Interview: Tim Atkins on investing in place
0Cheltenham Borough Council’s managing director for place and growth, Tim Atkins talks to Room151 about how the authority has brought together its strategies for commercial investment and place-making.
Room151: What are the drivers for growth in Cheltenham?
Tim Atkins: Cheltenham is a great town and internationally renowned for its festivals and retail offer which is also home to GCHQ and cyber security. Housing delivery is a hugely important issue for us, as the market continues to struggle to deliver the numbers required along with the necessary balance of affordability. Cheltenham also has an ageing population with more younger people leaving than arriving. There has also been a lot of development pressure for retirement homes in the town centre, at the expense of offices.
2nd Housing & Regeneration Finance Summit
October 31, 2019, County Hall, London
Intervention is required to improve the longer-term economic prospects. Attracting skills and talent is very important, if we are to take a leading role in the delivery of the region’s industrial strategy. Closely aligning growth of the economy and the resilience of the council’s budget is critical.
R151: What is your approach to dealing with these issues?
TA: A major part of our financial strategy is to become more commercially robust with a much broader approach to investment and income generation. Our approach is to tick a number of different boxes – investment growth, income and social value. We wouldn’t just go and invest in an opportunity anywhere in the UK just because it was a good deal. We are investing in Cheltenham, for Cheltenham. I am working very closely with Paul Jones, our section 151 officer (who is also responsible for our property portfolio) to look for investment opportunities that closely fit with our place ambition: ‘A town where everyone thrives.’
R151: What specific
investments have you made?
TA: We have invested £8m of capital to build a new crematorium. That is
operational now and produces both social benefits and a significant yield. We
also recently bought the freehold of a site that houses a large Sainsbury’s
store.
We have bought a number of offices in the centre of town. These are not just sound financial investments offering good yields, they also secure key employment uses that are under development pressure for alternative uses, maintaining a good mix of uses within the town centre, and securing business rates. Four key boxes are ticked: employment, town centre vitality, financial return, business rates income.
Another scheme has seen us use a council-owned car park to create a “box park” to provide space for the creative business sector. The scheme supports pop-up / start-up businesses in a part of town that has the potential to flourish. The idea is to create something that has more of an edgy culture, that opens the door to new types of business and attracts young people. For many this is a high risk approach, as car parking can attract good and secure income streams. However Boxpark’s potential to trigger growth and attract more businesses provides a convincing business case, with something that is not car-based.
R151: Is it all about the town centre?
TA: This is about Cheltenham as whole. At the other end of the scale, we have this week completed the purchase of two sites totalling around 45ha, which is part of a larger strategic allocation (taken out of the green belt) in the 2017 Joint Core Strategy (development plan). In June the site was awarded garden community status for a ‘Cyber Central’ employment zone and around 3000 homes.
The opportunity is too important to be left to market forces. It could see Cheltenham being the home of the UK cyber tech industry as part of a wider sustainable community. This will allow us to take a leadership role in driving forward business and housing growth of a high standard. The site is adjacent to GCHQ, close to two motorway junctions, a mainline station and an airport. It is very well located and is strategically important. We are having to pay a market rate for this, however, the wider benefits could be transformational. It will also enable the regeneration and investment in existing communities close by, some with pockets of considerable deprivation. This will see long term return on the investment, but also see considerable business rates growth, and attract high value jobs and talent to the region, with a wide range of social benefits, including a step change in housing delivery, tenure mix and standards. It is a once in a generation opportunity.
R151: How is the investment programme being funded?
TA: The majority of these investments are funded by borrowing through our general fund. This is part of a long-term budget management strategy.
R151: Are you investing in housing?
TA: Yes. Last year we made a commitment to invest £100m into housing through the general fund that can be used for either private and/or affordable housing. We will struggle to attract a young and talented workforce if we are not able to provide good quality, accessible accommodation that is affordable. Many rentals still offer only six months security of tenure, and most young people can’t get close to owning a house. We intend to work across the whole housing spectrum.
Interestingly, a few days after we agreed the funding, the government announced it was lifting the housing revenue account cap which provides further scope to increase the level of investment in housing delivery.
R151: How important is your relationship with Paul Jones, the council’s section 151 officer?
TA: It is liberating working as part of an executive team that seeks innovative ways to assist in the delivery of an ambitious place agenda. Paul’s role in this has been significant. Our Place Vision and Commercial Strategy were being prepared at a similar time. A shared ideology was growing, that none of this could be achieved through cuts. It became clear that there were clear overlaps between the place and commercial agendas; that would build future resilience and confidence.
The finalising of the business case for the new crematorium was a key moment, when we began to take a more proactive approach to income generation to fund the borrowing for a high quality facility. Confidence began to grow, and it became clear, other benefits could be secured through place-based investments – strong covenant, jobs and business rates, supported by a +5% return (see investments summary slide).
We work very closely together and are constantly testing things out. Our journey would have been much harder without a dynamic section 151 officer who shares the wider place ambitions for the town.
R151: Are you worried by the risks of commercial investment?
TA: Cyber Central Garden Community is a greenfield site and has development constraints. There are a multitude of risks. We do, however, constantly plan for worst case situations. There are a whole host of economic risks, that we have no direct control over, if these did materialise in multiples, we do have contingency options. In such circumstances I doubt very much we would be alone in tackling these challenges. However, this allocated strategically important land should remain a strong investment in the long-term.
R151: Do you have the support of councillors?
TA: Our primary role is to deliver the priorities for the council. This only truly works if members and officers are aligned and work collaboratively. Many of the key investment decisions have received unanimous support from all parties. This is a real sign of progress, building confidence in the delivery of the strategy, making Cheltenham a greater place.
Tim Atkins will be a speaker at the 2nd Housing and Regeneration Finance Summit, organised by Room151 and Social Housing magazine.
Find out more about the Housing and Regeneration Finance Summit and book your place
