Cash-strapped councils are turning to private enterprise to plug their funding gaps – with mixed success

An artist's impression of the i360, from before its completion. Image: Marks Barfield.

The i-360 is a 162m-tall observation tower on Brighton’s seafront. It offers a fine view of the channel, the nearby Regency rooftops and, if you look hard enough, rough sleepers sheltering along the promenade.

The tourist attraction was funded by a £36m loan from the council, which it, in turn, borrowed from the government. The idea is that the tower will earn money from tourists which the authority can spend on cleaning the shop window of the city by the sea, freeing up council revenues for other projects.

In 2016-17, the council’s i-360 reserve contributed £840,000 to the upkeep of the seafront – namely, the landscaping works either side of the i-360 itself.

Meanwhile, the council’s plan to open an assessment centre for vulnerable homeless people has been shelved because none of the potential providers could do it with the funding the council offered: £280,000 per annum.

Andy Winter, chief executive of the Brighton Housing Trust, says: “It is a scandal that in one of the richest cities in one of the richest countries in the world we have almost 150 people sleeping on our streets.  The assessment centre is an important part of ensuring that everything is in place to help achieve that ambition. 

“But the council is trying to juggle its finances and commitment with both hands tied behind its back.  Adequate funding for the assessment centre is just not there at present which is one reason why Brighton Housing Trust did not bid for this contract.”

For its part, the council insists:  “We recently conducted a procurement exercise to secure a provider to deliver this new service. The bid we received met our financial requirements, but did not meet our quality requirements. We were therefore unable to award the contract.”

In plain English, the project has fallen into the funding gap: there isn’t enough money to do what it’s supposed to.

Brighton is a city that is a proud of its eccentric way of doing things. Elsewhere, councils have looked to more traditional methods of making money in the private sector.

Mole Valley District Council in Surrey, for example, has snapped up the building that houses a branch of supermarket Asda in Wales for more than £11m. Councillors say the deal for the supermarket in Ystalyfera will generate around £600,000 per year until the tenancy runs out in 20 years’ time. The authority expects to earn approximately £12m in total – a profit of around £500,000.

But the approach is fraught with risk. Surrey Choices is an arms length trading company set up by Surrey County Council to deliver social care services. An audit by Grant Thornton for the period ended 31 March 2016 found the company had made a loss of £4,152,821.

Hazel Watson, leader of the Liberal Democrats on Surrey County Council, says: “Using trading companies is not necessarily the answer to a council's financial difficulties. It is still possible to lose money and not to obtain value for money services for residents. Councils have to remember that public money is involved and that it has to be protected.


“Surrey County Council has spent millions of pounds using a wholly owned property company to purchase commercial properties around the UK. I believe that this is putting millions of public money at risk.”

There is a reason many councils are getting into these risky new ventures. Earlier this year the leader of Newcastle City Council, Nick Forbes, explained the sinister sounding ‘jaws of doom’ scenario for the benefit of Radio 4 listeners.

“If you imagine a graph with two lines on the graph,” he said, “One is plotting resources over time over time – and that is going  down. But the other line is the pressures on local governments and that is going up. Those lines are getting further and further apart. And it is that gap, what is local government terms we call the ‘jaws of doom’, that is filling local authority leaders with dread.”

But councillor Veronica Dunn, Newcastle’s cabinet member for resources, is less apocalyptic. “In these challenging times, the city council is keen to explore other avenues of investment and generating income,” she says. “We are currently reviewing our joint ventures, arms-length vehicles, governance, and our future direction of travel is being particularly reviewed.”

She added that the council is clear about its priorities. “Anything we do to commercially improve our position is done taking those priorities into account... Being entrepreneurial also means identifying the size of the risk and knowing what you should not get involved in or exposed to.”

So what steps are Newcastle councillors taking to mitigate that risk? The press office sent me a statement: “The review is a rolling programme of work, involving a number of people, and will take some time to conclude. Unfortunately we can’t provide specific details at this stage while the review is ongoing.”

Your guess is as good as mine.

Back in Brighton, Andy Winter is clear where the buck stops.

