As local public services are under increasing financial pressure there is an growing interest in income generation which can be used to contribute to the sustainability of core services.
What is clear is that there is significant potential for councils to generate much greater revenues with the limit being the imagination of staff. However operating in a commercial environment requires a shift in thinking and a clear, structured, well supported approach lies at the centre of a successful transition.
With this in mind, the Local reThink session on 16 October set out to share the approaches to this taken by Manchester City Council and Warrington Borough Council. Colleagues from Manchester kindly hosted the session at their magnificent new library which included attendees from metropolitan, county and district councils who all contributed to the debate.
These sessions are run under the Chatham House Rule. Therefore the outputs are summarised – if you would like more details we can help connect you to people to follow up with.
The opportunities which were discussed included:
- Markets, including the new Youth Markets http://www.theguardian.com/small-business-network/2015/jul/31/teenage-markets-revitalising-uk-towns-traders-entrepreneurs
- School catering
- Fleet services
- Parking
- Facilities management
- Cemeteries and crematoria
- Pest control
- Early years support services
- Training and CPD
- CCTV and bus lane enforcement
- Advertising and the links with development and planning
- District heating and energy generation including solar and renewable
- Salary sacrifice schemes
- The importance of a strong credit rating
The points noted regards the approach to commercialisation included:
- Getting the sequence right: Optimising current opportunities, up-skilling staff, identifying new opportunities
- Engaging staff and politicians – what “commercial” means, why it should be framed less on “sales” but on “good customer service”.
- Income generation as a driver for change
- Existing powers and why it isn’t necessary to set up Local Authority Trading Companies (LATCos)
- Freeing up existing capacity.
- Taking an iterative approach to solution development
- Customers and the importance of good relationship management
- The value of benchmarking and taking a hard, honest look at service quality
- Failures being inevitable but that these are learning opportunities, not reasons to give up
- Leader, chief officer and treasurer support being vital, particularly support to move quickly and maintain momentum
In wrapping up we reflected on the following key success factors:
- Due to the statutory nature of councils, we should look to leverage the physical and other assets that convey advantages. Examples include:
- buildings and other locations and services with a geographic basis e.g. CCTV
- existing services and spend that provide scale already e.g. training
- Focus on where excellence lies and be honest about it
- Have a credible, passionate lead individual who is dedicated to delivering the vision
Particular thanks go to Ian Brown, Head of Procurement at Manchester, Dave Lea, Commercial Director, Manchester City Council, and Dave Roberts, Head of Traded Service Strategy, Warrington Borough Council.
Additional resources:
Photo by josep