York Council unsure about way ahead. Call for moratorium on new expenditure

Post coronavirus strategy confirms major financial issues.

The Council has published a review of its response to the Coronavirus crisis. It will be discussed at a “virtual” Executive meeting next week.

The review mostly looks backwards and therefore contains little that is new.

The report does, however, say, “Further work is needed to accurately assess the impact, then to identify and plan the city’s response. It should be noted that, based on the financial information in this report, and the expected increase in demand for services as we start to move out of lockdown, this work will involve reprioritising council budgets, focussing resource on where there are greatest challenges and providing a new strategic plan for the council to work to over the coming months. It is quite possible that there will be some previous priorities that can’t be delivered in the same way in the light of our new operating context.

A Recovery Plan is being developed (aligning with regional recovery activity through the LRF) which will outline the risks and challenges of the emerging situation, with actions in response and opportunities based on lessons learned during the emergency response. Clearly, this plan will take into consideration and align with Government advice and national plans for recovery. It will be used to inform a review of the existing Council Plan in order to produce an Operational Recovery Plan to guide the council over the next 6 – 9 months”.

That is the right approach.

There needs to be an immediate moratorium on taking on new expenditure. An “approvals committee” should be set up which can publicly test any new expenditure proposals.

York Council budget position 30th April 2020

The Councils initial assessment of its financial position may produce accusations that it is very much a “worst case” scenario. The government has today confirmed that in total it will grant £10.5 million to help the Council offset its estimated £35 million exposure. Much of the defict assumes a high level of non payment of Council Tax and business rent.

There is a stark warning of cash flow problems later in the year “the Council would have to concentrate on providing statutory services only”. That would be bad news for services like leisure, with some facilities likely to close.

On its capital programme the Council promises a project by project review. “this will include considering the overall purpose of the scheme and whether they are still financially viable given the risk to the overall economy. This is particularly crucial for those schemes that assumed the generation of capital receipts to fund expenditure”.

The report is silent on the consequences of some schemes that area now past the point of no return.

Recent increases in the Council’s commercial portfolio are not analysed but there are fears of a forced “fire sale”.

Empty offices at the community stadium site (underwritten by the Council) could remain empty for years, while the pipeline sales of empty former social care buildings could also fall through. Options for cutting back on the £20 million Guildhall refurbishment project will need to be considered.

The Community Stadium itself, although outsourced, is dependent on other activities on the site to cover its running costs.

It seems certain that there will be delays on the York Central regeneration project while the £14 million new multi storey car park on St Georges Field will no doubt be shelved together with the rest of the Castle Gateway project.

Other cherished capital investment projects, which involved increased debt, and therefore increase the day to day running costs of the Council, will have to go “on hold”.

No new contracts should be let unless they direct address the adverse consequences of the health crisis.

Much more on this and the implications for other public services in the City will become apparent over the next few weeks.

York Council aims to boost small business economy

With hardly a day going by without another retailer or café announcing the closure of premises in York City centre, the council will review its regeneration plans next week.

Last year £300,000 was allocated to promote what was styled as an “Inclusive Growth Initiatives Fund”. It was aimed at making sure that everyone could benefit from a strong local economy.

An update report published yesterday says that the York economy is performing strongly. There are now more people in work than ever before, and average wages are higher than the rest of the region. 14,000 work in high skilled jobs.

Details can be found by clicking here

Eight initiatives were identified for investment and financial allocations are now being proposed

Establishing a York Poverty Commission: (similar to one operating in Leeds). £20k
Community hubs as drivers of economic growth (There are a hubs operating in Foxwood and Chapelfields): £40k
Greening our retail estate: £70k
Community jobs fairs: £30k
14+ vocational training and work: £50k
Independent retail growth fund (using the success of the Bishy Road Traders campaign as a model): £40k
Mental health, wellbeing and employment: £25k
York Economic Strategy consultation: £25k

The Council report concludes, “Inclusive growth cannot have neighbourhoods that are left behind, opportunities that are only selectively available, or a two-tier economy where some people are doing well at the expense of others who are not”.

That may be good news for the poorer parts of York who feel that the quality of public services available locally has deteriorated in recent years.

This is not least a result of the York Council being stubbornly insensitive to the effect that closing leisure and sports facilities is having on vulnerable communities.

York Industrial Strategy

A report being considered today says that “York’s compact size, competing demand for site/land uses and the historic nature of the city’s traditional core means that green- and brownfield opportunities for commercial development are limited.

