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Finding the right partners to drive economic growth

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As funding pressures intensify and demand for services grows, councils urgently need new ways to close the funding gap.

Because options for cutting costs are exhausted, councils must address the other side of the equation.

Economic growth is a powerful revenue generator for local authorities. A vibrant local economy means more businesses paying rates and more households paying council tax. More local jobs and more money in residents’ pockets can also reduce demand for local services.

However, with shrunken budgets and a diminished workforce, few authorities now have the resources to drive economic growth alone. They must look to private sector partners for complementary assets, such as financial investment and regeneration/development know-how, to stimulate economic growth.

The challenge for authorities is to attract and identify the right private sector investors and developers in building dynamic local economies. How can each authority make its area stand out as a contender for investment?

Developing an economic masterplan must be the starting point. The masterplan articulates the authority’s distinctive vision and sets out how it intends to deploy its assets, including people, property and planning powers, to achieve its goal. It speaks of clarity and commitment, and makes it easy for investors to see the opportunities.

How will these new partnerships look?

Councils that want to draw in private sector money and expertise should establish long-term partnerships, set within flexible frameworks that are relatively quick to create. These might take the form of a delivery programme, outlining how the parties intend to work together to deliver a pipeline of projects.

These are the polar opposite of rigid, complex structures such as the old private finance initiatives and public-private partnerships. These partnerships are built on sustainable programmes of activity with shared objectives and outcomes, not individual projects.

Within these partnerships, trust will be vital. There are clear signals that confirm partners’ honourable intentions. Do partners have a publicly stated intention to pursue public-private regeneration opportunities and a track record of successful delivery for other authorities?

Do they put forward senior people to show how much they value the relationship? Do they invest in the internal capabilities they need to meet their commitments?

This agile collaboration between the public and private sectors holds huge promise and some authorities are already seeing significant benefits. With the right partners, councils can drive growth, generate revenue and make inroads on the funding gap.

Peter Hogg, head of government and municipals, EC Harris

Article sponsored and supplied by EC Harris

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