Local Multiplier Analysis
Helping local communities to maximise benefits from local investment.
What is a local multiplier (LM3) model?
A clear, simple way to demonstrate the positive impact that can be gained in a regeneration / investment area through greater local circulation of the project funding. To do this you need to look at how the regeneration funding is currently entering and leaving the community and, more importantly, to identify how to keep more of it in the area.
Why LM3?
LM simply stands for ‘Local Multiplier’, and ‘3’ refers to the number of rounds measured in assessing local money flows. Round 1 is known as the initial income. This could be the total spend on a project, or the total annual turnover or sales. Round 2 then breaks down this initial income to trace where the money flow has taken this initial income (local or national, into the community or away from the local community). Round three looks at how that local income is then re-spent. Three rounds provides ample data to assess an LM3 value.
Why carry out a local multiplier model?
If a business is seeking to receive public funds, its ability to prove its value to the community in clear, quantifiable terms will help to persuade public sources to fund the business. The aim of measuring local money flows is to make sure money is flowing to and staying in local community as much as possible. It is about increasing local linkages in order to maximise the use of all incoming inward investment. Ordinary businesses stand to benefit from measuring their local economic impacts. If they really understand the local economy, this will improve marketing and product development, as well as staff morale and customer relations.
What are the tangible results?
LM3 is an extremely useful tool in highlighting areas of leakage; money flowing out of the local economy. To improve an LM3 score and have a greater impact on the local economy you need to plug the leaks. Without an LM3 analysis identifying ways in which you can more effectively promote the local economy is problematic. Previous LM3 analysis has help to create impetus for programmes that:
• Target local suppliers, local sourcing (positive environmental impacts)
• Target local recruitment
• Procurement / Tender Targets
• Encourage local talent development (apprenticeships)
• Utilise relationships with contractors and sub-contractors to maximise LM3 impact
To find out how Incite On’s multiplier work can benefit your project / business contact us at:
michaelsimpkins@inciteon.co.uk
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