Caja is seeking to work with at least two councils to build a programme to support councils ‘becoming more commercial’ – designed specifically with and for local authorities.
This co-creation of models and practices to support increased commercialisation of council activity will balance a public services ethos with the need for stronger business practices. It will look at a spectrum of being more ‘business-like’ to becoming fully commercial and creating new revenue-generating services. It will offer training and coaching, to ensure that leadership skills exist to deliver this outcome.
There will be significant benefits to the pilot councils – shaping the programme, learning from Caja and its partners, and securing significant value from being an early adopter.
Subsequently, the fully designed training and mentoring programme will be made available to any council that chooses to take part. It will help them to assess where they are in their commercial readiness and maturity, and then to prioritise learning, development and the introduction of commercial models, aligned to their council priorities.
All councils are facing cuts, with greater transparency in how public money is spent and a growing demand for services. All councils are, as a result, are having to become more business-like. This includes implementing tighter control of resources and overheads, demonstrable and effective performance management, higher levels of revenue collection, better utilisation of assets, and knowing which business activities generate the most efficient and productive outcomes for citizens.
Some councils are going further and seeking to become more commercial – operating as a business, not just being ‘more business-like’. This may include developing new and innovative services to sell, adopting new models for supply chain management, taking more risks and having a commercial approach to both internal and external service delivery.
Others are moving to a ‘commissioning only’ model for services, or are setting up trading entities to deliver public services with a clear separation of commercial practice from traditional council oversight and overheads.
Caja is seeking to work in partnership with at least two authorities wishing to develop their commercial ambition through a practical programme, which addresses the change in culture and practices needed. This programme will include:
Using a maturity model that describes a spectrum of commercial states (e.g. non-commercial, medium low, medium high, very commercial), councils will be able to judge their current position and plan for improvement according to their appetite and capability for commercialisation, with assessment and progress measured over the course of the programme.
Caja will co-create this programme of interventions to help councils to become financially sustainable or grant-independent, whilst meeting their political and public service priorities.
The pilot programme will ensure that ‘business as usual’ is not compromised, whilst at the same time creating an open and challenge-based environment in which to consider how future models of service delivery could operate.
The primary aim of the programme is to help councils to become more commercially aware and effective, for example in:
While many councils already have strong commercial skills and business practices, few have the experience, environment, processes and governance that would be equivalent to the best private sector commercial practice.
Furthermore, many are grappling with the internal tensions about what is the right model for the public sector and to create the right culture and skills base across all services. This includes ensuring political backing and support where required and that a public sector ethos is not compromised.
Whilst every council stands to gain from greater commercial and business awareness, there are risks and challenges to overcome, especially if there is misplaced enthusiasm to emulate the private sector without fully understanding the issues that exist in a local public service marketplace.
Bringing wide public and private sector experience, Caja will undertake an initial maturity assessment and then develop bespoke, targeting activities will support councils through each stage of a commercialisation process, whatever their starting position and level of maturity. Caja will also involve a range of professional partners – commercial experts from different sectors, finance, legal, procurement, HR and academic advisors covering all areas of commercial practice necessary.
The programme is designed to be excellent value for all councils, but especially those who want to be at the leading edge of public service commercialisation – selling and sharing services, building new business models for public/private partnerships and creating cultures that allow entrepreneurial enterprise to grow – without risking public safety or tax payer’s money.
The early adopter pilot councils will be able to shape the programme as a co-creator, whilst learning from experts, drawing on the insights from the other participating organisations and benefiting from the programme itself.
The programme will commence with a diagnostic stage to ascertain a council’s current ‘as-is’ position. This will be used to shape a targeted delivery plan which focusses on each council’s highest priorities and greatest challenges.
As well as supporting the drive to make savings, increase efficiency and improve productivity, Caja will help councils to build internal capacity and to transfer knowledge, particularly for the two chosen partner councils developing the programme. Caja will provide ongoing support around the organisational development programme to ensure the changes are embedded for the future.
In 2014 the LGA published the National Category Strategy with a focus on ICT procurement. The LGA is about to publish a second version which builds on the initial guidance but looks more broadly at procurement, collaboration and commercialisation. Together, our programme will build on the key themes and guidance delivered in the NatCatStrat2 with the aim of helping local authorities make the most of their assets, empowering customers, managing contracts more effectively and ensuring value for money across all services.
Local government has had to absorb cuts of over 40% over the last eight years with more to come. This reduction in funding is exacerbated by increasing demand for council services – both volumes (e.g. adult social care) and in how services are provided (e.g. better joined-up and more digitally enabled).
This puts pressure on councils to develop new ways of doing things, to manage demand, and to get the best from commercial providers – simply cutting costs won’t be enough. Whilst local government has been more successful than other parts of the public sector in responding flexibly and imaginatively to these challenges, anecdotal evidence suggests there is more to be done to sharpen practice.
Most savings to date made by councils have come from reducing internal costs, not tackling the opportunity of external costs, growing income, partnering and selling. Our aim is to ensure that the costs for a council choosing to participate in this programme are more than outweighed by quick and direct savings on current costs and the generation of new income streams.
