Public Services Management: Councils woo private sector: Local authorities are taking on responsibility for attracting private investment to their areas

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The Independent Online
IN THE five years since Coventry city council set up its economic development team, 170 companies have moved to the area, creating about 10,000 new jobs. Myles Mackie, the team's investment and policy officer, said the two facts were not unrelated.

'Our job is to attract investment of all types to the Coventry area. We offer a service to anybody wanting to invest here - information and practical support,' he said.

Mr Mackie and his team are part of a growing number of local authority officers who are working closely with private-sector companies to encourage investment in their areas. Ian Gill, chief executive of Thanet district council, said this trend had been apparent since the mid-Eighties. 'Most authorities now have an economic development function. Local authorities see it as a priority for their communities.'

In Coventry, Mr Mackie and his team have produced a 70-page document listing many details about the city, from the number of employees and their qualifications to weather records for the past 30 years. The council is often the first point of contact for a company moving into the area, and Mr Mackie aims to provide information within 48 hours of the request being made.

Two of Manchester city council's current projects are with Siemens, which has a large research facility to the south, and Scottish & Newcastle, which has expanded a brewery in Moss Side, one of the city's most deprived areas.

'Companies want a way in,' said Colin Fishwick, who heads the private sector team at Manchester city council. 'They want to be able to speak to one person, who can take them through the bureaucratic minefield of government departments. That's what we aim to do.'

But old images die hard. Mr Mackie said: 'Companies are a bit suspicious at first. Local authorities don't have the best public image, even though we have become more market-oriented.' But proving them wrong can be satisfying. 'Because we know the procedure, we can move fast. Quite often companies have asked us to slow down because we're ahead of their legal or planning section.'

One of Mr Mackie's satisfied customers is Surface Technologies, a Coventry company which contacted the council when it wanted to expand. David Pendlebury, the managing director, explained: 'The building we wanted to expand into was on the side of our existing modern facility, but it was about 30 years old. We produced drawings and approached the council for planning permission.'

Even the need for strict controls on the company's effluent did not delay the process. 'The whole thing was dealt with very speedily - in a matter of months,' said Dr Pendlebury. 'The council was very helpful. It provides an extremely good service.'

This all seems a far cry from the tales of tortuous planning applications and endless chasing of nameless officials which frustrated private companies in the Seventies. But some authorities now feel their actions in this area are frustrated by central government.

At Manchester, Colin Fishwick cites as an example the creation of development corporations, which receive funds direct from the Government and are charged with economic regeneration. 'The development corporations have taken away functions previously performed by local authorities. We work with our development corporation, but there's a gradual centralisation of power, combined with a squeezing of finance, which can make it very difficult to work on the ground.'

He said that the process of working closely with a company on a project meant a better understanding of the pressures on both sides. 'They start to understand some of the restrictions on us, and we aim to respond to their objectives and meet their deadlines.'

According to Ian Gill, this is an important aspect of economic development. 'The close working relationship with companies helps to bridge the gap between private and public sectors. And economic development allows local authorities to be seen as proactive.'

Mr Gill was previously involved with assessing training needs for those working in economic development.

A survey of local authorities at the end of the Eighties found that the function was 'something new - it was outside the normal professional experience of local authorities. We were looking for more entrepreneurial people, who were more used to dealing with the private sector.'

This means people working in this area come from widely differing backgrounds. Myles Mackie previously taught economics and statistics at Cambridge; Colin Fishwick is a qualified town and country planner.

Alison Watkinson, a chartered surveyor, leads the economic development team for Ipswich borough council. She described her team's role as 'smoothing the waters' for companies wanting to invest in the area.

'If a development, for example, has problems on the planning side, we would help them to find common ground with the planning committee.' The council's development team includes the chief executive, 'so that a big project can get quick decisions'.

Because the council is a substantial landowner, property transactions and services form a key part of its development strategy. It also aims to secure benefits from new developments for the town, such as street paving for a planned pedestrian area. Current projects include a 270,000 sq ft shopping centre being developed by Legal & General.

But constantly squeezed budgets mean money is tight; for the current financial year, Ms Watkinson has pounds 65,800 to spend on economic development. Although the council is committed to keeping some form of activity going, it has to be 'very selective' about projects to support. Ipswich does not have assisted status, and the council cannot offer financial incentives to companies, although it runs a scheme to lend money at reduced rates to start-up companies. The range of projects gives job satisfaction. 'One day, I might be talking to someone who's unemployed and wants pounds 1,000 to start a new venture; the next day, to someone representing a major investor.'

At Coventry, Myles Mackie and his team have a budget of pounds 140,000, of which pounds 27,000 is European regional development fund money. Although a large part of the team's work is advising companies of available grants, it can also make loans, for example for refurbishment.

This article first appeared in Thursday's Independent.

(Photograph omitted)

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