Developing Commercialism in County Councils Jonathan Flowers Local Government Market Director, Capita plc & Director, Veredus

Developing Commercialism in County Councils

Jonathan Flowers

Local Government Market Director, Capita plc & Director, Veredus

© Capita 2013 [email protected] @jonathanflowers

Shape of this session

Setting the Scene - Capita

• Thinking about commercialism

• Sharing survey results

Example – Staffordshire CC

• A living example

2


This session is about

OUTSOURCING

Starting a conversation about the possible roles of commercialism

3


Effective longer term measures to combat Austerity…

62% said Council commercialism would be an effective measure…

64% this year…

4

Last year’s survey ...


Don't know

Not applicable - we're already at the desired level of commercialism for our council/authority

The single least important action you take

Amongst the few least important actions you take

As important as any other action you take

Amongst the few most important actions you take

The single most important action you take

9

0

0

5

35

40

6

Base: 86 (all respondents, CCN/Capita survey of CCN member councils),30 September-3 November 2013

5

How important is significantly increased commercialism likely to be?


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 2013 [email protected] @jonathanflowers 7

Importance of potential reasons for wanting greater commercialism (amongst those councils that did want it)

“Very” or “fairly” important scores





73%

84%

90%

74%


1. Make profits with which to fund/protect services or keep council tax down

8

What might “Council Commercialism” achieve?

Existing New

NewStarbucks in the Library(LB Hammersmith & Fulham)

Me, Myself and I (Staffordshire CC)

Existing Fees and charges Traded services eg, library services (Essex CC to Slough BC)

Customers

Pro

du

cts

/Ser

vic

es



9


Existing New

NewCross-sellingMarketing

New Product Development

ExistingYield managementPrice discrimination

Business Development

Customers

Pro

du

cts

/Ser

vic

es



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



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


11


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...

12



Creating our own commercial entity

Changing remuneration structures (higher earnings potential for highest performers)

Recruiting people with relevant expertise on a permanent basis

Bringing in expertise for a fixed period to get things started

Taking a longer-term view of investment

9

11

11

12

15

46

18

49

66

57

15

18

18

8

17

20

43

14

11

5

6

6

5

3

3

3

3

3

3

Done this, don't need to do more Done this, need to do more Plan to do this

Haven't done and won't do DK No answer

Base: 65 (all respondents who rated their council’s/authority’s 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”


3

3

5

6

6

6

8

9

11

11

12

15

46

60

38

54

65

77

35

46

18

49

66

57

20

23

31

23

20

11

28

15

18

18

8

17

18

9

20

14

5

3

15

20

43

14

11

5

9

2

3

2

11

6

6

5

3

3

3

3

3

3

3

3

3

3

3

3

3

Done this, don't need to do more Done this, need to do more Plan to do this

Haven't done and won't do DK No answer

Base: 65 (all respondents who rated their council’s/authority’s 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


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


15


Would you say that you are a commissioning council?

Not stated

Don't know

Strongly disagree

Tend to disagree

Neither/nor

Tend to agree

Strongly agree

17

5

3

12

21

28

14

Base: 86 (all respondents, CCN/Capita survey of CCN member councils), 30 September-3 November 2013

42%

15%


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


17


Each authority will make its own form

of “commercialism” (or not)

This is a “work in progress” for all of us

Let’s continue the conversation ...

18

Summary





OUTCOMESCommercialism

Documents

Developing Commercialism in County Councils Jonathan Flowers Local Government Market Director, Capita plc & Director, Veredus