Selling the Family Silver

On the 8th June 2016 the sale of 3-5-shornecliffe-rd  (pictured) was completed. Shepway District Council sold the building for £990,000 to Highlife Homes Ltd.

3-5 Shorncliffe Road was the former home of East Kent Housing & The Registry Office; which now sits in the Public Library at Grace Hill Folkestone.

The building was sold at auction on the  03 May 2016 and the guide price was £650,000 – £700,000. The building will now be turned into 16 flats and permission-to-proceed was given by Head of Planning Ben Geering on 6th September 2016.

The money for the sale of this asset can now be used to generate “ongoing savings“.

In March 2016 the Govt produced the following guidance setting out how local authorities such as SDC  can use the money when they dispose of their assets. In report C/16/99  at page Page 7 at Para 3.3.2 the report states:

“Qualifying expenditure is being incurred particularly on the digital delivery of services however this is not currently reflected in the projected outturn for the capital programme.“

The guidance allows for this type of expenditure, as it sets out in its examples, the following:

“Driving a digital approach to the delivery of more efficient public services and how the public interacts with constituent authorities where possible“

So does “ongoing savings” mean job cuts for those in the benefits and revenues dept as we announced in June 2016?  SDC have said they wish to put Housing Benefit claims online and make them digital. This would generate “ongoing savings” as it would mean less staff were needed.

SDC’s asset register is very extensive. They own many desirable assets and this is the family silver. So now SDC can sell the family silver and “decide whether or not a project qualifies for the flexibility”.

As SDC are and will receive less money from Central Govt over the next few years, they must reduce their overheads. Normally the single largest overheads in any organisation are its wages bill, it’s staff, and SDC are no exception. So when SDC say this is for “ongoing costs” it would appear, what they may well mean is that they’ll sell the family silver and use the money to make savings. Whether that means automation eg, online HB forms, sharing back office administrative costs with other councils, what it means is job losses.

Asset sales may well become an integral part of SDC’s  long- term plan and the sale of 3-5 Shorncliffe Road looks very much like the beginning of a very slippery slope.

CEO Alistair Stewart has said SDC “had struggled to engage other authorities in commercial collaboration.” So is this why SDC are now looking at the option of selling the family silver to cut costs and jobs?

These are SDC debts they have currently with the public loans works board.

They have borrowed £40.1 million and will repay £17 million on top of the £40 million. The debts will not be cleared until 2030/31 as the graph below shows.

Is selling the family silver to generate “ongoing savings” the most efficient way of cutting costs and servicing your debts? What when your assets run out, how then do you pay off your debts? We’ll leave you to work that one out.

Shepwayvox