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Developing commercialism in local government

A conference in March will bring together innovative councils exploring the local drive towards commercialism and the reshaping of services to meet ever increasing demand. Buckinghamshire County Council’s leader Martin Tett and chief executive Chris Williams are two of the speakers giving their thoughts and experiences on the importance of commercialism in local government. They are convinced that authorities’ future survival depends on a blend of cutting-edge public service provision with best practice from the private sector. The ‘commercial council’ approach should be today’s standard approach for local government, not a nice to do, they argue.

For sure, times are incredibly challenging and colleagues in councils up and down the country are taking critical decisions about future funding and service levels.

In Buckinghamshire life’s been no less easy. Over the past four years, with Government grant reducing by 41%, we’ve needed to deliver savings of £85m. The future too looks equally bleak – an additional 24% cut in Revenue Support Grant is expected and savings of a further £60m needed to balance the books. And all this against a backdrop of increased demand for services, changing demographics, rising customer expectations and the need for massive continued investment in our residents’ number one priority: fixing our local roads.

We knew that efficiency savings and ‘tightening our belts’ were never going to be enough to plug our particular financial chasm. What we also needed was to develop a more commercial-minded approach to running our business. In essence, going ‘further, faster and cheaper’ than ever before.

But what does this actually mean in reality? Well for us, it’s developing a better understanding of our customers and communities, enhancing our skills to select and manage suppliers and achieve best value for money, becoming more entrepreneurial in our approach and constantly challenging how we can reduce costs, streamline processes, improve our performance and generate additional income.

So how have we modelled this approach in practice and what have we achieved?

• We’ve established a new charity-based ‘Buckinghamshire Learning Trust’ run by schools and the county council to provide high quality support for early years and schools.

• We’ve created a bespoke trading organisation, Buckinghamshire Care Limited, independent but 100% owned by the council. The company now has the freedom to offer clients a wider range of care services, with profits re-invested back into other council services.

• We are establishing a new museum trust and all of our outdoor education services are now provided through a new charitable trust called the Adventure Learning Foundation.

• The council is also linking with the Buckinghamshire and Milton Keynes Fire Authority to form a limited company, Buckinghamshire Law Plus. The new shared legal company will be one of the first, if not the first, local authority-led schemes of its type to be licensed by the Solicitors’ Regulation Authority. A detailed business plan projects a £1.7m net shared profit over the first five years.

• Residents and communities have stepped up to the plate and, with our support, they now run 13 community libraries, 16 local youth centres and two day centres across Buckinghamshire.

• Other services have been fully outsourced including highways to Ringway Jacobs, economic development to Bucks Business First and a number of our children’s centres to the Barnardo’s charity.

• Over 15 services are now delivered in partnership with other councils or ‘traded’, from travellers’ services to payroll and recruitment.

• We’re becoming more commercially savvy with initiatives we have developed. For example, a brand new self-developed contract management system is being marketed to other organisations to help them deliver further savings

• Simple ‘process savings’ have proved very important. For example, a two-year project to reduce the number of networked printers across the council from 650 to 220 generated savings of £70,000 per year.

• Over the last two years, we’ve introduced an innovative, class-leading ‘contribution based pay’ system which, for the first time, rewards staff on the basis of achievement rather than time served. Other councils have attended our learning events on this radical new development.

• Revolutionised our office usage by creating new flexible working areas and hot-desking around a ratio of four workstations per five staff. As a result, one-third more staff can now work at HQ allowing the future disposal of our old County Hall building.

However, our innovative approach doesn’t stop here. We’ve got much further to go to create our full vision of what we think a commercially-minded council needs to deliver. Over the next 18 months we’ll be implementing the ‘Our Future Shape’ programme, which establishes a small but strong council headquarters ‘core’ with services delivered through a variety of different business units and delivery models.

These could be in-house, traded externally, community based, trust arrangements, alliances with other councils, joint ventures or any other model that best suits future service delivery to our customers.

We see our commercially-minded council blueprint as the best way to face such a challenging and unpredictable future.

An approach that may have been seen as too radical just a few years ago is now necessary and mainstream for our Council.

Capita Conferences’ ‘Developing Commercialism in Local Government’ conference is on Wednesday 19 March 2014 at a central London location to be confirmed. Click here to find out more or book your place. 


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