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Developing Commercialism in County Councils Jonathan Flowers Local Government Market Director, Capita plc & Director, Veredus
© Capita Shape of this session Setting the Scene - Capita Thinking about commercialism Sharing survey results Example – Staffordshire CC A living example 2
© Capita This session is about OUTSOURCING Starting a conversation about the possible roles of commercialism 3
© Capita Effective longer term measures to combat Austerity… 62% said Council commercialism would be an effective measure… 64% this year… 4 Last years survey...
© Capita Base: 86 (all respondents, CCN/Capita survey of CCN member councils), 30 September-3 November How important is significantly increased commercialism likely to be?
© Capita 1.Make money to spend on priorities 2.Change culture – more business-like 3.Support Commissioning Council 4.Become more business friendly 6 Commercialism is a (possible) means to an end... And means different things to different people OUTCOMESCommercialism
© Capita Importance of potential reasons for wanting greater commercialism (amongst those councils that did want it) 7 Very or fairly important scores 1.Make money to spend on priorities 2.Change culture – more business-like 3.Support Commissioning Council 4.Become more business friendly 73% 84% 90% 74%
© Capita 1. Make profits with which to fund/protect services or keep council tax down 8 What might Council Commercialism achieve? ExistingNew Starbucks in the Library (LB Hammersmith & Fulham) Me, Myself and I (Staffordshire CC) ExistingFees and charges Traded services eg, library services (Essex CC to Slough BC) Customers Products/Services
© Capita 1. Make profits with which to fund/protect services or keep council tax down 9 What might Council Commercialism achieve? ExistingNew Cross-selling Marketing New Product Development Existing Yield management Price discrimination Business Development Customers Products/Services
© Capita 1. Make profits with which to fund/protect services or keep council tax down Key questions: Are you prepared to invest to compete (and risk losing)? Do you have information you need (eg, pricing information)? Will you grow your own or buy it in? Will you actively develop your equity in businesses? Exit plan? Are you willing to compete with local business? Or other councils? 10 What might Council Commercialism achieve?
© Capita 2.A change in culture Typically very popular with those who also have private sector experience Many positive attributes actually stem from Competition... But Local Authority cultures and processes fit a council as a local monopoly provider of essential services publicly funded politically rationed democratically accountable What might Council Commercialism achieve? 11
© Capita 2.A change in culture Key considerations: Councils are different Your staff have dormant commercial skills You will have to make fundamental change to let it out Pros and cons of arms-length What might Council Commercialism achieve?
© Capita Base: 65 (all respondents who rated their councils/authoritys capacity to become more commercial in the future), CCN/Capita survey of CCN member councils, 30 Sept-3 Nov 2013 Ways of achieving greater commercialism – the top 5 already done 13
© Capita Base: 65 (all respondents who rated their councils/authoritys capacity to become more commercial in the future), CCN/Capita survey of CCN member councils, 30 Sept-3 Nov 2013 Ways of achieving greater commercialism – a significant work programme 14
© Capita 3. A key ingredient of becoming a Commissioning Council Provider side Most obvious need to be commercial Understanding how to grow, diversify, compete, stay relevant Commissioner side Think creatively and entrepreneurially Intervene skilfully to create new options Get the best out of suppliers Structure interventions for wider benefit What might Council Commercialism achieve? 15
© Capita Would you say that you are a commissioning council? Base: 86 (all respondents, CCN/Capita survey of CCN member councils), 30 September-3 November % 15%
© Capita 4. Better support to local business A better appreciation of what it means to be commercial is bound to help a council support its place to do business... Unfamiliar pressures Cashflow Bid costs Ongoing customer acquisition Strategic self-assessment Quick decisions Cluster effects of complementary businesses... And places are in competition too What might Council Commercialism achieve? 17
© Capita Each authority will make its own form of commercialism (or not) This is a work in progress for all of us Lets continue the conversation Summary 1.Make money to spend on priorities 2.Change culture – more business-like 3.Support Commissioning Council 4.Become more business friendly OUTCOMESCommercialism
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