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A business model for commercially-savvy local authorities to follow

Gerry Clarkson CBE, leader of Ashford Borough Council and a former firefighter and CEO of the London Fire & Civil Defence Authority, argues that a hard-nosed business approach can net real revenue for under-pressure councils.

Much has been written recently about financial pressures on local authorities, with the suggestion in some quarters that councils are ill-equipped to take on the job of finding alternative sources of funding. I’d like to share the experiences we’ve had in Ashford in adopting a more commercially-savvy approach.

Good asset management, planning ahead and investing in long-term assets that produce a net income are essential.

Last October, the Independent Commission on Local Government Finance outlined its vision to build a local government finance system that promotes self-reliance, innovation and entrepreneurialism – key themes that we’ve long embraced in our fast-growing corner of the south east.

Ashford Borough Council is a highly successful business and we punch well above our weight on the national and international stage. For example, our model for growth is on the chancellor of the exchequer’s radar, which is why I was recently invited to make a presentation to Treasury officials about The AshFORd model: A blueprint for integrated growth.

When we exhibited at the first MIPIM UK event in London last autumn we were holding our own against councils with huge marketing budgets like the City of London, Manchester, Leeds and Cardiff.

We have major development projects underway, overseen by a strategic board, and we invite partners from the private sector to join us for one reason only – to help us deliver. It’s not a talking shop. It’s about getting shovels in the ground as quickly as possible.

This hard-nosed approach is one of the reasons why Ashford topped a poll as the best business destination in Kent in August 2014.

Inward investment agency Locate in Kent asked developers, investors, agents and businesses for their views and Ashford’s connectivity – our 38-minute high-speed rail link to London and Eurostar services to France and Belgium are unrivalled – and business-friendly local authority were ranked top.

We’re not afraid to make bold decisions – in the past 18 months we’ve bought the biggest office block in Ashford for £7.8m and acquired a shopping centre. The 12-storey International House occupies a plum site alongside the international railway station. Under our astute stewardship, we’ve increased income and the value of the asset by maximising the space we can rent. As a result, International House is now virtually full and annual rental income has substantially improved.

Perhaps an even bigger challenge is our acquisition of Park Mall shopping centre. Around a third of Park Mall’s 34 units stand empty but we’re breathing new life into the site, with the first new tenant announced and more in the pipeline. Buying Park Mall creates an asset and income stream and tallies with our aim to reinvigorate the town centre. High streets are changing and we must evolve to survive and prosper.

Of course every successful business relies on a highly-motivated and skilled workforce and this where Ashford leads the way. Despite pressure on budgets, we have invested in our people. From April 2015, staff are paid a minimum of £8 per hour and apprentices get 15p per hour above the national minimum wage.

Employees are encouraged to learn foreign languages, while ABC’s graduate work placement scheme for local people helps provide a stepping stone to a permanent job.

But this sharp business focus doesn’t mean our residents are ignored and local services suffer. We continue to boast the lowest council tax in Kent while providing highly cost-effective services, for example, and we’re now officially the most improved recycling area in the country.

The authority continues to pursue large-scale development projects that will unlock major opportunities, deliver jobs, housing, retail and cultural facilities. We’re in good shape and well-placed to meet the challenges ahead.

^{Above: Gerry Clarkson CBE, leader of Ashford Borough Council}