Don Mackenzie
Don Mackenzie

Leader of the Council talks about the impact of cuts on Harrogate

29 September 2011

Over 130 local business owners and managers attended a meeting which addressed the economic impact of Government cuts on Harrogate, especially the tourism and retail trade sectors.

The leader of the Harrogate Council, Don Mackenzie and Andrew Jones the MP for Harrogate & Knaresborough addressed the group and gave an account of the Coalition Government’s economic policies and contrasted the relative performance of the UK economy compared with Greece and some other Eurozone economies

Following the two speeches there was an extended period of questions and answers about different aspects of the Harrogate economy, with particular focus on the Harrogate International Centre and the proposed Destination Management Organisation.

The Leader of Harrogate Council, Don Mackenzie’s presentation:

Like most local authorities, and in common with the private sector, Harrogate Borough Council is under great financial pressure. Apart from receipts from council fees and charges, our two main sources of income are from central government grant and from the council tax collected from local residents.

Our settlement grant from government for this year is 17% less than last year. That’s equivalent to a £1.6m reduction in our revenue budget. We already know that the grant will fall again next year by about 11% or over £1m. Harrogate has always received much less in central government grant than the average council. It just got worse.

At the same time, we have for the last two years frozen the amount of council tax collected from our domestic residents. If we are able to do the same next year, we will, but I can give no promises.

This council also has to rely more than other authorities on income derived from its services – planning fees, parking charges, conference and exhibition receipts, leisure facility entrance charges and property rents. In difficult economic times like these, this income is squeezed, at the same time as residents’ expectations are rising.

Harrogate Borough Council is committed to continuing to do more for our residents, with less of their money. Last year, to achieve a balanced budget after freezing council tax and taking the £1.6m hit to our Government grant, we made £910,000 worth of genuine efficiency savings. This year the efficiency savings totalled £574,000 producing the current balanced budget. We have no plans yet to cut services.

Where will we be spending more? We have to spend more on recycling; we have to continue to allocate funds to the completion of a Local Development Framework, to allocate land for homes, which your employees and our children and grandchildren can afford to buy or rent, and for offices and factories, which our employers need to develop their businesses; we face ever growing demands for better floral displays in our gardens and on our streets, for better play equipment in our parks, for more cycling facilities, for wider CCTV coverage, for better cultural services. The list of demands is very long.

Let me add also that we will do whatever we can to maintain the support, which the council provides to the voluntary sector, and which amounts to £166,000 this year. Organisations like the Council for Voluntary Service, the Citizens’ Advice Bureaux and Community Transport providers like Little Red Bus all see their workloads increase when the economy turns down. It is in tough times that they need the help from councils more than ever.

In short, and to do all these things, your council has to become – and we will become – more efficient in the way we deliver our services to you.

There are great challenges. The Harrogate International Centre, in common with many other such venues in the UK, is experiencing a reduction in sales. HIC is a wholly owned department of the council, and it lost over £1m in its trading performance last year, and likely to do the same this year. We have acted to reduce our costs by making staff redundant. This was a painful process, but one, which was essential and in the interests of our taxpayers, who are picking up the bill.

This week, the council’s cabinet will be taking a decision about the future management of the Royal Hall, which, as part of the HIC site and offering, played a part in the losses.

Above all, we must ensure that the Harrogate brand remain of the highest quality so that we continue to attract the business and leisure visitors into our hotels, restaurants, shops, conference halls and exhibition spaces. We are taking action to bring this about:

  • The £13m extension of the HIC is almost complete, on time and on budget
  • Greater focus on conference and exhibitions business
  • Experienced non-executive directors brought on to the HIC board
  • All entertainments box office operations transferred to the theatre
  • Working hard to bring in new, profitable business to the HIC
  • Full political support being given to the bid to bring the annual Gilbert and Sullivan Festivals and their 20,000 visitors to Harrogate
  • The Mercer Gallery, refurbished last year by the council, held its blockbuster exhibition of Atkinson Grimshaw paintings between mid-April and early September this year, attracting 35,000 visitors to the town, of whom 37% came from over 50 miles away just to see the exhibition
  • £20,000 initial investment in the Destination Management Organisation launch, and setting up of various task and finish groups

The Director of HIC, Angus Houston, has strong political support in his actions to restore HIC to profitability. Our sales efforts are being redoubled, and are directed towards attracting conferences and exhibitions, which bring in delegates to stay in our hotels, eat in our restaurants, buy from our shops and visit the district’s attractions. At the same time, we cannot take bookings for events, which will incur losses for our taxpayers.

