Keeping as much money in the region as possible. It's an oh so simple idea. So simple that the idea would be waved away if it hadn't already proven itself in practice. In Preston, England - just north of Manchester and Liverpool - they are experiencing that it works.
When Uno Sissingh (manager at Meppel-based supplier of lab supplies Boom) first saw the so-called Preston model, he immediately embraced it. He sees it as a remedy for the somewhat wobbly legs of the Northern Netherlands: when purchasing products and services, it is necessary to look a little smarter at suppliers from the region.
The back end of procurement is forgotten
Uno Sissingh cites an example. An organization from the North had to re-tender the ict, selected the cheapest provider and bypassed the northern company that had provided the ict until then. Sissingh: "The new party became a company from Brabant that had to travel to get to the northern Netherlands. The northern company then had to lay off people and is now bankrupt. So a few pennies are made on the front end, but on the back end you get unemployed people in return and the new provider is also less sustainable.' Only the costs at the front are looked at and the back end is forgotten, says Sissingh. 'It's a matter of awareness,' he believes. In northern England's Preston and surrounding area (Lancashire), they are now very aware of these factors. And with success because in recent years the region has developed from a desolate and deprived region into one of England's most attractive areas.
Prosperity, welfare and well-being
Sissingh lists the three focal points of the so-called Preston model. The first is prosperity. Through targeted purchasing and procurement policies, efforts are made to maximize the return of money from the region to the region. The second and third, welfare and well-being, are somewhat related to the first spearhead. For prosperity and money facilitate the deployment and stimulation of social gains (cooperatives, social equality, innovation, green, sustainability) and individual position (happiness, self-reliance, health).
Preston arrived at these spearheads after the 2008 crisis plunged the region into deep misery and a proposed €800 million investment in a new shopping center was reversed. The misery proved a healthy breeding ground for creativity and drive for innovation. Entrenched institutions were given a crucial and leading (example) role. These are the institutions that have no right to exist if placed elsewhere, such as the provinces or the university.
Money must stay in region
Of the 2 billion in procurement, 40 percent previously flowed back to the region, now it is 63 percent. In other words, previously someone elsewhere in the world drove a nice car because of the money made in Preston, now people in the Preston region have jobs and income from the money that stays in the region. That's how simple the model works. Uno Sissingh: "It's a matter of looking at a tender in a smarter and more measured way. You are often told that European regulations limit the room for maneuver. That's not true. You can factor in 70 percent of the costs, but also 30 percent. You look not only at the procurement costs, but also at the follow-up costs, sustainability and impact for the region.'
Tree spends profits in region
Focusing on regional or local purchasing and procurement leads to more money and prosperity in the region, according to Sissingh. The Northern Netherlands has the instruments to initiate such a policy. NCG (National Coordinator Groningen) and NPG (National Program Groningen), for example, can land money in the region, and the policy already in place with Purchasing Platform North Netherlands should be optimized. Sissingh: 'It is important, however, to consider carefully whether money goes to a branch office or to a real company in the region.' His own employer Boom already adheres to the Preston model. A third of the profit goes to the shareholders and equal amounts to investments in innovation and personnel. Sissingh: 'Most of the profit therefore stays in the region, because the shareholders also live there.'
When purchasing, look more closely
The Preston model does smack somewhat of the oh-so-desired protectionism. Sissingh decidedly: "That is totally out of the question. It only ensures a level playing field in the region. You have to look more closely at procurement. A large construction company may be able to deliver a project cheaper, but what good is it as a region if cheap workers from abroad come along and the regional construction workers have no work? It adds costs, it's not sustainable and the money goes elsewhere.' This is the time for the Northern Netherlands to get started on the Preston model. The aftermath of "corona" is not yet clear and this is a first step to absorb any blows.
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