Income Generation 2016 – Commercial

Approach To Property Management Nick Tustian, Chief Executive, Eastleigh Borough Council

Eastleigh Borough Council

South Hampshire – 31 Sq Miles Population -125,000 Southampton Airport ,

Hampshire Cricket & Howards Way

Medium sized District Council 500 employees Revenue spend £60M per year Capital spend - £20M per year

Background

• Need to Change:

– Financial

– Working in a new (broken) public sector

• Ambition:

– Protect Front -Line Services

– Deliver Major Projects

– Regeneration of Local Centres

– Housing – 15000 over next 20 yrs

– Become Revenue Support Grant Free

– Below Inflation Increase in Council Tax (13 yrs)

What Are We Doing

• Transform the way we deliver services

• Become more Commercial (whatever that

means)

• Ensure we have staff with the right skills

• Understand what is important to our

residents

• Generate efficiency savings

Being More Commercial

Build on the Successes of our Property

Strategy (2008)

• Pro-actively acquired property assets

• Prudential Borrowing

• Due Diligence – Covenant, Cash Flows etc

• Investment return – 7%

• Implemented decision making process

• Restructure of Estates Team

Financial Impact

2007/08

£M

2016/17

£M

Asset Value 55 220

Rental Income 1.7 7.00

Borrowing 6.2 120

Net Surplus

(After all Costs)

1.2 5.0

Barriers

• Legal

• Bureaucracy – decision making process

• Political

• Skills - Workforce

• Changing market – being one step ahead

• Appetite for risk

Where Are We Going?

• Housing

– Commercial Housing Company

– Working with Developers, Land Owners etc

• Understand what commercialism really

means – not just about the money

• Need to change the way we think about

services

WE STILL HAVE A LONG WAY TO GO