February’s Lighting Live Local Authority CPD event concluded with a fascinating panel discussion that considered how councils can capture, and maximise, revenue, the likely impact of local government reorganisation, and what local authority lighting might look like in 10 years’ time.
Delegates to the ILP’s Lighting Live Local Authority event in February probably didn’t need much reminding of the ongoing financial and operational challenges facing councils.
Nevertheless, the warning by the Local Government Association – published the same day, Thursday 5 February – that eight out of 10 councils in England risk becoming insolvent because of the spiralling cost of funding special educational needs was certainly a timely red flag.
As members gathered in Daventry, Northamptonshire, for the pivotal CPD day – returning now for its fourth successful year – the focus however was as much on the potential opportunities still available to lighting teams as the day-to-day challenges.
With the increasing commercialisation of street lighting as a highway asset – with the ‘humble’ lamppost now hosting everything from CMS and smart city tech through to sensors, EV charge-points, banners and more – how councils can best maximise the potential revenue from this was at the heart of the day’s closing panel discussion.
Chaired by Michala Medcalf, street lighting manager at Derby City Council and the ILP’s Senior President Elect, the debate brought together Rob Baines, electrical asset commissioner at Derbyshire County Council and Chair of the ILP’s Local Authority Lighting Committee, Claire Blandford, senior street lighting engineer at Hampshire County Council, and Fiona Horgan, head of lighting and traffic engineering at Islington Council.
They were joined by Karl Rourke, street lighting service manager at East Riding of Yorkshire Council (and a speaker earlier in the day), Richard Webster, street lighting services manager at Suffolk County Council, and Dean Wendelborn, project manager, street lighting, at Westminster City Council, with the panel therefore representing a broad mix of urban and rural, smaller and larger, local authorities.
Michala opened the discussion by recapping on the ILP’s survey of local authority lighting teams last summer that aimed to gauge the key headaches keeping members awake at night (as reported on in Lighting Journal in November and last month). This identified skills and funding shortages and attachments as the top three concerns facing local authority lighting teams.
GEOGRAPHY VERSUS INCOME
How, then, questioned Michala, can local authorities gather new income streams? ‘It is both a question and a challenge,’ she added.
‘When we were first looking at this, one of the things that became really apparent was geographical location,’ pointed out Rob Baines. ‘Derbyshire, for example, is quite a rural authority whereas, obviously, someone like Dean at Westminster has a lot more hustle and bustle. So one of my questions is how can geographical location help or hinder commercial success?’
‘You think of it, we’ve got it in Westminster,’ Dean agreed. ‘We’ve got 2,500 in-column EV chargers – which means we’ve basically run out of columns we can use, because those are the ones that are in residential parking bays. The other issue with that is then we can’t use those columns for anything else because the EV charge-point uses up all the energy. And anyhow I don’t want everything attached to my columns.
‘Everything we have has contracts in place, looked after by dedicated teams. Our WiFi, 5G, small cells concession contract is more than £1m a year over 10 years plus a 20% revenue share. It’s only on about 400 columns, and they have even paid to replace columns that have failed a structural assessment. They have their own UMSUG codes, they use our contractors to install and do the six-monthly checks; but it is a lot more work,’ he added.
Similarly, when it came to banners on columns, this was a growing issue in Westminster. ‘Everything you can think of, we’ve got it,’ Dean reiterated. ‘It does bring in a lot of income but that’s looked after by other departments. I’m sure in the ether of time some of that money does drip into my revenue, but I don’t specifically see it. I help, I assist, I make sure the lighting column stays up, I make sure it stays on; the rest of it is for other people, that’s how I treat it,’ he added.
Fiona Horgan, who worked at City of Doncaster Council before moving to Islington, very much agreed there was something of a north-south divide to this question. ‘There clearly is a difference, just because of the demand. Demand is going to direct what, commercially, the organisations that want us to put these assets on to our assets are going to be requesting.
‘The demand in London, for example, for 5G and small cell technology is higher; it is expanding and is probably one of fastest-growing areas. So, we have been looking at that, how we can expand the network,’ she said, adding that councils were implementing different models, with Westminster’s percentage payback model especially innovative.
‘If you are heading up a lighting service and have a pressure on your revenue, it is probably in your service area’s interest to try and start to negotiate that,’ Fiona added
RING-FENCING REVENUE
How can lighting teams keep this revenue coming in and, as importantly, ring-fence it so that it comes into street lighting or electrical budgets, Rob Baines asked the panel.
‘It sounds silly, but read your own websites about decision notices,’ said Dean. ‘That’s how, often, I find out what’s going on. If I can get in earlier, I can influence the need to say “I need a person with me to manage this, because the person in your team is not competent”.’
Claire Blandford pointed out that, in Hampshire, the situation was complicated by the fact they are still 16 years into a 25-year PFI contract. ‘So, we are limited to what we can do because the PFI is quite prescriptive; it is hard to change the PFI without it costing a lot of money and time. But we have looked at solar power for the future,’ she said, especially with the county’s south coast obviously have good solar radiance.
