Purpose – The purpose of this paper is to investigate public procurement activity within the Cumbria County Council and its effects on the local supply chain. The paper seeks to identify the role of public procurement within the county, in relation to the propensity for income retention (or leakage) at local level. In addition, the paper seeks to consider issues related to public procurement in peripheral and rural areas, with particular reference to small and medium businesses operating in Cumbria, and to provide a spatial analysis of money flows at regional and national level. Design/methodology/approach – Quantitative data, from primary and secondary sources, were obtained from a survey questionnaire conducted among the Council's suppliers and from SpikesCavell, an agency specializing in collecting procurement data, respectively. The study focuses on public sector suppliers. It analyses suppliers' attributes and characteristics such as size, location and sector of activity are used in order to explore suppliers' patterns of spend in relation to inward and outward cash‐flows within the County. Additionally, the paper explores the effects of the local authority's procurement in terms of advantages/disadvantages for the local supply chain. Findings – The paper highlights the ability of competitive tendering systems to achieve cash saving and reduce wastage; but questions whether the adoption of such systems in the public sector produces positive economic effects on the local supply chain in peripheral and remote areas. Originality/value – There is a lack of research on the impact of public procurement at regional and sub‐regional level and its significance as a source of income and businesses operating within local supply chains. This paper seeks to contribute to filling this research gap by presenting and analysing data associated with procurement activity within a peripheral local authority.