In the aftermath of the financial crisis, councils have been exploring innovative ways to stimulate local business and attract outside investment. It can be an uphill struggle in what is a challenging economic environment. Maidstone Borough Council, however, appears to have made some exciting progress.

In 2014, the council commissioned an economic development strategy that revealed seven out of 10 newly registered local businesses failed within two years. One of the reasons for this, the strategy concluded, was a paucity of flexible, good-quality office premises.

‘Those available in the market were five, 10, 15 year leases and costs were fairly high,’ says John Foster, the head of regeneration and economic development at the council. ‘There was a lot of home working going on and there was a feeling that businesses were isolated and not able to work with others. It wasn’t an easy working environment to start up your businesses.’

The Government’s decision in 2013 to allow buildings to be changed from office to residential use without planning permission left businesses in Maidstone struggling to find places to work. These changes have led to the borough losing an estimated half a million square feet of office space.

The council decided to intervene. It set up a pilot business centre where start-ups could base their operations in one of their own buildings. Named the Business Terrace, it has a couple of meeting rooms, five small offices and 15 hot desks.

‘We were flooded with demand when we opened it up,’ says Mr Foster. ‘It filled virtually in the first week. Over the course of 12 months when businesses were made homeless we were able to offer them a desk space to enable them to find an opportunity to move on to something more permanent.’

The high demand for flexible office space prompted Maidstone Borough Council to set up other work areas. With the support of their landlord Capital & Regional, the council has expanded the number of desks on offer from five to 23. They now have offices ranging from about 80 up to 1,000 square feet.

This is not just about space. The local authority also hopes to encourage businesses to cooperate with one another. ‘The idea is that we try and attract tenants who are interested in working collaboratively with each other, supporting each other,’ Mr Foster explains. ‘When a new start-up comes in they help each other.’

The council provides help as well. They have a contract with Let’s Do Business which offers one-to-one support on site to anyone starting up their own firm. They also have a contract with Kent Foundation, a charity which provides group business support sessions. Together these contracts cost the council £20,000 and the businesses nothing. ‘On top of that,’ Mr Foster adds, ‘we have existing businesses within the town and within the borough who are more than happy to volunteer their time to give pro bono support to start-up businesses, be it legal or insurance or finance.’

The results so far? Maidstone Borough Council has supported over 800 companies since it opened the Business Terrace. It has also apparently inspired the private sector to get involved. A company called Business Space, which provides office space in over 100 locations across the country, has taken 30,000 square feet in Maidstone where it will provide flexible offices for small businesses.

Last year, the local authority won an award from the Institute for Economic Development for one of the best economic development projects.

‘Part of the secret to our success is recognising what the market is looking for,’ says Mr Foster. ‘It’s looking for high-quality, flexible terms, easy-in-easy-out, start up offices on licences where you can leave within a months notice.’

The council is not resting on its laurels though. The Business Terrace model is to be replicated in the health and life sciences sector, with the council’s £9.5m Innovation Centre at Kent Medical Campus Enterprise Zone. The 37,000 square foot centre will provide flexible office space, facilities and business support for small and medium-sized enterprises working in the life science, healthcare and med-tech sectors.

‘We’re learning from our experience with the Business Terrace to take the next big leap which is looking to develop sector specific, high growth, high skills, high wage type employment in Maidstone,’ Mr Foster explains.

‘It’s a massive undertaking, but we’re really excited about the opportunities it’s going to offer in Maidstone.

This feature first appeared in Public Property, sign up here for your free digital copy.