has focussed chiefly on their role in procurement of goods and services6. They demonstrate their positive impact on local employment and value retained locally. Another study, by Leeds Beckett and York St John Universities7, found similar results in the Leeds city region. Similar thinking underpins our earlier work on pay inequality in local government and its supply chains8 and the requirement of the Living Wage Campaign that accredited Living Wage employers also mandate the Living Wage in their supply chains9.

But there are other aspects to the role of Anchor Institutions: Jackson and McInroy10 suggest that this could focus on two areas: local financial enabling and local ownership enabling. The following proposals build on the CLES work in relation to our concept of the Viable Economy, thereby going beyond the merely economic benefits of these institutions.

  1. 4.1 Maximising procurement and employment benefit.

Policy 4.11: Anchors promote good diet, housing, exercise, nature, equality and waste reduction through procurement, employment and place-outreach.

The thinking behind it:

If Anchor Institutions are potentially so influential, then they can exert an effect that is not only economic. They can influence all these additional areas, both through their economic leverage in procurement and contracting, partnership activity with other players, and as employers of large numbers of staff. Examples include preferred procurement from local social enterprises rather than big corporate suppliers, contracts to reduce pay ratios, contracts to prefer low carbon, low waste suppliers. Some universities, for example, have embraced the issue of environmental sustainability in procurement, but other dimensions of sustainability are less well developed11. Central Manchester Hospitals NHS Trust does specifically address the encouragement of local social enterprises bidding for tenders12.

Policy 4.12: Organisations, public and private can be encouraged to pay the Living Wage as a minimum, using the both the hard power of procurement and the soft power of agenda and consensus-shaping.

The thinking behind it:

Our city region has very high levels of economic and social inequality. As a recent Resolution Foundation report showed, reductions in inequality between 2004 and 2008 were reversed between 2008 and 2012, with disparities between high and low income groups reaching a new high13. Indeed reading this report it is hard to escape the conclusion that economic expansion both the pre and post crash period have resulted in increasing inequalities, both within and between neighbourhoods.

Implementing the Living Wage for an organisation’s workforce, and through its supply chain is one way of improving this situation. The Living Wage Campaign has been one of Greater Manchester’s relative successes14. It encourages organisations to not just pay the Living Wage, but also go public with their commitment through independent accreditation. Of the local authorities in the conurbation, only Salford has done this, although some 100 other local employers have done so.

Policy 4.13: Maximum salaries, and pay ratios between the highest and lowest paid, can be defined, implemented (and kept to) and also mandated through the supply chain.

The thinking behind it:

At the other end of the income distribution, salaries can be obscenely high, a sequestration of money that could be distributed more fairly. Some organisations, especially those in the co-operative sector, specify narrow pay ratios and do not experience difficulties in recruiting committed and skilled senior staff: these ratios can still be in the region of 1:8. Our survey of local government found higher ratios and little in the way of coherent justification for paying such high rates other than a reference to market competition15.

Note that these two policies only go so far: other issues are poverty of the self-employed, under-employed or those excluded from employment, and those unable to do employed work for a variety of reasons. They also do not address inequalities in wealth. Nevertheless the two policy proposals for anchor institutions are feasible while potentially transformative.

  1. 4.2 Educational anchor institutions to maximise their usefulness and impact locally.

Policy 4.21: Universities as citizen resources, open to all.

The thinking behind it:

Our universities are typically seen as elite institutions, not somewhere where many ordinary citizens of the region would feel welcome. This is despite some traditions of public access and service. Universities, however, are Anchor Institutions, with a “licence to operate” in our community. There needs to be a persistent demand that their primary responsibility is to serve that community whilst recognising that many have already built commitments of this sort into their strategies (see, for example, University of Manchester’s Inspiring Communities16 and Manchester Metropolitan University’s strategy17). Examples could include offering free and low cost consultancy to non-profit and small-profit initiatives, courses on environmental, economic and political literacy, and pursuing a research agenda that is at once locally responsive and internationally reputable. This “community in-reach and university outreach”18 needs to tap all the resources of Universities, not just education and research but facilities and networks too.

Policy 4.22: Schools and colleges as community hubs.

The thinking behind it:

Likewise, schools and colleges are not going to go away. As common reference points in our neighbourhoods their role, accessibility and impact could be enhanced by partnering with health, housing, leisure, and adult learning: some of which happens (or has happened in the past) in some places but on a haphazard and unsystematic basis19. Now, with city-regional devolution there is an opportunity to establish a Mancunian model of “full service”, extended, community schools and colleges. To help build and strengthen community, facilities could be available to citizens free or very low cost outside teaching hours.

4.3 Co-operative enterprise and governance.

Policy 4.31: Properly fund local not-for profit, co-operative and smaller, quality orientated providers.

The thinking behind it:

If we want institutions and economic arrangements that serve people then the co-operative model, with its deep roots in the region, should be widely supported. This will make it more likely that business and social priorities will be appropriate, that wealth is retained locally rather than leaching out into profits invested elsewhere. Similarly, many small and medium sized businesses are locally based, staffed and owned, with loyalty to their district: are less likely to ruthlessly seek profit extraction and more likely to return value to the community20. Anchor institutions can both procure from such organisations and also support them logistically. To take the example of social care, such providers can be helped, for example with common services and preferred provider status, constructing an alternative to profiteering corporate firms under the new DevoManc health and social care regime21.

Policy 4.32: Public bodies redesigned on co-operative model. Adopt co-operative council model across the region, including at GMCA level.

