Observer column: 09 October 2015
With continuing cuts to council funding, and increasing demands on services, councils are having to think of new ways to make ends meet. In Hastings, there's a £1.5m hole in the budget that we're going to have to fill somehow - some of it can be done by 'increased efficiency' (which usually still means job cuts), but the only other way to reduce spending is to reduce or discontinue the services we don't have to provide by law.
However, there is another possible route: if the government is cutting our income, then we have to find other ways to generate it. Many councils are looking at this, and wondering how they could become more 'entrepreneurial'. In Hastings, we already have a pretty good record of entrepreneurial activity. Forty years ago, the council built factory estates, which now bring in rental income of well over a million pounds a year. The council owns a pub, and some shops, all of which bring in good rents. So we're looking at other commercial property we could invest in. But we need to do more.
Like other councils, we're wondering why we should give major contracts to private contractors, allowing them to make profits, when we could run them just as efficiently ourselves, and keep the profits. When services are brought 'in house' like this, there may be more opportunities for marketing, too. Next year, the council's building and toilet cleaning contract comes up for renewal, so we'll look at whether we can bring it in house, and what opportunities there would be for marketing a cleaning service to others. We're also looking at the possibility of running new kiosks on the seafront directly, and develop a council catering service. So as our contracts with private companies expire, we'll consider all of them to see if there's money to be saved, along with new marketing opportunities, by bringing them back in house. Other councils have shown that there often is.
Perhaps even more ambitiously, we're thinking about the council becoming a housing developer, building houses directly on sites we own, rather than selling these sites. This would also mean we could provide much-needed fair rented housing in these developments.
We have to think, though, about how income generated in this way should best be spent. There is more we could, and should, do to help the most deprived communities in Hastings. The new Index of Multiple Deprivation seems to show that, while Hastings is becoming less deprived, the poorest areas have yet to feel the benefits. We need to do more analysis on these data to find out exactly what they show, but it's important that income generated through entrepreneurial activities is used to address this. So rather than going to private profit, it will be used for the public good, and to help tackle deprivation - the 'entrepreneurial socialism' I mentioned in a previous column.
These initiatives will take time to develop - they're not a quick fix, and don't solve the immediate problems the council has with its budget gap. And they probably won't make up for all the government cuts to our budget. But we have to think creatively, and come up with solutions that the public sector has, in the past, shied away from. We cannot let local people down through a simple lack of imagination.