 “The responsibility rests with government which has to make the necessary funds available,” he says. “At the drop of a hat it was able to find £1bn for the DUP to prop up its precarious hold on power.  Can you imagine what difference even half that amount would make in tackling rough sleeping?

“That would provide a legacy that Theresa May could be proud of,” he goes on. “But I guess she has other priorities which history will not judge favourably.”

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Barnet council has decided a name for its new mainline station. Exciting!

Artist's impression of the new Brent Cross. Image: Hammerson.

I’ve ranted before about the horror of naming stations after the lines that they’re served by (screw you, City Thameslink). So, keeping things in perspective as ever, I’ve been quietly dreading the opening of the proposed new station in north London which has been going by the name of Brent Cross Thameslink.

I’ve been cheered, then, by the news that station wouldn’t be called that at all, but will instead go by the much better name Brent Cross West. It’s hardly the cancellation of Brexit, I’ll grant, but in 2017 I’ll take my relief wherever I can find it.

Some background on this. When the Brent Cross shopping centre opened besides the A406 North Circular Road in 1976, it was only the third large shopping mall to arrive in Britain, and the first in London. (The Elephant & Castle one was earlier, but smaller.) Four decades later, though, it’s decidedly titchy compared to newer, shinier malls such as those thrown up by Westfield – so for some years now, its owners, Hammerson, have wanted to extend the place.

That, through the vagaries of the planning process, got folded into a much bigger regeneration scheme, known as Brent Cross Cricklewood (because, basically, it extends that far). A new bigger shopping centre will be connected, via a green bridge over the A406, to another site to the south. There you’ll find a whole new town centre, 200 more shops, four parks, 4m square feet of offices space and 7,500 homes.

This is all obviously tremendously exciting, if you’re into shops and homes and offices and not into depressing, car-based industrial wastelands, which is what the area largely consists of at the moment.

The Brent Cross site. Image: Google.

One element of the new development is the new station, which’ll sit between Hendon and Cricklewood on the Thameslink route. New stations are almost as exciting as new shops/homes/offices, so on balance I'm pro.

What I’ve not been pro is the name. For a long time, the proposed station has been colloquially referred to as Brent Cross Thameslink, which annoys me for two reasons:

1) Route names make rubbish modifiers because what if the route name changes? And:

2) It’s confusing, because it’s nearly a mile from Brent Cross tube station. West Hampstead Thameslink (euch), by contrast, is right next to West Hampstead tube.

Various other names have been proposed for the station. In one newsletter, it was Brent Cross Parkway; on Wikipedia, it’s currently Brent Cross South, apparently through confusion about the name of the new town centre development.

This week, though, Barnet council quietly confirmed it’d be Brent Cross West:

Whilst the marketing and branding of BXS needs to be developed further, all parties agree that the station name should build upon the Brent Cross identity already established. Given the station is located to the west of Brent Cross, it is considered that the station should be named Brent Cross West. Network Rail have confirmed that this name is acceptable for operational purposes. Consequently, the Committee is asked to approve that the new station be named Brent Cross West.

Where the new station will appear on the map, marked by a silly red arrow. Image: TfL.

That will introduce another irritating anomaly to the map, giving the impression that the existing Brent Cross station is somehow more central than the new one, when in fact they’re either side of the development. And so:

Consideration has also been given as to whether to pursue a name change for the tube station from “Brent Cross” to “Brent Cross East”.

Which would sort of make sense, wouldn’t it? But alas:

However owing to the very high cost of changing maps and signage London-wide this is not currently being pursued.

This is probably for the best. Only a handful of tube stations have been renamed since 1950: the last was Shepherd’s Bush Market, which was until 2008 was simply Shepherd's Bush, despite being quite a long way from the Shepherd's Bush station on the Central line. That, to me, suggests that one of the two Bethnal Green stations might be a more plausible candidate for an early rename.


At any rate: it seems unlikely that TfL will be renaming its Brent Cross station to encourage more people to use the new national rail one any time soon. But at least it won’t be Brent Cross Thameslink.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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