Transformation Strategy 2022 - 2027

In this section

Income and Commercialisation

1. Overall aim

To develop a more commercial approach to the delivery of Council services with a view to increasing the level of income generated.

2. What do we need to transform and why?

One of the key priorities of the TIC programme has been to seek ways of generating more income from fees and charges, and to increase the levels of debt that the Council is able to recover.

Most of the Council’s annual income comes from Welsh Government funding, Council Tax and Business Rates, with the remaining income generated from fees and charges levied by the Council. Many of these charges are set annually as part of the Council’s budget setting process, and some are set nationally or by statute. Charges can be an important source of income and can help improve or sustain services. In many cases, charges are not based on the cost of providing the service and services can therefore be subsidised to varying degrees. Improved information on the relationship between costs and charges would help identify where current subsidies are disproportionate to the level of positive outcomes delivered for individuals or communities.

This is one example where the Council could adopt more of commercial approach to generate more income. However, commercialisation is more than just reviewing fees and charges, but involves looking at the business as a whole and identifying new opportunities to generate income. A number of local authorities are now recognising that an increasing level of commercialisation, and the associated increase in revenue, can provide for a more sustainable approach to dealing with the on-going challenges of shrinking budgets and increasing demands. The Audit Wales study on ‘Commercialisation in Local Government’ (October 2020) identified that ‘local councils are looking at different ways of making savings, safeguarding services, and generating income. Commercialisation is consequently becoming more important for Councils’.

Some Councils have consequently created Commercial Manager roles to provide the capacity and expertise to drive this agenda forward in their respective organisations, recognising the significant return on investment that this role could provide.

The TIC Income workstream has been undertaking work to identify the opportunities to implement a more commercial approach across the organisation and the type of skills and capacity available or will be required to support this. Workshops have been held with key services which will be used to develop a Business Case for the Council to adopt a more commercial approach. Initial work undertaken to date has already identified that there are clear benefits of investing in additional capacity and expertise in this area, as evidenced by the success achieved by the Council’s Leisure Services Division, which has significantly increased its income generation activities over the last 5 years, which in turn has reduced the level of Council subsidy required to deliver these services.

3. Key Objectives

To promote the development of a more commercial culture and approach across the organisation in order to increase the level of income generated by the Council.
To ensure that the Council has sufficient skills and capacity to support this approach.
To ensure that service fees and charges reflect the costs of delivering that service unless a business case dictates otherwise.
To identify potential to generate more income through increasing take-up of services.
To provide clarity on the approach to the application of concessions and subsidies.
To review the Council’s income collection policies to ensure that income is collected by the most efficient means.
To review opportunities to increase income from advertising and sponsorship.
To identify further income generation opportunities through the selling of Council services to other public bodies/private sector whilst ensuring compliance with the relevant legislative framework.
To further strengthen debt recovery processes and ensure that there is sufficient capacity to maximise the levels of debt recovered.

4. What will be our priorities for the coming year and beyond?

Develop a business case report that identifies the Council’s ambitions and further opportunities for commercialisation and the type of capacity and skills required to deliver this agenda by June 2023.
Develop a Commercial Strategy for the organisation by September 2023.
Develop a framework to support the implementation of a cost-recovery approach to the setting of Council fees and charges by April 2023.
Implement a rolling programme of cost-recovery reviews to inform the future setting of fees and charges by April 2024.
Implement a programme which supports the roll out of advertising on Council roundabouts pilot to be completed by March 23 with full roll out by end of 23/24.
Identify other opportunities for increasing income from advertising and sponsorship and ensure that a more coordinated approach is adopted in order to maximise the level of income generated by September 2023.
Develop a framework/guidance to support services in identifying income generation opportunities through the provision/sale of services to other public/private sector by September 2023.
Further strengthen case management arrangements to support the increased recovery of Council debt by April 2023.
Develop key measures to evaluate the outcomes of the Invest to Save Business initiative which allocated additional resources to the debt recovery function by April 2023.

5. How will we measure the impact of the changes?

Increases in income generated.
Increases in amount of debt recovered.