Nevertheless, major regeneration opportunities such as York Central and The Guildhall, as well as the Hudson Quarter development, offer sizeable growth opportunities for York’s economy”.

The comment is in response to what the government describes as “local industrial strategy”.

The report goes on to identify the strengths of he York economy

York’s economy is diverse and rapidly growing with the city witnessing the fastest productivity growth of any area in the region since 2012. The York Council has identified five key growth sectors based on existing strengths and assets. These are:

Rail engineering and technology;
Digital and ICT;
Financial and professional services;
University-led innovation and training; and,
Bio-tech (particularly at start-up phase).

“it is important that these sector strengths are supported to prosper, as well as the city’s lower-paid, high volume industries (retail, hospitality, tourism and health and social care)”

The York and North Yorkshire strategy is summarised as inclusive growth, the use of digital technology to transform York and North Yorkshire into a ‘Smart region’.

The Leeds City Region – which includes York – priorities are:

Supporting businesses to meet the challenges of the future economy and create good quality jobs, to support progression and promote inclusivity;

Accelerating economic growth across the City Region through technology and innovation;
Building on the successes of our globally important healthcare sector as a source of good jobs and growth;
Making sure our environment promotes healthy, active lifestyles and is fit for future generations to enjoy; and,
Skilled people, in good jobs, with access to training to help build and sustain their careers

The “strategy” is due to be discussed at a meeting being held in York later today

National data shows York workers’ wages up 13% in the last year

**Figures out today (29 October) report a 13% increase in average weekly earnings for York workers* over the last year, according to government data.**

The national government Annual Survey of Hours and Earnings (ASHE) – the most accurate way of estimating pay – showed that the average weekly earnings for York residents also rose from £512.60 in 2018 to £574. 60; an increase of 12%.

The wage increase in York compares favourably to other areas across the UK, with pay across the country increasing by 2.8%; a 1.9% increase for Leeds residents and an increase of 3.5% across the Leeds City Region.

The figures correct the impression of a significant dip last year.

We pointed out in March that this figure was probably wrong and so it has proved to be.

Cllr Andrew Waller, Executive Member for Economy and Strategic Planning, City of York Council, said:

“These figures are welcome news for the city, though like any statistics they only show part of the picture. Looking at the data over the last five years shows, since 2015, a 16 % increase in the wages of both residents and people working in York.

This is good news for everyone in the city and shows the inherent strength of York’s economy”.

*York workers are people working in the city, not necessarily those who live in the city (York residents)

Bad news for City centre traders

Grim in Acomb

The latest footfall figures, reproduced by the BID team, reveal that there has been a 4% drop in visitor numbers so far this year. It is even worse on a year on year basis and is below the county average

That is a poor platform on which to approach the, normally busy, run up to Christmas.

In Acomb, the picture is slightly different with some traders reporting steady business trends. This is despite the lamentable performance recently of the Council in keeping open spaces, gutters and the areas around trees and street furniture free of weeds and litter.

Weeds still choke trees and seats on Front Street

The picture in residential areas is also disappointing with weeds disfiguring many streets

City centre economy facing a challenge

City centre traders are likely to be looking with concern at the numbers of people who are visiting the City centre. New footfall figures have been published.

The figures suggest that visitor numbers to the City may have plateaued.

Long periods of hot weather haven’t, in the past, been good for York with some tourists preferring to visit coastal areas.

This years weather has been mixed.

Special attractions like the Rose Theatre, although generally successful, are not sold out while interest in events like the current “Great Yorkshire Fringe” are at best comparable with last year.

During June several York streets saw a 10% drop in visitor numbers in 2019 compared to the same month in 2018.

Early figures for July in Parliament Street suggest a 4% drop in visitor numbers during July.

Perhaps not surprisingly, given the number of empty shops on Coney Street, that area has seen visitor numbers drop from 812,808 in June 2017 to 713,762 in June of this year.

There is no shortage of excellent “Festivals“ in York while the work of the BID has seen several parts of the city centre tidied up.

The most important time for many City centre traders is the period between now and Christmas.

Lets hope that the City continues to be “best day out” in the region

Gradual decline in visitor numbers to Parliament Street.

Smaller shopping streets are doing better with visitor numbers to Stonegate stable and numbers in Micklegate increasing.

