It’s the economy, stupid!
Whilst Spelthorne Council was recently singled out by the national press for ‘punting like drunken sailors all around the country’ after they made a (reportedly) mammoth £360m investment in British Petroleum’s office park last September, it’s indicative of the steps local authorities across the country are taking to ensure that they secure reliable long-term income streams in a world when central government funding ends in 2020. They’ve got to keep the metaphorical lights on somehow, and investing in assets both within and outside of their administrative boundaries is the increasingly frequent choice for many.
Indeed, Cllr Peter Fleming in Sevenoaks is Leader of the first council in England to be financially self-sustaining. Realising you can’t plug the funding gap by continuously increasing council tax for raise funds through new homes with 90% of the region being greenbelt, the Council now own a pub, a petrol station, an office block and is now in the process of building a Premier Inn. In Cllr Fleming’s own words ‘we got to a position a few years ago where the risk of doing nothing was far greater than the risk of doing nothing’.
So whilst the Council aren’t going to be buying your local corner shop and greasy spoon anytime soon, they are becoming increasingly commercial so they can protect the most vulnerable people in their communities and ensure that the bins still get collected.
The key will be ensuring that councils make the right investments and being commercially savvy. With their ability to borrow at a cheaper rate than private organisations and with repayment periods longer than most can dream of, the opportunity for securing the sustainable income streams they crave is clear. However, councils will inevitably make mistakes and whilst private companies that make mistakes fall back onto bankruptcy proceedings, no council should risk following suit.