You’ve probably heard of Billy the Bee; you may have seen him around the village and I’m sure you know that Billy wants us all to “Buy It Locally”.
But I’ll wager you didn’t know that he’s got a leaky bucket!
The Leaky Bucket is a simple way to explain the local economy; the economy of Wheathampstead.
Imagine the local economy as a bucket. Nothing fancy or complicated; just an ordinary bucket like the one under the kitchen sink. If you have £10 and you spend it in Wheathampstead, the £10 stays in the bucket. But if you use it to eat out in St Albans it doesn't stay in the bucket. Spending outside Wheathampstead is like a leak in the bucket: the tenner leaks out because you chose to eat outside the local area.
So, all the money that flows into Wheathampstead every week/month/year is like water flowing into the bucket and it consists of; wages, benefits, business profits and all other income earned by everybody in the village. But sadly, our bucket can’t keep hold of all the water because it has lots of holes in it. Lots of the money that comes into Wheathampstead goes straight back out again on, for example; utility and phone bills, taxes, rent or mortgage, shopping outside the local area or on-line, faraway takeaways, external contractors and distant day-care etc. etc. etc.
Why does a leaky bucket matter? The benefits of improving the local economy include maintaining a viable and vibrant High Street, boosting employment and increasing disposable income. Plus, there are intangible benefits in terms of community and social capital. Small-scale, locally owned businesses create communities that are more entrepreneurial, connected and prosperous.
If we each spent our money in the local area, then it would stay inside the bucket and of course this goes for businesses as well as individuals. Some businesses employ local people, hence keeping the money inside the bucket. Some businesses buy products and materials from the local area and again this keeps the money inside the bucket. Hence buying locally keeps it inside the bucket.
Let’s go back to our tenner again…every time we have £10 to spend, we have to decide whether to spend it locally or outside of Wheathampstead and every time we choose to spend it locally, we are actually boosting the local economy. It really is as simple as that.
The economy is very interconnected. It is dependent on each individual spender and the decisions made by individuals affect others in our local area. Because of this it is everybody's issue.
Wouldn’t it be great if we could find ways of stopping all the £10s from leaking out? For the example of eating out, we could choose one of local restaurants and reduce the leak. And if we use a local company or tradesman to do maintenance work rather than an external contractor then there'll be even more in the bucket.
Hopefully Billy’s Leaky Bucket has helped you understand the ins and outs of the local economy and next time we’ll explore the concepts further: In Part 2 of this trilogy we will look closer at the “Money Go Round” and the local multiplier effect of spending locally. Then in Part 3 we explore some specific leaks and how we can plug those leaks and in doing so boost Wheathampstead’s local economy.