Councils seeking 'cash in the attic'
- 22 March 2013
- From the section Business
"It's not the best look for a coastal defence fort to have a gun placement with no gun on it," says Lewes councillor Rob Blackman sweeping an arm across the scruffy hummocks on which Newhaven Fort in Sussex has stood since 1860.
A handsome collection of brick buildings with a fine galleried inner courtyard, it has defended the coast from the Napoleonic wars, through both the 20th Century's world wars.
Visitors should be flocking.
However, Mr Blackman says: "I used to bring my kids here, they loved it - but it is losing us around £100,000 a year.
"To make it work to its full potential it needs between £3m and £5m spending on it. We have neither the time or expertise, let alone the money to invest. That's why we are looking to lease it out to a private company with some imagination. At the very least it will gain us the £100,000."
All across England and Wales, local authorities are battling to meet government targets to cut expenditure by 26% between 2011 and 2015.
Many have either frozen council-tax rates or raised them by 1%.
But while they may be cash-strapped, they are not asset-poor.
'Pubs and bunny parks'
According to a government mapping exercise, these 370 councils have collective assets, such as buildings and land, of £250bn.
PA Consulting, which has been working with some of them, believes they could have twice that amount "sitting in the attic".
"Airports, football clubs, shopping centres, pubs and restaurants - even bunny parks," says Mark Williams, government finance and commercial expert at PA Consulting.
"There's work still to be done to evaluate these, but we are talking big, big numbers. Perhaps £500bn in total, perhaps even more once heritage and infrastructure assets are included."
Councils, like Lewes, are waking up to the forts and bunny parks in their collections and, he says, if used correctly, they have good decision-making tools to assess their value.
Among the more easily spotted are the artworks. Tower Hamlets, in east London, is lucky enough to have some Henry Moore sculptures, which, controversially, it intends to sell.
Extracting value
But even here, the size of the asset pile is not often as clearly visible as a Moore figure.
Leicester Council discovered that when it sold some of its collection. Its leader said at the time: "When we began this process, I had no idea the council owned so many valuable works."
There are limits to sales of this kind - not just public opposition.
Artworks can only be sold in exceptional circumstances and money raised must go towards capital spending, not towards meals on wheels or tending the area's flower-beds.
The New Local Government Network (NLGN), a think tank, has also been working with a number of authorities on ways of extracting value that do not involve sales.
Its senior researcher, Joe Manning, says: "One big area for local government is power generation.
"Woking, a reasonably small borough council, has done fantastic work on this - something that is both financially and environmentally sustainable," he says.
Peter Fleming, who chairs the Local Government Association's improvement board, says councils are increasingly learning new tricks that do not reduce their physical asset base.
"Councils are already smart when it comes to using their assets, with many authorities leasing land and buildings to stimulate growth and generate jobs rather than simply selling off the family silver for a quick return," he says.
"In reality we can't go around cashing in on schools and council houses, we need them for teaching children and to provide affordable housing for local people."
Local pride
Professor Tony Travers, local government expert at the London School of Economics, says many council assets are in any case important for reasons beyond the money that may or may not be realisable: "Civic art galleries are a manifestation of local identity, in the same way as football or cricket teams.
"Indeed, some town halls are also fabulous repositories of civic spirit and architecture - for example, Leeds, Manchester and Birmingham."
Even leasing, rather than selling off the family silver is not without controversy,
Back in Newhaven, town and district councillor Carla Butler, is wary about the plans to lease Newhaven Fort.
"It could go to the wrong type of scheme, a hotel for example, good money to be made but not necessarily a move that would reflect its historical importance.
"And the timing is not terribly helpful. We are coming up to the centenary of World War I and we are missing our chance to make some money from the Fort, let alone the opportunity to mark the occasion with the sensitivity it deserves."
Newhaven's past proves it has been an asset with problems from way back.
The fort was built over a site that protected England's coastline for many centuries, but has rarely been tested.
When the Spanish Armada sailed close to it in 1588, it did not come in close enough range to test its firepower.
Just as well.
A report from the time noted: "The guns at Newhaven were unmounted and of little worth."
An assessment Rob Blackman of Lewes council will be hoping has improved over the years.
