Measuring Local Economic Impact

Briefing: including use of LM3 (Local Multiplier 3)

You can can measure the local economic impact of your services using various indicators – this briefing explains and discusses the options, including use of the methodology LM3, Local Multiplier 3.

New Economics Foundation developed Local Multiplier 3 (LM3) as a way of measuring local economic impact. It can help in thinking about local money flows and how your organisation can practically improve its local economic impact. The model has been refined and improved based on work with all 26 local authorities in the North East of England, with over £3 billion of annual spending with 140,000 suppliers. This work formed an important step in influencing national procurement policy and areas of legislation such as Social Value Act and National procurement and sustainability policies.

LM3 measures how income entering the local economy then circulates within it. An economic multiplier effect describes the impact that spending has in the economy, taking into consideration knock-on effects. The measuring process starts with a source of income and follows how it is spent and re-spent within a defined geographic area.

A higher proportion of money re-spent in the local economy means a higher multiplier effect as more income is generated for local people. The more income you retain locally, or nationally, means more jobs, higher pay and more tax revenue for government, all of which leads to better living standards.

Who is it for?

This briefing is aimed at senior decision makers and leaders in the public sector including those in local authorities, education and the health services.

About NEF Consulting Briefings

For senior decision makers and leaders, the one day and half-day sessions usually provide a strategic overview of a specific methodology or way of working, its benefits and how you might incorporate it into your improvement strategy. All sessions are partly tailored to each group to ensure examples and other content is appropriate to your needs. They are highly interactive with question and answer sessions and discussions and we can tailor them further for an additional cost.

All briefings are available on a one-to-one basis or exclusively for your team. They are usually held at our offices in London but we can deliver them on-site for an additional cost. Please contact us for details.

Training Programme
Strategic overviews for leaders and practical training for teams.

We offer tailored on-site training and briefings on SROI, Theory of Change, measuring social impact, commissioning for outcomes and co-production, Total Contribution, measuring local economic impact, community economic development, the social value of research, and more.

Clients include local authorities, universities, public health services, NDPBs, charities, community groups, membership bodies, and responsible businesses.

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by @nefconsulting