WS1. Case study
Linking your commercial strategy
to your medium-term financial
strategy
John Rice Director of Commercial Services
Summary
• Our Story
• Commercial approach – Investing for the
future
• Commercial property acquisitions
• Commercial Services & SPVs
• Regeneration schemes
RUNNYMEDE:OUR STORY
• Historically low Council Tax
• Sharply declining Revenue
Support Grant £5.6m to nil
• 2013 - No preparation for
austerity:
– Service reviews
– Zero based budgeting
– Voluntary redundancies
2013-18
RUNNYMEDE: OUR STORY
THE OPPORTUNITIES
• 2012: Council debt free
• Vibrant economy (13th of 324
authorities in England)
• Borough ripe for regeneration
• Political support if no cuts in
services
• Plenty of investment
opportunities
Investing for the future• Strategy: Adaptive Innovative Council
– Redefining our role - A bold commercial strategy
to be more self-sufficient
– Debt free to approved borrowing of £600M
– MTFS – generate £24M gross / £10M net income
– Changed from being a disposer of land to a
commercial development funder and developer -
using capital to generate revenue
– Place shaping regeneration schemes
– Demonstrating our confidence by investing in the
local economy
Strategic framework
• Capital Strategy 2019
• 2019/20 Treasury Management Strategy
• Property Investment Strategy 2016/17 – 2021/22
• Annual Investment Strategy
• Prudential and Treasury Management Indicators
• Minimum Revenue Provision (MRP)
Regeneration of the Towns
• Why?
– Continued economic viability of the towns
(economies cannot stand still – Amazon / F&B
changes / etc)
– Providing new housing (Local Plan targets)
– Place shaping
– Commercially viable development
– Creation of local jobs
Regeneration - Where?• Addlestone ONE - 213 residential units + 13,201 sq m
commercial including The Light 6 screen Cinema, Waitrose
store and 101 Bedroom Premier Inn
• Egham Orbit – 25M pool, sports hall, spa, gym, etc
• Ashdene House – 26 unit residential development
• Marshall Place – 10 house residential development
• Egham Gateway West – approx. 100 residential
units, 100 student units and 9,000 sq m commercial
including a 4 screen cinema
• Parkside (HRA) – 60 unit affordable residential
How funded
• £200M Funding for regeneration in the MTFS
• Development cash-flow funded by income
from commercial property
• RBC agree a payment profile for the
development (not a coupon)
• All regeneration schemes are commercial
and so income generating or in the case of
residential sales / lettings (PRS), achieve full
market value
Commercial Services
• RBC Commercial Services
• SPVs:
– RBC Investments (Surrey) Ltd
• Estate Agency Team to optimise income and
capital values
– RBC Services (Addlestone ONE) Ltd
• Service charge team – commercial properties
– RBC Heat Company
RUNNYMEDE: OUR STORY
Lessons learned
• Get a good team in place
• Analyse investments carefully
• Be sure you have a plan to pay back what you borrow
• Embed a project management approach
• Don’t expect too much too quickly in a changing world: contingencies
• Assure members and keep them on side
In conclusion• Runnymede BC is a small well managed local
authority that is financially sustainable as a
result of commercial activities
• In bottom 10 LAs for cost of Council Tax
• Lost Government Revenue Support Grant fully
replaced by income
• Strategy for current and future sustainability
• Strong Property Investment Strategy
• Commercial income funding a £200M
regeneration programme
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