Newark & Sherwood CEO on funding and revenue streams

Andrew Muter has been chief executive of Newark and Sherwood District Council since 2006. He was previously assistant chief executive of Nottinghamshire County Council and director of the Nottinghamshire Improvement Plan.

Room 151: You are offering a service to help other councils launch their Community Infrastructure Levies. How did that come about and what sort of income are you seeing from it?

Andrew Muter: We were first in the country to launch the CIL and one of the government’s Community Infrastructure Levy pathfinders. Having gone through all of that experience one of the issues was how do we transfer this knowledge to other people? Not everybody has to learn how to be experts at CIL in their own organisations, we’ve developed the expertise, why don’t we sell it on? We’re very fortunate to have recruited Adrian Kerrison into our service, he has broad developer experience sitting on the other side of the fence so is very knowledgeable of the CIL process, he is an asset to us and his suggestion was ‘I can sell this to other people’ and we said, yes, lets do it.

It’s early days in terms of overall likely income. We have about four councils pushing ahead with us and we don’t actually make a huge amount out of it. We’re doing it in partnership with the chartered surveyors we worked with on our CIL. We do the quality assurance bit – what you need in terms of an authority is to get the assurance that you are doing everything right. I think other councils like the idea that the assurance side isn’t coming from a contractor who is going to tell you it’s all wonderful and then walk away.

Overall 15-20% of the cost is an income to us but is a useful income stream because it will probably offset a substantial part of us running our own CIL and having robust experience in the organisation. We have Adrian and another person who have expertise in CIL and I’m not sure we could continue to have two internal people in the long term having got our CIL in place but because we now have an income stream that helps to retain the resource in the council.

Room 151: Do you need to keep the resource now that the CIL is set up?

AM: Yes we do partly because it is one of those never finished jobs. You have to review it, manage it, advise those people in your area asking what it is. You have to offer strategic advice within the council about the way the development world is working and the impact on likely projected income streams. The whole income from CIL is projected on the basis of likely development over the next two years and it may not materialise in the way we’ve been assuming, therefore we need to monitor it. It’s also true to say that both our officers do other things as well as CIL. In other circumstances we’d be a council that would be reliant on one person, which is always worrying.

Room 151: What sort of funding do you have for Newark Growth Point?

AM: The previous government channeled a fair slug of money to local authorities who were Growth Points. They channeled some HMRC money in to help underpin the development of our Growth Point which we have spent on employing people and buying studies and all of the things that got our Local Development Framework to a point where we could define the strategic sites for this housing.

The government also gave us a couple of tranches of capital, which we are just about to spend. We have just under £5m which is going as a fiscal stimulus to the local economy that will be delivering support into the land south of Newark where we have granted a planning application to get that moving. We’re looking at ways of using our capital to move forward the development of a link road, we’ll be looking at whether there is any critical infrastructure that needs to be forward funded.

Room 151: What other funding are you able to access?

AM: In terms of the current government plans there is no other stream of Growth Point funding that I am aware of at the moment but they have made other funds available through the Local Enterprise Partnerships (LEP). There is the Growing Places fund and the Regional Enterprise fund which we don’t seem to have much of a sniff at but we are trying hard through our partners in the LEP team.

The government would say that we are getting New Homes Bonus money which is starting to flow through now so that is a useful chunk of money which is starting to underpin some of our investment in the local economy. And of course there are the proposals around business rates. Growth in business rates will yield extra income from the council going forward – we have yet to understand precisely how that system is going to operate.

The government’s response, I guess, is going to be as you grow you will get increasing income streams as a council because you are growing and they will be reflected in the New Homes Bonus and in your business rate growth and with that you will be able to deploy more money on other infrastructure costs that you need to meet over the next fifteen years or so.

Room 151: Is it difficult work?

AM: It’s very exciting in many ways, there is a sense that there has always been a mismatch between the resources a council has locally when you grow because growth has tended to happen with yes, you get your Section 106 payments for certain things but the reality is that the coordinated approach of making sure infrastructure grows in tandem with growth has never been there. Now we have the instruments to do that with a combination of New Homes Bonus, CIL, business rate growth and the other programmes, you can argue that there is a fighting chance that you can schedule when to build a new primary school, anticipating growth and have it built at a time when it is needed, not ten years later which has tended to be the pattern in the past.

Room 151: Authorities are also looking at things like Community Asset Transfer, shared services and other ways of revenue generation, do you have any other particular projects?

AM: All of the above I guess. These are important things for a district around growth and will be major income streams but we are also looking at our traditional income streams. For example we have a very healthy car parking income stream. Newark is a growing town and one would assume that more car parking will be needed so we are looking at where will the next spaces be needed and should we be part of that as a council. Looking to underpin our future income streams by extending out. We’ve just done a town centre development with Asda where they bought out and closed down a Netto store fairly close to the town centre. We’ve just entered into an agreement with them where we’re running the car park that used to be with the Netto store as a pay and display. We’ll share that income stream with Asda while they decide what to do with that site in the long term.

We’re being pragmatic and opportunist, we currently also have two temporary car parking arrangements where we income share with the owners as we manage. It’s the same sort of thing with our leisure income. We’re building a new leisure centre and the leisure income is very dependent on people who sign up on a membership basis like private gyms, we keep that topped up and look at how we market to people we know are coming into our community as we build new homes that there is a service here they can buy into.

Room 151: What are your future key financial challenges?

AM: The year ahead isn’t really a problem. That will be carried along by the momentum of what we have been doing – we’ve got ourselves to the right position. The big worries are the year after and the year after that with the prospect of further cuts in government grant and uncertainties over the changing local government finance arrangement. We are looking at a range of things such as shared services that we already have in place and are working on. The big financial challenge will be to make sure we continue to squeeze whatever efficiencies out that we can in order to maintain broadly the range of service delivery that we have at the moment.

Beyond 2013, 2014 is the great unknown. All of these things on income stream and making sure we’re supporting the local economy and keeping things ticking over are really important because they will help get us through.