Like many district councils, Sevenoaks DC has in recent years been forced to respond to dwindling financial support from central government.
As Peter Fleming (Con), leader of the council, says: “We had an issue with our revenue budget. Our government funding was disappearing, and we needed to fill that gap. And not all that gap could be found by making savings.”
Commercialisation therefore became a necessity to support public services.
By the council leader’s estimate, some 80-85% of commercial income comes from its property portfolio. Among the assets owned are a pub, a petrol station, office buildings and development sites. The council also charges for green waste collection and runs a garage for MoT tests.
A lack of previous property experience meant that finding expertise from outside was vital. The council brought in expertise in the short term to educate itself and ask the right questions of future partners.
The council ended up using a large real estate company to give it access to a range of skills. “Part of it is about relationship building. It is about going to the right people at the right time,” Cllr Fleming says.
Investing in property is not without risks, a fact highlighted by suggestions from housing and communities secretary James Brokenshire that the government might intervene in council investments. But managing risk for investments does not unduly faze Sevenoaks’ leader.
The council’s 10-year rolling budget also gives it a sense of what the years ahead look like and makes it easier to balance peaks and troughs along the way.
“I think when we were first having these conversations as a council we had money in the bank,” he says. “When we looked at it against inflation we were losing value every single day. When we looked at it in those terms the risk of doing nothing was as great as doing something.”
Read LGC and DWF’s full report: Commercialisation: Safeguarding the future of local public service delivery
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Commercial activity is risky business, but councils lack alternatives
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'Strategy, accountability and legal structure can ensure commercial success'
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How councils can match commercial risks with returns
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Investment, joint venture and trading: How councils seek income
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Joanne Pitt: Property mustn't eclipse other commercial successes
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Wirral: 'It's income generation, not commercialisation'
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'Council commercial approaches hinge on core questions'
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'Legal powers exist for all the models councils need'
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Manjeet Gill: Commercial activity needs a clear, fresh strategy
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Plymouth: 'We're not scared to invest to tackle market failure'
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'Diverse commercial approaches will demand diverse skills'
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Questions councils must answer to navigate commercialisation
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'Commercial activity will bolster revenues and safeguard services'
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Sevenoaks: 'Our funding gap couldn't be filled just by saving'
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