I am pleased to be able to confirm this evening some further good news from Alison Griffin’s sales team at HIC:

  • We have secured a large medical conference for October 2012. This 5-day tenancy will be new to Harrogate. Full details will be announced to the media shortly.
  • Against strong competition, we have won back for 2014 The International Association of Teachers of English as a Foreign Language. This booking is valued at six figures, will last for five days, and was won from a final shortlist against ICC Birmingham.
  • A further success is the winning of the British Surgery of the Hand conference in 2013
  • We learned just last Thursday that we have won back the Building Societies Association Conference for 2013, after beating both Liverpool ACC and Birmingham ICC in a shortlist. They were last with us in 2009, and have also pencilled in 2014 with us.

I want to assure Chamber members that we are determined to put in some hard selling to retain our regular customers, and, especially, to win new business so that we put HIC and Harrogate back as one of the most popular choices at the very top of organisers’ lists of conference and exhibition destination venues.

Chamber members will also be aware that council members and officers, and our MP, gave full support to this Chamber’s efforts to improve our direct rail links with London. We are doing the same with the current bid to electrify the line between Harrogate, Leeds and York. I am fully aware that good rail connections to and from Harrogate are a vital ingredient of what this town has to offer our visitors.

Our road infrastructure is also under great pressure, and traffic congestion is not conducive to efficient business. As far as road maintenance is concerned, North Yorkshire County Council have secured a further £2m for immediate resurfacing of winter-damaged roads in Harrogate town centre, including Cold Bath Road, Kings Road, Victoria Avenue and York Place.

A much more important issue is the fundamental improvement to our town centre traffic flows. Chamber members will recall the negative response in the media to plans for both Station Parade and Parliament Street. I considered the Lateral Group’s plans for Parliament Street very interesting indeed, and appreciate the fact that Philip Lunn is willing to devote time, energy and funds in his search to improve the town centre for all. I can confirm this evening that I have been asked to chair a steering group to advise the county on fundamental transport improvements in the town centre. This group will be made up of three other councillors and four officers drawn equally from the borough and county councils. There will be a very wide engagement group whose advice we will be seeking – coming from bus and rail operators, local businesses, and, of course, from this Chamber. There is already £1.65m funding available from the county’s Regional Funding Allocation programme, with more to come from additional bids for funds being lodged by NYCC. I want this money to be spent in the town centre.

Our first meeting is tomorrow.

I am aware of the recent establishment of the Town Centre Development Group, which is committed to advancing the interests of the retail sector in HG1, and I confirm that the council are prepared to work very closely with it.

As far as Christmas decorations are concerned, members here tonight will know that Harrogate Council is once again giving £10,000 towards the town’s Christmas lights this year. I am delighted that this money has again helped to encourage the fantastic fundraising efforts of the ‘Harrogate at Christmas’ group and the local business community.

Everyone present here tonight can be sure that the local economy is now the council’s number one corporate priority. Whilst our economy is actually doing pretty well in comparison with many other places, we made this decision in recognition that the council, residents and businesses in Harrogate are all facing significant challenges. Our ambition is for a sustainable and diverse economy, a vibrant tourism product, good travel, transport and electronic infrastructure and a world-class conference and exhibitions centre – an ambition that I know is shared by many of you in this room tonight.

There will shortly be a fundamental review of the council’s Economic Development Strategy by the Cabinet Member for Planning, Transport and Economic Development. Our Economic Development Manager, Kathryn Daly, who is here with us tonight, is recommending that we respond to the changes in the economic situation by targeting more specifically the promotion of the visitor economy to include the priorities of the HIC and of the town’s retail sector.

And finally, I can confirm that the Council has begun an urgent review of its office requirements. We have five office establishments scattered around the town centre – Crescent Gardens, Knapping Mount, Scottsdale House, Springfield House and Victoria Park House. Chamber members will understand that there are disadvantages to any organisation in being spread so wide, in buildings, which place constraints on efficiency, teamwork and public accessibility. We are currently examining a shortlist of options, which may result in the near future in real estate disposal, acquisition of a replacement site and a boost for new jobs, new houses and new hotel space for the tourist industry in the town centre.

As I stated at the commencement of my presentation to you this evening, your council is committed to doing more for its residents and businesses on reduced budgets, and we can do that only by becoming even better and smarter in delivering our services to the public. You can take it from me that I will do everything in my power to make it happen.



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