There are many different ways in which commercialism can be used as a means of delivering a council’s objectives including:
• Charging for certain services to make a surplus which can be fed back into public service provision
• Changing the way services are delivered in-house to make them more sustainable
• Developing new market opportunities, and
• Investing in real estate.
But what enables success in commercialism? At Local Partnerships, we recognise there are many different factors to consider when adopting commercialism and have developed a toolkit to help local and combined authorities cover them.
One key takeaway is that commercial activity is always subject to change and should be kept under review. The timing of any review should relate to the level of risk of the activity to the council and the nature of the market in which the council is operating. Significant changes in things such as interest rates would justify weekly monitoring and frequent in-year reviews, if a council was involved with direct housing development.
Reviews are not just required because the business case, or starting point for approving the activity, was wrong. The landscape within which a council operates will change and it may be that initial assumptions need to be revisited. Changes could include falling demand for a particular service, or the expertise to provide the service no longer being available.
The rationale for having a company or carrying out a particular commercial activity may also change over time, or there may be new leadership with different ideas. Changes are sometimes made without being supported by a sound business case which can cause problems. It may become apparent that officers and members are not sufficiently skilled in the appropriate areas to be able to ensure the commercial activity is a success, or individuals with the relevant experience move on.
The Local Partnerships guide provides a convenient reference point, accessing whichever component as required. By referring to it whenever needed, it will help to keep any commercial venture on track, and succeed. We hope that this will be invaluable as councils navigate the challenging, but potentially rewarding, world of commercialism.
Vivien Holland is director, Local Partnerships (@LP_localgov)
This article is sponsored content for The MJ