Council set to go commercial to tackle cash crisis

editorial image

Ashfield’s cash-strapped District Council is set to sell more of its services commercially to replace funding lost from central government.

This week the authority announced it is exploring ways of generating income, including hiring out tradespeople to the private market, running a private lettings company and creating a £10 million commercial investment fund.

Deputy Leader Councillor Don Davis said the council is looking to grow and expand its services rather than see them “cut to the bone” as government cutbacks increasingly bite,

Since 2012 the council’s government funding has been cut from £14 million and is predicted to diminish to £7 million by 2020.

Council chiefs say the ideas are at an early stage and will not detract from existing services or be unfair competition for local businesses.

Ashfield District Council already offers private MOTs waste collection, glass recycling and pest control.

Coun Davis said: “We can’t stand still, in the face of government cutbacks.

“We have to look at a commercialisation agenda. It is either this or cut and cut until we have nothing left.

“The council has to look to make savings to help protect services.”

He stressed the suggestions were initial ideas at this stage.

Coun Davis added: “We are still exploring the viability of these and other commercial ideas and are very excited about the potential opportunities our commercial approach may bring.

“We hope this gives a clear signal to our residents that we are pushing the boundaries and determined to be as innovative as we can when it comes to bridging the financial gaps created by the reductions in government funding.”

Councillor Cheryl Butler, Leader of the Council said: “The desire to increase the council’s commercial approach is built on solid foundations with a number of highly valued areas already offering chargeable services to residents and businesses; such as Pest Control and Trade Waste.

“As a responsible Council, we want to ensure that any new or additional services will add value for our residents and local businesses. To do this, we must look to find a balance between innovation and ideas that have already worked elsewhere.”

Private services being looked at by the council include;

A Tree surgery service.

Currently the council pays a contractor to maintain trees in parks and open spaces. By creating an in house team the council could save money whilst offering a quality service to residents and businesses.

A private lettings company.

Coun Davis said the council already manages tenancies for more than 6,000 council properties.

He added: “Using our expertise we could provide a similar service to private sector landlords for a fee. The council has the potential to improve the quality of tenancy management in the private sector and create a new income stream.”

The authority could potentially become a private landlord, purchasing properties and renting them out. Coun Davis said a separate arms length operation run by the authority could offer private rented properties up to the Decent Homes standard. The money generated could be used to bolster the council’s General Fund which was under pressure.

This separate from the housing revenue account which council rents have to be ploughed back into.

Providing trusted and quality tradespeople.

Coun Davis said: “The council already employs skilled tradespeople like plumbers and electricians who manage and improve council houses.

“For an appropriate fee we could offer our services to residents who are looking for trusted tradespeople to do work in their own homes.”

It is not something that is currently available privately. We ahve invested in these people . “We would not allow it to detract from work done by the council. We are looking at ways to expand and offer better services and hope to create more jobs. It may allow us to bring new blood into it.”

A £10 million investment fund.

The council is looking to create a commercial investment fund to invest up to £10 million into property and other commercial ventures which would generate an income which could then be used to support existing services.

Edd de Coverly. service director place and communities said: “This will give us the advantage of historically low borrowing rates and invest in commercial property to achieve a far greater return for the council It will give us the potential to invest in things that create both a commercial return and help to regenerate our areas.”

The authority is to create three new jobs in a commercial team, including a commercial development manager a business development associate and a commercial insight analyst.

Ed de Coverl said the team would look at more detailed business cases.

He said: “Other councils have done similar things and we are looking to balance innovation with things we know have worked elsewhere.”

Independent councilor Jason Zadrozny said: “I am in favour of the idea of commercialisation . It is a good idea to bring in more money but I don’t trust the council to get it right .

“For example they have had a big drive on waste collection services for businesses and so far have managed to pick up only 50 businesses - that is not going to make a great deal of difference to finances.

“They should concentrate on getting one or two things right first and share the knowledge once they have worked things out.

“The primary function of the council is to provide a public service . The commercia side should be a secondary function not to detract from the day to day running.”