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On the hunt for funds

Infrastructure costs Kent county council leader Sir Bruce-Lockhart tells Noella Pio Kivlehan about how he intends to raise revenue

Sir Sandy Bruce- Lockhart

1997 Elected leader of Kent county council, re- elected June 2001

1993 Became leader of the county council Conservative group

1989 Elected to Kent county council

Bruce Lockhart is chairman of the Local Government Association; chairman of the Kent Thameside Delivery Board, the umbrella organisation overseeing development in the area; a trustee of the Centre for Social Justice; and a school governor.

Regenerating an entire county is an expensive business. In Kent’s case, getting the county up to the standards of its wealthy neighbours, Surrey and Hampshire, will cost at least £9.6bn over the next 20 years. And it is Sir Sandy Bruce-Lockhart’s job as leader of Kent county council to help find the money to do it.

The government has promised some funds. However, this still falls short of what is needed to complete not only regeneration, but the government’s housing and residential requirements. For the past 18 months, Bruce-Lockhart has been waging a battle with deputy prime minister John Prescott and chancellor Gordon Brown for more capital. Meanwhile, Bruce-Lockhart is looking at other ways of getting cash it needs.

Private-sector resources

Sitting in his county council office in Maidstone – a collision between late 18th century architecture and early 1980s décor – Bruce-Lockhart says one solution is to tap into private-sector resources. However, this immediately poses a problem for the KCC leader. Bruce-Lockhart says developers already have their hands full coping with government legislation. “Developers are, mostly, playing their part. But they have problems finding the money because government says that 30% of what’s built has to be affordable.”

Nonetheless, he does believe developers such as Land Securities, which is developing 1,020 acres at Ebbsfleet (see p94), should consider funding parts of its infrastructure. Referring to Fast Track — the bus-based transit system that will eventually link Dartford, Gravesend, and the Channel Tunnel Rail link at Ebbsfleet – Bruce-Lockhart says: “We would love the developers to take Fast Track. We have put £15m into the scheme. It’s going to cost £70m, and we don’t want to put any more money into it.”

But he is worried about “what developers themselves can contribute without destroying their own commercial viability”, and is championing another way to raise revenue – a business rate charged on occupiers of schemes around Ebbsfleet International Station.

“If we take the business rate from the revenue of these new commercial developments, it could add up to £26m,” he says. “Instead of sending that money to the Treasury, we would keep it locally. That means we could then borrow £500m to help with redevelopment.”

The proposal has already been put to Brown, but the Treasury is still considering alternative cash-raising measures.

It is Prescott and his vision of 720,000 homes being built in Kent by 2026 which has been causing Bruce-Lockhart most of his financial problems.

Prescott announced last year that Kent had two of the four designated major residential development sites in the South East. The deputy prime minister was following recommendations laid out in Kate Barker’s Review of housing supply report, published last March.

But, as Bruce-Lockhart states on the official KCC website: “The Barker report recommended that £150m be put aside nationally for community infrastructure for the whole of England. This is a drop in the ocean. KCC is already spending £240m a year on its capital programme on schools and roads.” Indeed, KCC says a massive £9.6bn is needed, and Bruce-Lockhart says the government “needs to put its money where its mouth is”.

The financial cost meant Bruce-Lockhart and KCC were not happy with Prescott’s figures. So last December the county voted that only a maximum of 640,000 houses would be built in that time period. At the time, Bruce-Lockhart, who is also head of the Local Government Association, said he was “delighted to have seen off the government’s ill-conceived ambition”.

Given that Kent has a good supply of brownfield land earmarked for housing over the next nine years, it is tempting to ask why the council is so reluctant to comply with Prescott’s aims. More housing and investment could also help improve Kent’s ailing GDP growth, which stands at 1% compared with affluent Surrey’s 4-5%.

Bruce-Lockhart says the county council wants to protect the county and ensure there is the proper infrastructure in place to sustain growth. “It’s an oversimplification to say we don’t want to build homes. We want to build homes in the right place, where they are wanted,” he says.

Bruce-Lockhart adds that there are certain rules that should be considered before any development happens. In response to the Barker report, the KCC issued its own recommendations in What price is government?

In it, the council set four tests (see panel) for the government to meet to ensure quality of life and that “the county is protected and enhanced”.

Real sticking point

It is the last test – the problem of who pays for infrastructure – that has proved to be the real sticking point. In fairness to New Labour, Bruce-Lockhart says central government recognises that there is a need for more central government investment. But there has yet to be any settlement. And this slowness resulted in a call for more private money.

However, with developments such as Ebbsfleet International finally nearing completion, Kent will soon be able to grab a larger slice of the economic growth enjoyed by its affluent neighbours.

Kent county council’s four tests

Rules that must be met before developments take place

● Environmental heritage must be protected and enhanced

● Development must be of the highest quality

● New jobs go hand-in-hand with new houses

● The necessary investment for infrastructure must be secured

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