Commercialism within a local authority setting is a strange and often misunderstood beast. It’s a fundamental part of enabling councils to continue to deliver services sustainably going forward – but the mention of the word commercial can arouse suspicion or resistance from citizens and staff alike? But what is it?
For me it’s about creating a business-like approach to service delivery and creating an environment where services are enabled to behave in an agile way to generate income or save money. Money that can be reinvested in developing or protecting services that otherwise wouldn’t be there.
At Birmingham City Council we have been embedding this approach to Commercialism across our organisation and are harnessing the considerable assets and skills across the organisation to increase the contribution generated from services in commercial markets.
We have made a good start, with over £200m commercial income (across diverse areas ranging from advertising to school meals to crematoria), contributing over £30m a year to the delivery of our budget – but we know we have some way to go to achieve our full potential. So how are we going about harnessing this potential:
We’ve established a Commercialism Board, chaired by the cabinet member for commercialism, and attended by three cabinet members and four CLT members – this helps set the direction and ambition for the approach, keeps us on track with delivering the plan and identifies and unblocks barriers in our path.
Commercial discipline and ambition
Developing a profit and loss discipline in commercial business units, a ‘can do’ culture of business ambition and a drive to succeed and a commercial approach to investment decisions.
Recognising our strengths
As a local authority we have a number of strengths which we are seeking to maximise, for example:
• Established services – such as Cityserve, providing school meals to 70,000 children a day and with a revitalised and unique children centred approach and effective cost management has turned from a loss of £0.6m to a surplus of £2.5m and a string of national awards
• Physical assets – such as our world class parks, where we have developed a range of concessions, events and reviewed charges to increase income by over £0.5m (and rising) and improve the facilities on offer
• Access to capital – enabling the creation of a property investment company and more proactive management of our commercial estate to maximise return from our £30m income
• Influence and Relationships – utilising our unique relationships with a range of partners, including developing a commercial events company with The Birmingham Repertory Theatre to double our commercial return from events at the Library of Birmingham
Realising our future potential
Key to us fully realising our potential is the successful implementation of a Commercial Hub, which will harness the best commercial skills from across the organisation – service delivery and support services alike. This will not only ensure that our commercial services are benefitting from the best possible support – but also contribute to an environment of agility and success.
All of this will help us to achieve our goal of being able to maintain, sustain and invest in the services our citizens rely on us as a council to deliver.
Ken Lyon is the head of commercialism at Birmingham City Council. If you would like to know more about identifying commercial opportunities, Ken will be speaking about ‘Driving Value for Money’ at the Public Sector Show on 26th June, at ExCel London.