Dr Mawera Karetai

At a recent candidate meeting in Matatā, I was concerned that we did not hear enough from the candidates about the value to the community of protecting our anchor institutions.

Anchor institutions are organisations deeply rooted in a community with a vested interest in its long-term wellbeing. These include public schools, hospitals, libraries, local government agencies, hauora, and major employers. Their “sticky capital” (large infrastructure and networks unlikely to relocate) means their presence anchors economic, educational, social, and cultural activity. They are where our jobs, our social investment, and our ability to maintain a thriving community comes from.

The loss of anchor institutions in small communities often leads to widespread socio-economic decline, eroding a town’s viability and sense of identity. Anchor institutions hold communities together by providing stable employment, essential services, and social cohesion. When an anchor institution closes or leaves, stable jobs and local procurement disappear, causing immediate economic contraction. Residents lose secure employment, leading to higher unemployment and lower household incomes. Local businesses that supplied goods and services to the institution lose vital contracts, often forcing closure or downsizing.

Anchor institutions also foster social capital by bringing people together through shared services, events, and volunteering. When they disappear, opportunities to connect, such as school sports, events run by service groups, and cultural events, vanish, reducing community engagement and eroding local identity. Young families and skilled workers may leave in search of opportunities elsewhere, causing demographic decline and a “brain drain”.

Hospitals, clinics, and schools not only deliver essential services but also act to reduce health and social inequalities. Their loss can mean reduced access to healthcare, education, and support services, resulting in poorer physical and mental health outcomes, increased poverty, and isolation, especially among the elderly and vulnerable. Libraries, museums, and community halls host the cultural life of a small town. Their closure reduces access to the arts, public gatherings, and lifelong learning, undermining civic pride and belonging. Without institutions to convene people, democratic participation can fall, and local governance may become less responsive to residents.

The decline of anchor institutions in small communities not only results in job loss and social fragmentation, but also triggers a collapse in local investment and procurement, further accelerating town deterioration.

Anchor institutions play a critical role as steady investors, purchasers, and employers, directing significant capital into the local economy, especially when they intentionally choose to hire local residents and buy from local suppliers. When anchor institutions withdraw, their direct investments, such as in infrastructure, small business support, housing, and economic development, all disappear, creating a shortage of crucial capital for local projects.

The absence of these investments means fewer resources for business expansion and innovation, leading to reduced economic diversification and lower attractiveness for other investors or new enterprises. A reduction in anchor-led place-based investing undermines efforts to improve amenities like health care, education, housing, and public spaces, all of which are vital for sustained community resilience.

We are seeing this now, in central government’s intentional underfunding of our councils, hospitals and other anchor organisations.

Anchor institutions traditionally purchase their goods and services, from food, maintenance, and supplies to specialised technical services, from businesses in their own region.

As our small businesses come under pressure from a tough economy, and the willingness of people to source goods and services out of the community, the lack of availability forces an anchor to change its procurement policies, causing a cascading decline for local vendors and small businesses that depend heavily on these contracts.

With weakened demand, businesses often lay off workers or shut down, amplifying unemployment and impeding the creation or growth of local enterprises.

Active local procurement and hiring are fundamental to economic and social stability in small communities. By making deliberate choices to “buy local” and “employ local,” anchor institutions maximise the circulation of money within the region, foster entrepreneurship, and enable intergenerational wealth-building. Such strategies, like prioritising local suppliers for contracts or creating career pathways for local youth, counter economic leakage, retain talent, and build capacity for future innovation and leadership.

Ultimately, an anchor institution's commitment to local procurement and employment is indispensable for small towns’ survival and revival. Their loss removes a critical engine of local reinvestment, diminishing opportunities and hastening decline. All of this relies on the community supporting our small businesses. Without the small businesses, the anchor organisations simply can’t exist in the local community.

Please support our local businesses first, since without them, the community cannot flourish.