Council election manifestos compared

2. Crime, economy and education

All parties are keen to drive up wage levels. None can say how a local authority might achieve this worthy aim. Labour make the bogus claim that wage rates are falling in the City (they aren’t, although overtime earnings reduced last year).

Some see the way ahead being for the Council to give a monopoly to local suppliers for goods and services. What the knock-on effect on Council Tax levels would be is anyone’s guess.

Labour want to slow the York Central project taking it out of the hands of “developers”. Quite where they would get the investment for a pure public sector approach is also anyone’s guess.

There are clear choices on a Tourism Tax. Such a Tax could not be introduced unilaterally. It would either require central government facilitation or a voluntary agreement (chickens/Christmas anyone?).

The Council has little influence these days on local schools, which are funded directly by central government and have their own independent governing arrangements. Similarly, the Council has little direct influence on policing activities. It could however be stricter with its licensing rules.

York Council election manifesto promises

Decision on “Make it York” future

The Council must decide whether to renew a three year contract with Make it York (MIY) at a meeting taking place later this week.

The organisation is a curious hybrid with responsibility for a disparate range of functions including business development, tourism, culture and the Shambles market.

For residents, its City centre activities are likely to have the highest profile. Many initiatives there, including the Christmas lights and anti-litter patrols, are the brainchild of the, trade funded, “York BID”

MIY has been criticised for its opaque decision-making processes. As a “wholly owned Council company” it should be subject to regular review by a “stakeholder” committee and at least two of the Council’s scrutiny committees (which are themselves famously obtuse).

In realty the “stakeholder committee” rarely meets, while the Council’s two representatives on the MIY board have a largely subterranean profile.

Success has been limited, with a confusing array of bodies (LEP North Yorkshire, LEP City Region, York BID etc.) rubbing shoulders in the same field.

Coney Street decline

MIY can take some credit in helping to sustain the number of tourists coming to the City. This is an important part of the economy and visitor numbers have increased, partly on the back of a weak pound.

Employment levels in the City also remain high

The biggest criticism of the Council’s approach is a lack of smart PIs on which to judge the organisations success.

Very noticeably, there are no customer satisfaction measures in the current set, other than those for participating businesses.

MIY receives an annual £300,000 subsidy from taxpayers.

Some encouraging comparisons for York in new City study

York now has the highest employment rate of any City in the north of England or Scotland. It also has one of the lowest claimant (benefit) rates.

York has a relatively small proportion of jobs in employment sectors which are expected to shrink in size over the next few years.

These include sales assistants and retail cashiers,other administrative occupations, customer service occupations, administrative occupations: finance and elementary storage occupations. A century ago the most vulnerable occupations were forecast (correctly) to be domestic indoor servants.

Th news is contained in a new report published by the “Centre for Cities”.

The report can be read by clicking here.

York tends to be average to better than average on most tests applied by the study.

It fares well on the number of residents with high level qualifications having 42.7% compared to the UK average of 38.0%

Perhaps more surprisingly York does’t yet feature in the top 10 of City’s with ultra fast broadband access while housing remains more affordable than in many southern cities.

York economy performing well but….

St Nicholas market popular this year

The start of “Business Week” in the City coincides with the publication of a progress report by “Make it York” (MIY). This is the QUANGO charged with developing the York economy and particularly the visitor sector and markets.

Reading the report, one might think that all was rosy in the garden.

There has been a steady stream of tourists visiting the City this year. They have partly been attracted by a series of festivals while other initiatives like the food court on the market have attracted favourable publicity.

The complementary York BID scheme has produced tangible improvements to the streetscape coupled with imaginative lighting schemes.

However, part of the success in attracting foreign visitors is down to the low value of the pound.

The MIY report is singularly short of figures.

One look around the City centre, at this the busiest shopping period of the year, reveals that key shop units are still empty several years after they become vacant. The pile of empty shipping containers on Parliament Street doesn’t help while the surface of the City’s most popular car park (Castle) is in an appalling condition. Advanced car parking space availability signs – and their “on line” counterparts – haven’t worked for over 4 years.

This all adds to a depressed feel in the “high street”.

The report – to be considered by a Council scrutiny committee on 28^th November – considers progress against a limited number of targets. Some issues, like the shortage of labour and key skills, aren’t mentioned.

Nor is any attempt made to assess the impact that BREXIT will have on the City economy over the next five years or more.

We hope that Councillors, faced with a bland report, will ask questions which root out any complacency.