Astrologer – Artist – Activist – Coach – Writer

Plugging the Leaks

Plugging the Leaks is one of the many programmes created by the New Economics Foundation (nef) in London.  I (Charmaine Treherne) worked for the South African New Economics Foundation (SANE) for two years during which time I learned how to facilitate their workshops, including Plugging the Leaks which I successfully ran with the Price Waterhouse Cooper’s Social Justice programme in 2003.

How it Works:

Using the metaphor of a leaky bucket we open up conversations in communities about a local economy and money flows into and out of that community. We explain the local economy as a bucket with water being poured into it – to represent for example tourism spending, local school budgets, benefits or salaries of people living in the area. Then we consider all the ways that money then leaks out of the bucket, such as taxes, utilities, and purchases of goods and services from outside of the area.

In a plugging the leaks approach all those outflows of money are potential enterprise opportunities for people. It builds up a community’s confidence in its own ability to determine its economic destiny; to make decisions about how the community wants the local economy to develop. We then support that action through a coaching approach, drawing on local networks of support. In deciding on what actions to take forward, it is important that the local economic, social and environmental impact is understood – the impact on the triple bottom line.

Suppose you paint a coin red and watch where it goes. Every time it changes hands within a community, it means income for a local person. The more times it changes hands, the better for that community. In fact, money that is re-spent in a local area is the same as attracting new money into that area. Either way, it is new money into the hands of the person who receives it. This is termed the local multiplier.

In addition to considering money flows, we also look at how other resources such as energy, water and consumer products flow into a community (their source) and how they leave that community (the waste created) to find enterprising ways a community could reduce their impact on the environment.

The starting point is the energy for changing the local economy from within a community, and the natural resourcefulness, skills and passions of local people. The principle behind this approach is that people who live and work in a place, and others who care about its future, are best positioned to find enterprising solutions, implement them and reap the rewards.

In many places, local energy and creativity become trapped, and different parts of the economy – local businesses, voluntary sector agencies, and the public sector – do not talk to each other to maximise local opportunities. For the local economy to undergo durable and robust change, the capability and energy of everybody needs to be harnessed. We believe that promoting and supporting local enterprise should be part of any strategy for economic regeneration. Local enterprises are more likely to employ local people, provide services to improve the local quality of life, spend money locally and so circulate wealth in the community, promote community cohesion and, by reducing transportation of goods from across communities, are likely to have a smaller environmental footprint. The approach also recognises that communities do not develop their local economies in isolation.

Click on the links in the graph below to find out more:

Within a community a plugging the leaks approach supports a move from an awareness of opportunities to taking action by exploring four questions:

  • What are the opportunities for enterprise development of both new and existing businesses – What do we want to do?
  • How could goods and services be delivered differently – to keep money circulating locally, and reduce waste?
  • How can we mobilise resources to do what we want to do?
  • Will these actions result in positive local economic, social and environmental outcomes?

Within the public sector (State sector, and other institutions), a Plugging the Leaks approach supports this sector to open up local employment and business opportunities in the way they contract and deliver capital projects, and purchase goods and services.

BucketThe issue is not necessarily that too little money flows into a neighbourhood. Rather, it is what consumers, public services and businesses do with that money. Too often it is spent on services with no local presence, and so immediately leaves the area.

The workshop concludes through creating an action plan which includes drawing on local networks of support for development.

The workshop can be run over one, two or three days. As wide a representation of the community should be in attendance to get the best result.

All of the NEF materials are open source.

Other New Economic Workshops include:

Creating your own Community Currency. A community exchange system is a great way for giving value to services that are regarded in mainstream economy as having little value. Click here to see the Cape Town Talent Exchange.

ABOUT NEF: The New Economics Foundation (NEF) is the UK’s leading think tank promoting social, economic and environmental justice. Our aim is to transform the economy so that it works for people and the planet.The UK and most of the world’s economies are increasingly unsustainable, unfair and unstable. It is not even making us any happier – many of the richest countries in the world do not have the highest wellbeing.From climate change to the financial crisis it is clear the current economic system is not fit for purpose. We need a great transition to a new economics that can deliver for people and the planet.NEF’s mission is to kick-start the move to a new economy through big ideas and fresh thinking. We do this through

  1. High quality, ground-breaking research that shows what is wrong with the current economy and how it can be better
  2. Demonstrating the power of our ideas by putting them into action
  3. Working with other organisations in the UK and across the world, to build a movement for economic change

NEF is fully independent of any political party. We rely on donations and help from our thousands of supporters to effect social change.

There are many different kinds of community workshops.

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