Elleston is open for business and here’s what you need to know
South Somerset has set up a new landscaping and horticultural trading company called Elleston which aims to provide a better service for residents, while returning profits to the Council.
Elleston has been created by SSDC in response to requests from residents as well as housing developers as there is a demand for high quality maintenance work on private developments and estate land. In addition to land management Elleston offers a wide range of landscaping and horticulture services, including sports field management, arborist work, fencing and street cleansing.
The Council’s Portfolio Holder Cllr John Clark said: “When new estates are built, developers have a choice of seeking adoption of the common public areas by the council or retaining ownership and utilising a private maintenance company. With many developers now choosing to take the private maintenance company route and charging residents for the costs, Elleston will utilise our skilled workforce and good practice to ensure that an excellent level of work is carried out.
“The council cannot use public money to maintain private land, therefore Elleston is simply meeting the market need. Due to laws around trading the council is required to set up a separate company to carry out this kind of work and by setting up Elleston it is hoped that developers and residents will receive a better quality service than otherwise might be available.”
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SSDC already holds a high reputation for its landscaping and horticultural work and wins a number of awards for its standards across the district. Elleston will not only aim to raise the standards of these privately owned areas but any funds generated above the costs of providing the service will be used to support and protect the provision of other services to residents of the district.
More about Elleston
Elleston was created as part of our Commercial Strategy which seeks to generate additional and new income of at least £2.2m a year by 2021 to help continue the provision of vital services to residents.
Councils are prohibited from trading their services and making profits directly, but government legislation allows them to do so through a separate trading company.
These companies compete in the open market along with other commercial providers of such services and will need to tender for the works to private landowners. The company can make profits that are returned to the Council as dividends, which can be used as additional revenue to improve and maintain services which benefit the whole community and mitigate the loss of funding from central government.
As a trading company, which is distinctly managed and accounted for separately to the council service provision for public areas, the company must align itself with the market in which it operates. If it prices itself above the market for services, it will not win any business as it will be too expensive. As a council owned company, if it underprices its services, this would be the same as using public money to pay for (or benefit) privately owned land or companies which is not allowed.
Why isn’t the council adopting more amenities (i.e. creating more public land)?
The planning system requires sustainable, appropriate amenities to be provided as part of new development but the Government does not require these amenities be publicly owned.
Previous smaller sites taken on by the council in the past have only been viable as developers offered to secure the maintenance costs for a fixed term through what are known as Section 106 agreements but there is no legal obligation to do this and this is becoming increasingly rare. Similarly, county highways is not adopting roads unless they have to, so many roads now remain private on new estates.
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Elleston has been set up by SSDC only for private developments and estate land, not publicly owned land/roads that the council already maintains.
SSDC receives calls from residents when they are not happy with the private estate management companies referred to and they ask the council to step in. In developing Elleston, SSDC is simply responding to our business’ and residents’ needs where we can.
Why the need for this commercial approach?
The Council is currently operating in a complex financial climate where it needs to deliver savings rising to £6 million per year until 2022. This is in addition to having to cut its costs substantially since 2010.
SSDC has sustained a 70 per cent reduction in its Government grant funding since 2010 and further reductions are likely in the future whilst demand for and costs of many services continues to rise. It became clear that SSDC needed to make the most out of its assets and look for new opportunities which could generate income to protect the wide range of services our communities receive and create opportunities to fund new projects.
This is about making prudent financial decisions which will create significant income to get the best results for South Somerset but still, where possible, supporting the local economy.
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In the future, we will have countered the loss of grant funding from Central Government through the Commercial strategy and we will continue to deliver vital services, parks and open spaces as well as exploring new opportunities to make South Somerset an outstanding place to live, play and work.