Service Transformation

30.06.17

Commit to thinking differently

Source: PSE Jun/Jul 17

The drive to cut costs has invoked an efficient and sustainable entrepreneurial spirit at Birmingham City Council (BCC) that is now set to play a major part in the local authority’s future, writes Ken Lyon, its head of commercialism.

Funding cuts to local authorities and particularly those serving large cities are well documented, and an environment of service cuts and ongoing budget reviews have become an accepted and unfortunate part of the landscape for local councils. However, the drive to reduce costs and the need to do things differently has provided a context for the rise of an entrepreneurial spirit within councils, which has seen the development of a range of new approaches to addressing the funding gap. 

At BCC, as Europe’s largest local authority, we have developed a multi-pronged strategy to our commercial journey. Underpinning our approach is a confidence in our ability to deliver and a recognition that embracing change and innovation is key to adapting to the needs of a commercial market. Commercialism is strongly led at both a political and officer level within the organisation, with Cllr Majid Mahmood, cabinet member for value for money and efficiency, a particular champion: “Commercialism demonstrates our commitment to our citizens to do everything possible to protect and invest in services to our city.” 

As officer lead and chair of the officer/member commercialism board, chief operating officer Angela Probert believes that “commercialism is central to our ability to be effective as an authority and is ever more important in our ability to set a balanced budget”. 

The Birmingham approach builds on four key pillars of our organisation, which are: 

  • Established services and natural economies of scale – e.g. traded services
  • Assets that we own and have commercial potential – e.g. advertising portfolio
  • Influence, partnerships and role in the market – e.g. shared services
  • Effective, risk-based investment, leading to revenue and capital benefits – e.g. investment and property portfolio 

Although we are still near the beginning of our commercial journey, we have already achieved some significant successes across each of these elements.  

For example, our catering organisation, CityServe, recently won national acclaim and awards for its innovative ‘social commercialism’ approach to the schools catering market. Previously the council had been set to withdraw the service, but Cllr Mahmood thought differently: “I could see there was a real opportunity to develop a strong commercial service with social values and opportunities that provided a unique selling point to our customers.” 

CityServe’s ‘It’s all about the kids’ approach has not only seen the service move from an operating deficit of £0.6m to a £2.3m surplus, it has also provided a platform for the organisation to enable city children to engage differently with food, champion healthy eating and to counter ‘holiday hunger’. By investing in our ‘City Kitchen’ facility, we have enabled children from our 280 school customers to play an active part in setting and developing menus and engage in the services we provide in a new and unique way. As an organisation, we very much see this as phase 1 of our approach – with a move to become more of a player in the regional market, our next step and the development of a broader catering brand. 

Our commercial approach is not all about ‘going it alone’ though, we have also developed partnerships across the public and private sectors to where this will help us best achieve financial returns. For example, we have established a strong commercial relationship with an industry specialist to help us maximise the value of our advertising assets across the city – our unique and diverse range of platforms has led to us generating over £2.5m per annum surplus to date and to the further development of new assets. 

Further examples of commercial thinking in Birmingham include the development of the ‘InReach’ housing company – delivering high-quality new homes to the city while delivering a financial return – and also rebalancing and reviewing the investment property portfolio, enabling us to act with more agility and success. 

To achieve this in a sustained, replicable and meaningful way we need to become more commercially agile. Developing a pragmatic corporate approach to internal ‘blanket’ processes and controls around disciplines such as finance, legal, procurement, IT and HR frameworks is vital in ensuring that we are able to compete successfully on a commercial playing field. 

Moving forward 

Commercialism is very much part of the future for us as a council and for the sector as a whole, where the diversity across authorities will lead to many and varied approaches. However, the core ingredients remain the same – creating an environment where change can flourish and an underlying confidence in our ability – and above all a commitment to thinking differently to enable us to deliver the best services possible to our citizens.

FOR MORE INFORMATION

W: www.birmingham.gov.uk

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

latest public sector news

Academies mean councils struggling to take integrated approach to education

23/02/2018Academies mean councils struggling to take integrated approach to education

Councils are struggling to take an integrated approach to education in areas where high numbers of secondary schools are academies, a report by the... more >
Core Cities leaders press for domestic post-Brexit agenda after meeting with Barnier

23/02/2018Core Cities leaders press for domestic post-Brexit agenda after meeting with Barnier

Leaders and mayors representing Core Cities UK have met with the EU chief negotiator Michel Barnier this week. The Brussels meeting saw leaders ... more >
DHSC seeks views on addressing care workforce challenges

23/02/2018DHSC seeks views on addressing care workforce challenges

A consultation focusing on the adult social care workforce has been launched by the Department of Health and Social Care (DHSC), in partnership wit... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
View all News

the raven's daily blog

Whole of government must act together to fulfil the ambition of the Industrial Strategy

11/12/2017Whole of government must act together to fulfil the ambition of the Industrial Strategy

Jen Rae, head of innovation policy at Nesta, says the aims in the government’s new Industrial Strategy are ambitious, but will require a shift in policymaking in order to be realised in full. Last Monday saw the long-awaited launch of the UK’s new Industrial Strategy, the government’s plan for prosperity and growth in a ... more >
read more blog posts from 'the raven' >

comment

An unsettling finance settlement?

23/02/2018An unsettling finance settlement?

Piali Das Gupta, head of policy at Solace, looks over the final local government finance settlement and argues that it does not do enough to supp... more >
Finance settlement: a golden opportunity

23/02/2018Finance settlement: a golden opportunity

The local government finance settlement must enable counties to continue to be the engines of the English economy by providing a fairer funding a... more >
Data protection by design

23/02/2018Data protection by design

Nigel Houlden, head of technology policy at the Information Commissioner’s Office (ICO), looks at how organisations can win back public tru... more >
Citizen-centric cities for a better tomorrow

22/02/2018Citizen-centric cities for a better tomorrow

Mark Collin, group director of Ventures at ThoughtWorks, discusses how governments can learn from a bottom-up, citizen-focused approach to d... more >

interviews

BIM: Digitising the public sector

19/02/2018BIM: Digitising the public sector

PSE’s Josh Mines talks to Stephen Crompton, CTO at GroupBC, and Stuart Bell, the company’s sales and marketing director, about how Bu... more >
Duncan Selbie: The energy of devolution

19/02/2018Duncan Selbie: The energy of devolution

The NHS plays a part in keeping the country well – but when it comes to places and their people, local government has a major role to fulfi... more >
Are we taking a risk on education?

14/12/2017Are we taking a risk on education?

Adrian Prandle, director of economic strategy and negotiations at the National Education Union (NEU), questions the stark lack of announcements a... more >
A fantastic opportunity awaits you

11/12/2017A fantastic opportunity awaits you

Eight months on from the government’s announcement of major training reforms, Anne Milton, minister for apprenticeships and skills at the D... more >

public sector focus

View all News