Business looks set to continue getting public-sector support at its present levels in County Durham, despite the big financial pressures on the new and more powerful county council.
That’s the position, as rumours of abolition surrounding County Durham Development Company are officially discounted, for now at least.
Bolstering the county’s lagging economy seems to be the new unitary authority’s concern.
These indications come through George Garlick, inaugural chief executive of the new council which is the country’s third or fourth biggest unitary authority and the North East’s biggest council in population (around 500,000) and spend.
Gross expenditure for County Hall’s new body of 125 elected representatives, replacing seven district councils and the old county authority, will be £1.2bn, against £1bn for the previous county assembly. The extra covers functions provided previously by the districts.
Council taxpayers had been told £20.5m a year would be saved in all. George Garlick, who holds an OBE for services to local government, says the authority is on course to save £14m in the first financial year and £20m in 2010-11.
He predicts greater efficiencies and better service through economies of scale, and a general rise in best practice. No compulsory redundancies have been made yet, though 175 fewer employees are expected to be required.
“I think and hope we’ll get quite a number of voluntary early retirements,” he says.
“I’m hoping we can keep compulsory redundancies to a minimum.” Meanwhile, the county’s GVA (gross value added) has to reach a level comparable withthe North East as a whole to help close the wealth gap with the South East. Multinationals Fujitsu and Samsung have come and gone in next to no time, the hardship left by the end of coalmining is still being addressed, and the bottom has fallen out of once staple manufacturing like power tools and white consumer goods. The fade of major inward investments of the 1980s and 90s has been evident across the region, as George points out.
“As, hopefully, we come through recession, we must try to focus in particular on the high quality, innovative high tech and high spec engineering businesses developing here.
“I think groupings of that sort will lead to more of the same coming in. Places like NETPark show how a combination of high tech and university across the county can develop businesses in similar activities.” He may be inspired in this respect by the likes of Thorn, developing new low-energy lighting from a new Spennymoor base that will employ 700 people, and Kromek at NETpark which is pioneering digital colour imaging for x-rays, and 3D imaging that it claims will change the way we see the world.
Even as he spoke, a new 19,000sq ft building was being approved for NETpark science and technology park at Sedgefield to suit a global operation. Also ripe for advance is tourism. He wants visitors to Durham City to extend their stays, taking in places like Bishop Auckland, Weardale and Teesdale.
“They have a lot to offer, as well as places like Seaham,” he says.
“Over 13 years of good times generally, Durham, in GVA terms, has declined against the product of the North East. That is not sustainable. Over the next 10 years we must close the gap between Durham and the North East, and indeed the country. We need to concentrate on small businesses and start-ups.
“In the first year, we are probably looking at business as usual in business support and in support for a number of outside sectors, such as the voluntary sector.
“We had been providing through district councils and CDDC £3.4m in business support. This matches up with £4.5m external funding. Business Link spends about £6m in the county. So the total is around £14m as it stands. We expect that to go forward into the new county, and the first year of the new unitary authority.
“Especially in this climate, a lot of support is required. In financial support, obviously we could all do with being able to put a great deal more in.
“Besides CDDC going forward, we are inheriting a range of business support services, including business units. We have to try to bring all these together so we have a single offer. But certainly there is no plan to discontinue CDDC. We’ll go through with that certainly for the next 12 months.
“Continuity of inward investment support and general support is pretty crucial. That’s the message we are getting from business. People I have spoken to have been supportive of CDDC.” Reclamation and regeneration are integral to all this.
“The regeneration issue at the moment is the collapse in property markets. So much regeneration is property based. Housing sales support, crucial over the last five years, is very difficult at the moment.
“So some projects we hoped would go forward will be slowed I think. However, it gives an opportunity to look closely at potentials across the county, and to focus on areas where you can really get economically added value, real growth points.
“A lot is going forward. Housing growth points south and east in the county are under way, with interest from developers and some housebuilders still. That is encouraging, I think.
The Seaham project continues, a good example of the future for a lot of Durham: cleaning beaches and areas generally, restoring the attraction of areas in the post-industrial climate.
Then get infrastructure and jobs in, and you can really see, as in Seaham now, how great a place County Durham is to live and work.
“People are still interested in moving here and in Durham City, the improvement for visitors and tourists continues through the continuing Durham City Vision.” How would the new council respond to an application expected for a resumption of coalmining in the Seaham area? “We haven’t had extensive discussions on mines. I don’t know the technicalities of the new methods proposed.
Anything that will contribute economically and is sustainable is something we’d look at very closely.” But, he adds cautiously: “There is a big debate on the carbon impact.” The new Durham County (borders unchanged) has at least got off lightly in the banking crisis.
George Garlick says: “One of the district councils had £7m in one of the Icelandic banks. That’s the only effect from that direct route into eight authorities coming together.
“However, the impact of recession on local services is much greater. We’ll have a £10m drop in our investment earnings this year simply through the falling interest rate.” Income from various fees will be down, likewise from amenities.
Services for individuals also become financially strained as people lose their jobs, whether the services are in advice, direct social services, education support, or free school meals.
“It all makes for tens of millions of pounds worth of impact. In income, we have definitely lost £14m for the next year.
We can’t quantify the extra demand on services yet, but it will be significant.”The average increase in council tax across the county is 2.9% - ‘average’ because, as the chief executive points out: “Previously, since all the district councils had different tax settings, there was a differential; between residents in Easington and Derwentside for example.
“In future, everybody will pay the same, but for the present, while the average rise across the county will be 2.9%, it could in some areas go up 4.75%, while elsewhere it could be minus one per cent.” The 2.9% is about in line with the average across the country.
What can people expect? “They no longer have to think about who they have to talk to about services; there’s just one council. Service improvements will start to show towards the end of year one, then onto years two and three, across a range of services, introducing a breadth of vision, economy of scale.
“Hopefully, over five years we can create an offer in Durham in terms of business and the economy that will reverse the slide.
Hopefully, we can be ambitious and innovative on a large scale, making the most of the county’s natural and human assets - a more prosperous county than now.”