Local Money Flows - bathtubs, hoovers and dustbins
Bathtubs, Hoovers and Dustbins are helpful analogies for spotting the strengths & shortcomings in enterprises. Although not pretending to be an in-depth study of different aspects of business, it is a helpful way of looking at the desirable and less desirable aspects to business. It is also a useful negotiation tool since bids for regeneration funding or for a planning agreement could be renegotiated by insisting that more dustbin-like or hoover-like tendencies of certain businesses take steps to move themselves towards increased bathtub characteristics. For example, in Leamington Spa’s SRB area this helped them to think through whether or not to support a particular business in its bid for SRB funding. Using the above analogy they concluded that the bid was from a dustbin – it was adding only a small number of jobs to the local area, yet was sourcing none of its goods locally, was not serving the local market, and would cause heavy traffic congestion. So the SRB body set about trying to build into the project some of the more positive aspects of hoovers and bathtubs so that the benefit to the area could be greater.
So the explanation goes as follows:
How much do local businesses contribute to the local economy? It’s not just their size: are they
Bathtubs
Bathtubs collect and re-circulate money locally. They
· Employ local people
· Buy in goods and services locally
· Remit profits locally
· May bring money into the local economy by selling goods and /or services externally.
Vacuum cleaners
Vacuum cleaners take money from the local economy and deposit it elsewhere. They
· Employ local people
· Remit profits elsewhere
· Replace local bathtubs
· Sell external goods or services
Dustbins
Dustbins not only take money away but leave a big mess behind! They
· Exploit a local resource
· Create local jobs (often temporary)
· Disturb the social or environmental fabric of the area while remitting profits elsewhere.
National supermarket chains are Vacuum Cleaners, so are banks and building societies which generally speaking take locally generated money and invest it elsewhere. The jobs created by Vacuum Cleaners, while contributing to the local economy, are working to take money from the local economy. The trick of local economic development is to create Bathtubs while minimising Vacuum Cleaners and Dustbins.
Examples
How to explore it
Traffic lights: green for go
First, explain that no business is a perfect example of a bathtub, vacuum cleaner or dustbin. Bearing this in mind, ask people to give examples of each in the local area, and to put them on a map of the local area. They can use sticky dots with numbers on and explain the numbers in a key at the side, or if you have a larger map, use mini-post-its and write the name of the business on.
What makes a business keep money in the local economy?
Ask people to define what makes a good bathtub.
They often come up with a list like…
√ Local sourcing of goods
√ Local suppliers of services e.g. plumbing, food for meetings
√ Local people as employees
√ Local ownership – the profits are more likely to be spent in the area
√ Local need – supplying to locals as well as to outsiders
√ Good reputation / service – encourages more people to come in to the shop, and to patronise nearby shops also
When is a bathtub not a bathtub?
Staff members at PLANED in Pembrokeshire did a practice ‘Plugging the Leaks’ for Narbeth, where PLANED is based. At first, they found that almost all the shops were bathtubs, according to most of the criteria about respending money locally. However, they realised that almost none of them were catering to local needs – local people still had to go elsewhere to buy the basics in life. SO despite being held up as a model for other places, Narbeth could increase its economic stability by also providing shops that cater for its own people.
Putting it into practice
Then look at how people can act by
· supporting existing bathtubs;
· establishing new bathtubs; or
· encouraging vacuum cleaners and dustbins to change so that they have more bathtub-like characteristics.
You can use it to renegotiate regeneration funding or planning agreements by insisting that the dustbin-like or vacuum cleaner-like tendencies of proposed businesses move towards bathtub characteristics. For example, in Leamington’s SRB area concluded that their bid was from a dustbin – it was adding only a small number of jobs to the local area, yet was sourcing none of its goods locally, wasn’t serving the local market, and would cause heavy traffic congestion. So the SRB body set about trying to build into the project some of the more positive aspects of bathtubs.
This option might resonate in a pilot area with a few large businesses, or a supermarket within it’s boundaries or catchment area. It’s also, if done quite lightly, a good ice breaker.