‘We are looking too at new developments in the future. So, the developer pays the upfront cost and then we take that on,’ Claire added.
‘We tend to drive it all ourselves,’ said Richard Webster, adding that Suffolk had now established its own licensing team. ‘We’re quite a rural county, so activity tends to be centred around our main towns. What we’re tending to find is that people on the team who are dealing with attachments are now charging for their time. That way we can recoup our revenue costs.
‘There seem to be more and more attachments. We’re still 4G in Suffolk and so we’re trying to catch up with everyone else. Things like developer signs, hanging baskets, festive lighting – this is all now generating income. We work with our contractor and we’ve now started to move into the commercial world, doing some small schemes and, again, that is generating an income. Income generation is very high on the radar in Suffolk,’ Richard added.
‘It is difficult, given where we are in terms of our geography,’ agreed Karl Rourke. ‘East Riding is an extremely rural area; I think we’re probably now the biggest unitary authority in the country, at 1,000 square miles. But we only have 42,000 assets. Which gives you an idea of our rurality.
‘There is very little demand in our area for 5G. In terms of commercialisation, we therefore have to look differently. We are a DLO, so we specialise in selling our labour and expertise. But there are restrictions on that because on that element of work we can only charge cost recovery.
‘What we are now actively exploring, and I think it is probably going to be an option for a lot of authorities going forward, is breaking that work off into an arms-length company. By doing that, we remove the trading restrictions from us being a local authority. So it is a company wholly-owned by the council but is allowed to trade on a private basis, making private-sector margins.
‘One of the other things we do have in East Riding is we have a sign shop. We manufacture all our own signs, we sell to neighbouring authorities, thanks to the Live Labs project we’re geared up now so that we can manufacture Class 3 signs, so we can sell to National Highways and places like that. That does bring in a reasonable amount of commercial income,’ Karl added.
WHERE WILL BE IN 2040?
As the discussion drew to a close, Michala asked the panel to get out their crystal balls and imagine what local authority lighting might be or feel like 10 or 15 years from now. ‘What do you think commercial services around street lighting will look like from the year 2040 onwards?’ she asked.
With the ongoing roll out of full fibre plus the Department for Transport’s ambitions around expanding data-led infrastructure, Rob Baines predicted the future will be about information and data – information management, ownership and, critically, revenue.
‘All of that is going to be very data intensive and, if we can get that comms network and backbone in – piggy-backing on the street lighting infrastructure – that’s where I think we will be going,’ he said.
Fiona Horgan highlighted the acceleration of AI is likely to be a key impact. ‘Especially with AI and more automation coming in, staff are going to have to be a lot more multidisciplined. They’re going to need to be able to pivot. Particularly when you’re in a small authority, specialisms are going to become closer together,’ she forecast.
‘How long will it be before AI is doing a lot of the calculations, a lot of the jobs, and we just need someone above to authorise things? It is a scary thought, so we need to start to prepare ourselves to be equipped for that, and how that will change us as a service,’ she added.
‘The street lighting network is now looked after by one company; it has been completely sold to a 7G company, which is controlling all the robot cars!’ joked Dean Wendelborn, to laughter from delegates.
‘Our revenue comes from parking but what if people don’t have cars anymore? We have sold our lighting stock. That could be where we are. If all the revenue is coming from the comms, someone is going to buy that from us,’ he added.
‘There is change coming, and there is change coming fast,’ emphasised Karl Rourke, and concluding the discussion. ‘Because we are now living in a world that is driven pretty much exclusively by data, whether that’s data transfer or data ownership; data is a commodity. So, if we are collecting data through our assets, we have a saleable commodity.
‘Increasingly, we aren’t street lighting teams, and street lighting managers, anymore. We are managers of a powered structure in the highway. In the next 10 years, it is going to shift more towards that, with the massive demand for high-speed connectivity.
‘I think that is where we are heading as a sector. We are heading down a data route, towards a multi-dimensional sector where we are a power-point in the highway, and are gaining the income/revenue from that. Whether it has a streetlight on the top is almost irrelevant; if it has, then it is a bit of a bonus. Because it will keep dinosaurs like me going!’ he added.
THE PANEL
- Rob Baines, electrical asset commissioner, Derbyshire County Council, Chair of the ILP’s Local Authority Lighting Committee
- Claire Blandford, senior street lighting engineer, Hampshire County Council
- Fiona Horgan, head of lighting and traffic engineering, Islington Council
- Michala Medcalf (chair), street lighting manager, Derby City Council, ILP Senior President Elect
- Karl Rourke, street lighting service manager, East Riding of Yorkshire Council
- Richard Webster, street lighting services manager, Suffolk County Council
- Dean Wendelborn, project manager, street lighting, Westminster City Council
This is an abridged version of the article that appears in the March edition of Lighting Journal. To read the full article, simply click on the page-turner to your right.
Image: the panel at Daventry, from left: Claire Blandford, Fiona Horgan, Dean Wendelborn, Karl Rourke, Richard Webster, Rob Baines and, chairing, Michala Medcalf
