Local multiplier

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The Local Multiplier 3 (LM3) tool enables you – whether you are a community organisation, business leader, or government official – to measure how much your organisation or initiative impacts on the local economy. LM3 takes its name from the Keynesian multiplier, which has been used since the early 20th century to measure how income entering an economy then circulates within it. The theory is that a change in income has a multiplied impact on that economy. The New Economics Foundation have adapted it for use at the local level, and measure three ‘rounds’ of spending.

Across the UK and further afield, people have taken up LM3 to figure out how to make the most of the money that they do have so that their communities remain vibrant places to live.

Eden Community Outdoors, a social enterprise in Cumbria, commented: LM3 ‘…has raised awareness of how communities can benefit when projects invest their income back into the local economy and how this way of thinking can be used to prepare the ground for small scale community enterprise.


New Economics Foundation: [1]