I created the councils first income generation strategy. We invested in warehouses, factories and built large retail units, such as at North Harbour next to Tesco.
I also sold the income Wightlink Ferries pay to Portsmouth City Council for the site in Old Portsmouth. The council owns it and Wightlink are the tenant, paying £2m a year on a 40-year lease. We sold the income stream to a pension fund for just over £83m. The council still own the freehold. Many Pension funds were seeking low risk guaranteed income, after the bond market dropped significantly in 2016/2017. I reduced risk further, to increase the value of the income sale by guaranteeing the income. The yield of the income on the Wighlink site was just over 2% yield per year. Not great, but clearly not a site the council would ever want to sell as it’s a strategically important site for a port city.
With the capital receipt the council received from the sale, (£83m) I invested this money into freehold purchases, such as the Mercedes dealership (building NOT business) next to Southampton Airport. The average yield form this re-geared money is now approx 6.5%, so over double the return on the investment and these new sites are freehold purchases. So it cost us nothing to double our income from the capital. At the end of the 40 year lease, the income from the new Wightlink will be back to Portsmouth City Council, plus we will still own the sites we purchased with the £83m. I did seven things like this, behind the scenes, raising new money to mitigate the reduction in government grant each year, meaning we did not have to cut public services. In fact when I became leader of the council the Lib Dem’s who had run the council for the previous 10 yrs had closed all the public toilets because they could not afford the £117k to lock and unlock them each day and clean them. We reopened them and were able to deliver the service for £7.5k a year. Saving over £100k.
I also removed ‘strategic directors’ from the council, in my first 6 months, saving over £650k a year of taxpayers’ money.
I sold the advertising right to the Spinnaker Tower raising £700k per year and removed blatant inefficiencies across the whole council.
We drove a hard bargain in renegotiating a lease on the Mountbatten centre in 2017. The Lib Dem’s were paying the previous leisure company running the site, £450k a year. We re-let to a new company who we not only paid nothing to run it for us, BUT they are actually paying us £200k in a profit share split - so a positive variance of +£650k for the council each year. It’s about being smarter with the approach and not closing or ending services.
My background is in banking and I sit on the board of a couple of companies, so I used my strong background in business and finance to bring a commercial approach focus to the council for the first time in a generation.
I hope my experience with public funds / commercial background means I will also be able to bring a sensible approach to the management of the police budget in order to free up additional money to pay for more officers.