The thinking behind it:

A number of UK councils have adopted a co-operative approach to both their relationship with the public and to the way services are delivered. This means being more open and collaborative in the way policy and decision-making are approached, and following co-operative principles in the delivery of services. The council’s spending power is deployed so it achieves a greater social return for citizens than it would in a typical purchaser-provider market model. Oldham is a co-operative council22 and both Rochdale and Salford are members of the Co-operative Councils Innovation Network23. Signing up to co-operative principles does not necessarily mean real change although councils like Oldham can point to real benefit24.

Our proposal is for the extension of this model throughout the public sector in the city region, applying it to all councils and the Combined Authority, and (in appropriately adjusted form) to the variety of public bodies such as NHS Trusts, Housing Trusts, and the Police and Fire Services. Such a mainstreaming of the approach could make co-operative working the norm, a viable alternative to the narrow marketised model of public service that has dominated the last thirty years. This would have benefits in terms of citizen engagement and the renewal of democracy as well as in the more equitable creation and distribution of social and economic value.

…..to be continued, or if you want it now, download here:  https://steadystatemanchester.files.wordpress.com/2017/03/policies-for-the-city-region-the-longer-version-v3-final.pdf

You can also see our policies page HERE and our publications page HERE.

1CLES: Centre for Local Economic Strategies, a Manchester-based NGO.

2Jackson, M. & McInroy, N (2015). Creating A Good Local Economy: The Role Of Anchor Institutions. Manchester: CLES. http://www.cles.org.uk/wp-content/uploads/2015/04/Anchor-institutions.pdf p.7

3UKCES (2015). Anchor institutions and small firms in the UK: A review of the literature on anchor institutions and their role in developing management and leadership skills in small firms. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/414390/Anchor_institutions_and_small_firms.pdf p. 9.

4See Appendix to our previous Working Paper “So What Would You Do”: https://steadystatemanchester.files.wordpress.com/2016/11/so-what-would-you-do-v2-0.pdf.

5Jackson, M. (2017). The Power of Procurement II: The policy & practice ofManchester City Council: 10 years on. Manchester, CLES. https://cles.org.uk/wp-content/uploads/2017/02/The-Power-of-Procurement-II-the-policy-and-practice-of-Manchester-City-Council-10-years-on_web-version.pdf

6Jackson, M. and McInroy, N. (2017). Community Wealth Building through Anchor Institutions. CLES. https://cles.org.uk/our-work/publications/community-wealth-building-through-anchor-institutions/

7Devins, D., Gold, J., Boak, Garvey, R. and Willis, P. (2017). Maximising the local impact of anchor institutions: a case study of Leeds City Region. https://www.jrf.org.uk/report/maximising-local-impact-anchor-institutions-case-study-leeds-city-region?

9Living Wage Foundation. (n.d.) How to become a Living Wage employer. http://www.livingwage.org.uk/how-become-living-wage-employer

10See also the wider framework from CLES allies New Start: Goff, C. (2016). Creating Good City Economies in the UK. London: New Start. Retrieved from http://newstartmag.co.uk/wp-content/uploads/2016/09/Good-City-Economies.pdf

11University of Manchester What is Responsible? (web page) http://www.procurement.manchester.ac.uk/procurementexcellence/responsible-procurement/
Manchester Metropolitan University (2016). Sustainable and Ethical Procurement Policy. http://www.mmu.ac.uk/policy/pdf/policy_ref_sustainableprocurement.pdf

13Resolution Foundation (2016). New Order: Devolution and the future of living standards in Greater Manchester. http://www.resolutionfoundation.org/app/uploads/2016/11/New-order.pdf Table 1 p. 34.

14GM Living Wage Campaign (2016). We’ve reached 100 Living Wage Employers! https://gmlivingwage.org/what-is-the-living-wage/

16University of Manchester (n.d.). Inspiring Communities: Working together for mutual benefit -Local community social engagement plan, 2016‐2019. http://documents.manchester.ac.uk/display.aspx?DocID=30998

17Manchester Metropolitan University (n.d.). Our Strategy. http://www2.mmu.ac.uk/about-us/our-strategy/

18Kagan, C. and Duggan, K. (2007). We Don’t Believe You Want a Genuine Partnership’: Universities’ Work with Communities. Manchester: RIHSC. https://www.publicengagement.ac.uk/sites/default/files/publication/we_dont_believe_you_want_a_genuine_partnership.pdf

19Cummings, C., Dyson, A. and Todd, L. (2011) Beyond the School Gate: Can Full Service and Extended Schools Overcome Disadvantage? London, Routledge

20CLES (2013). Local Procurement: making the Most of Small Businesses One Year On. Federation of Small Businesses/CLES. http://www.fsb.org.uk/docs/default-source/Publications/publi_spec_scotprocure_july2013.pdf?sfvrsn=0

21Co-operative Party (2016). Taking Care: A co-operative vision for social care in England. http://www.councils.coop/wp-content/uploads/2016/11/taking-care-FINAL-web.pdf

22Oldham Council (n.d.). Our co-operative approach (web page) http://www.oldham.gov.uk/info/200572/co-operative_oldham/1189/our_co-operative_approach

23See Co-operative Councils Innovation Network website: http://www.coopinnovation.co.uk/

24Brownridge, B. (2017). Becoming a co-operative council isn’t a quick fix, it takes time, effort and a genuine desire to work with communities. Co-operative Councils Innovation Network. http://www.councils.coop/becoming-co-operative-council-isnt-quick-fix-takes-time-effort-genuine-desire-work-communities/

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