The headline business case for the Caja programme and the councils that choose to embark upon it, is therefore based on three core factors:
The specific business case numbers will vary across services and councils. The programme will help to develop models that describe how savings can be delivered and the evidence for this, for the various levels of investment, appetite for risk, starting position and where a more commercial practice is to be targeted:
The business case will set the financial challenges facing councils against the scope for securing new income, increasing productivity, and becoming more efficient.
In terms of the scope for increasing revenue and efficiency, coupled with the increasing citizen demand and cuts, making a business case for investing in commercial skills and practice through a programme such as this would appear strong: investing in improving commercial capabilities at all levels should secure significant financial savings, justifying effective investment in learning and development, and the investment in new innovative services, whatever a council’s starting commercial maturity.
The challenge is to deliver this in practical ways, especially into a local government culture. A structured approach is needed, building on real experience and evidence from local government. Both strategic and tactical approaches are needed – there is no point in investing in a sophisticated corporate approach to managing risk and commercial activity if the strategic approach isn’t right and vice versa.
Local politicians also need to be involved, especially those involved in transformation programmes, finance, digital planning, scrutiny and overview panels.
Caja is seeking two councils to become partners in jointly developing this programme. Caja will undertake practical on-site and virtual engagement over the internet, working with each pilot council to identify and to help to deliver its core commercial ambition. This includes the support for developing new commercial models and practice, along with building the necessary skills and capacity.
We will use face-to-face and ‘workshop’ activity, balanced by an acute awareness of people’s availability and the option of online learning and remote support where appropriate.
Outline programme (this will vary depending on partner council requirements):
1. Overview session
2. Assessing the as-is and key deliverables:
3.Building a commercial framework for success:
Developing the internal components of the framework will align to the existing organisational development plan for each council, and will include;
4. Implementing the change
Delivering a bespoke programme addressing key issues within timelines – given different levels of maturity in different parts of the council, components may include:
5. Developing the sustainability plan - creating the infrastructure
Alongside a practical delivery methodology, we will agree on an approach to knowledge transfer, and capacity building and sharing – both within a single council and between different funding partners, facilitated by Caja. We will employ various tools, and methods including; action learning sets, LinkedIn group, quarterly reviews/experience sharing/challenge sessions.
6. Evaluation and agreeing on the market offer
Six-month end of engagement evaluation session and report validated by a Caja partner (University Business School). This will include a proposal for taking the programme to market.
Caja is particularly interested in extending the reach of the OD (Organisational Development) programme to include elected members, particularly scrutiny panel members. It would be difficult in our view to change the culture of a council without members being involved and understanding the changes and risks. Moreover, many members will also have significant commercial experience on which to draw and which they can also share.
Caja is a niche boutique consultancy, specialising in business transformation, change management, organisational design & effectiveness and advisory services. We work with organisations in the public, health, higher education and private sectors drawing on our directors’ core expertise and the wealth of experience of our team of associates.
We work with clients who seek knowledge transfer and are building sustainable internal capacity. This is driven by our own public service commitment and observation that too often, change programmes fail because they don’t focus on the knowledge and practical experience of front line staff. In the context of this proposal, ‘transformation’ is often hampered by a poor understanding of the commercial implications around a given programme of change – or in fact isn’t a genuine transformation programme to begin with. The proposal seeks to address these issues in both its content and the collaborative way in which we want to work with partner councils to develop, pilot and evaluate the programme.
Caja expects to develop and pilot a complete development programme which covers all aspects of commercialisation. We would like our partners to share our vision, including our view that everyone in the council should feel part of the journey and be equipped to take a commercial approach where needed. This is not a programme just for professionals in procurement, finance, existing sold services and asset management.
The two local authority partners we are seeking to work with us need to be interested in:
Caja will build the programme with the partner councils with a strong element of knowledge and skills transfer, and with scalability within and between councils. The solution will be sustainable, action-focussed and a learning environment.
There will be costs for both the partners and for Caja, but the two pilot councils will benefit from a significant reduction in costs and will gain in other ways (shaping the programme, learning on the way and being early adopters). We will discuss how the project can be structured and funded with those councils that express an interest in working with us as pilot partners.
Core Costs (per org)
Local Costs (per org)
Costs (per org)
The time scale for the work is still to be determined, but we are currently expecting the following:
|Months 1-3||Overview conversation, strategic workshop and diagnostic and draft development plan|
|Month 4||Commence setting up programme delivery infrastructure, commence engagement process, start of practical inputs|
|Month 5-12||Delivery of agreed programme running alongside an agreed knowledge transfer activity – within councils and with partners|
|Month 6-9/12||Review/experience sharing/challenge session – within council, with partners and with partner university business school|
|Month 12||Evaluation workshop with partner university business school|
|Month 12 +2||Evaluation report produced|
|Month 12 +3||Recruitment roll, product launch, marketing and roll out to next tranche of councils|