Background
Cairngorms National Park Authority (CNPA) were interested in exploring ways to capture the socio-economic contribution of different land uses within the park. Of particular interest were the more ‘local and estate level’ contributions, as previous research focused more on ‘park and national’ contributions.
The scoping study sought to test the feasibility of capturing such contributions, including the available primary data, responsiveness from estate owners and applicability of secondary data.
Approach
One estate was selected for the case study primarily due to their willingness to engage with the research, provide relevant data and the estates’ diversity of land-use.
The scoping study focused on enterprises within two land management objectives:
- The game activities enterprise.
- The sheep farming enterprise.
It explored the economic, environmental and social contributions of these activities using the framework of ecosystems services valuation and LM3 modelling.
To estimate the annual value of the ecosystem services that flow from each enterprise, NEF Consulting reviewed existing literature to identify appropriate per hectare estimates of the value of ecosystems services that result from each land use type. These estimates, generated by national statistics offices, represent national averages.
We scaled up the annual benefit value to the size of each enterprise and used LM3 analysis to quantify the annual economic contribution of each land use.
LM3 – measuring the local multiplier effect
The multiplier effect results from the demand for goods and services stimulating further rounds of spending – in other words “one person’s spending is another’s income”.
LM3 measures how income entering the local economy circulates within it, across three ‘rounds’ of spending.
It was developed on the idea of the ‘leaky bucket’. If you imagine the local economy as a bucket full of water, every time you spend money that goes outside the local area, it leaks out the bucket. Generally, our energy is focused on trying to pour more money into an area so as to keep filling up the bucket. However, a better starting point for strengthening the local economy should be to prevent the money leaking out in the first place.
ROUND 1 Direct Economic Contribution: We collected turnover data for each enterprise to quantify the direct economic contribution.
ROUND 2 Indirect Economic Contribution: Data on each enterprise’s expenditure was used to estimate the amount of the gross project income spent on locally-based people (payroll) and organisations (non-payroll).
ROUND 3 Induced Economic Contribution: As, in this case, we were unable to contact suppliers or people directly employed by the enterprises, we used national averages to quantify the amount of money re-spent locally by the people and organisations on which each enterprise spent money, whether or not they were based locally.
Summary
LM3 is a useful way of assessing the local economic contribution of different land uses.
