There is a growing trend of Local Councils providing traded services to schools, academies, district councils and other public and third sector councils. This is because Councils are facing a 40 per cent decrease in their funding and they are looking at income generation to protect valuable frontline services.
The Local Government Association has identified three general means by which Local Councils generating income through:
- Council assets – for example developing private rented housing which the council owns & runs, but is let at higher market rents.
- Service delivery by trading services with other councils or winning new business to deliver services to other parts of the public sector. One innovative Council is offering bereavement services – including burial, cremation, memorial and bereavement support via an arm’s length company.
- Selling commodities e.g. recyclables and other waste. One London Council used an e-bay style system to sell 100 per cent of its dry recyclables to waste a management company.
These are some examples of innovative commercial thinking. Most councils now recognise the need to develop a more ‘commercially orientated people’ across their organisations. The issue is often that Council staff were not recruited or trained to be “commercial” but are imbued with the ethos of public service. To become more commercial there will need to be a change of thinking, behaviours, skills, knowledge, and competencies for some, if not all.
In the future, to deliver these innovative and commercially successful income generation schemes, I believe Council staff will be to be able to:
- Appreciate and assess the commercial strengths and weaknesses of the council
- Understand the market position of the council, its brands and USP
- Understand how their individual role fits into the wider context of the council
- Understand the markets in which the council could operate
- Analyse competitors, suppliers, customers, and potential income generation opportunities
- Appreciate the importance of environmental scanning in terms of predicting future opportunities
- Aware of how external factors impact on the council
- Appreciate the basic relationship between costs, price and profit
- Understand the key elements of a valid contract
- Understand legal remedies of contract failure
- Understand the need for pre-negotiation preparation
- Look at different negotiating styles, where they are appropriate and the impact on future commercial relationships
- Commercial risk awareness and risk management
- Identify the risk culture of the council and work within or challenge
- Understand how to identify, assess, and commercial mitigate risks
I have developed a simple web application that is designed to help Local Councils to manage the risks associated with entering a new market and or offering a new service
Many Councils will no doubt be looking to implement training and development programs to enable staff embrace this culture change. Our training course covering these main areas is available as in house bespoke course and also a generic open enrolment course in September.