Despite the changing political backdrop, commercialisation strategies and partnerships are becoming increasingly commonplace within local government to boost income and increase efficiency.
In fact, 94% of local authorities now share some services with another authority and 58% own a trading company. However, commercialisation isn’t a straightforward process; whether it’s developing the right skills, or simply knowing how to broker successful partnerships that make real financial sense, strategies need to be bespoke to individual organisations’ needs.
Our report, The Commercial Imperative, looked at some of the many ways that local governments are identifying alternative income streams to plug the funding gap. Today, 91% of local authorities use assets, such as the land they own, in an entrepreneurial manner to generate income. While commercialised approaches and options are plentiful, finding the right strategy to deliver genuine and reliable returns while supporting community priorities is a task that few local authorities have found easy. We found that successful commercial models incorporate three core themes:
Risk: to replace lost government grant funding, some councils are taking on risks perhaps unthinkable a decade ago. To mitigate against this, many local government leaders are taking smaller steps rather than one giant leap. In fact, 35% of council leaders and finance directors polled in our report said they were focusing on smaller, less risky projects to bring in additional income.
Skills: the public sector needs to up-skill to deliver successful commercial models. While this includes traditional skills including legal, marketing and political awareness, it also includes more subtle attributes, such as working in alliances, good governance and stakeholder management. A cross fertilisation of skills is needed to provide the right leadership and share knowledge across the organisation. To achieve this, you need a transformational leadership community which is willing to collaborate.
Transparency: for public sector organisations, all commercial actions must be transparent and show deliverable outcomes. Just as the private sector battles with tight budgets, a changing economy, increasingly complex demands from customers and rapidly innovating competitors, authorities must be passionate, skilled, committed and disciplined to drive successful commercialisation projects forward.
Local authorities are juggling a wide range of transformational activities. While adding commercialisation to the mix may seem daunting, with no sign of financial and service demand pressures abating – it’s essential, as is building teams with the required skills. It goes without saying that those who make the journey with the most passion, commitment to success and flexibility will be the ones who see the best results, and ultimately will be the ones who most improve the lives of the communities in which they operate.
Paul Bradbury, executive director of business development, Civica
Column sponsored and supplied by Civica
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