A commentary on local authority commercialisation strategies

• Author: Peter Jones,Daphne Comfort
• Published date: 01 February 2019
• DOI: http://doi.org/10.1002/pa.1885
• Date: 01 February 2019

COMMENTARY

A commentary on local authority commercialisation strategies

Peter Jones |Daphne Comfort

Business School, University of

Gloucestershire, Cheltenham, UK

Correspondence

Peter Jones, Business School, University of

Gloucestershire, Cheltenham GL50 2RH, UK.

Email: pjones@glos.ac.uk

As growing numbers of local authorities in England are facing up to funding chal-

lenges, many of them are looking to commercialising services to increase revenue

and to balance their budgets. This commentary paper outlines the characteristics of

commercialisation and the drivers for it, reviews the commercial strategies being

introduced by a number of local authorities, and offers some general reflections on

commercialisation within local government. Although local authorities have created

their own individual commercialisation strategies, a number of general themes can

be identified within these strategies. These common themes include the drivers for

commercialisation; the vision, aims, and objectives of commercialisation strategies;

delivery plans and priorities; measurement; and risk management. In reflecting on

local authority commercialisation strategies, the authors highlight the importance of

developing both a communications plan and new skills and knowledge bases for

employees, and they link their findings to the privatisation of public sector services

and to neoliberal models of local service provision.

1|INTRODUCTION

Within England, “Devolution Deals,”many of which cover a number of

large metropolitan areas, offer new opportunities to fund public ser-

vices and local government (Sandford, 2018). However, this devolu-

tion process is taking place at the same time as growing numbers of

local authorities are facing up to funding challenges and are having

to look to commercialising services to increase revenue and to balance

their budgets. Civica (2016), for example, the services and outsourcing

company, claimed that “commercialisation is going to be one of the

most important priorities for local authorities over the next decade.”

In a similar vein, Carr (2015), writing for Localis, the neoliberal not‐

for‐profit think tank, suggested that “one of the key ways”local gov-

ernment can secure its finances is to allow “councils to earn their

own way by acting more commercially where they can.”In its “guide

to public sector commercialisation,”the law firm Browne Jacobson

(2017) suggested a wide range of services “which may be suitable

for commercialisation including financial services, property, care

homes, school meals and building and consultancy services.”More

generally, Brown, Ryan, and Parker (2000) argued “there is an interna-

tional trend to contestability and marketisation in the delivery of pub-

lic services. The underlying foundation of these trends is that

competition results in improved outcomes such as greater efficiency,

higher quality of service, a clearer focus on customers and better value

for money.”With these thoughts in mind, this commentary paper out-

lines the characteristics of commercialisation and the drivers for it,

reviews the commercial strategies being introduced by a number of

local authorities, and offers some general reflections on

commercialisation within local government.

2|LOCAL AUTHORITIES AND

COMMERCIALISATION

For almost a decade, as the U.K. government has reduced funding to

local government, so local authorities have come under increasing

financial pressure. Rob Whiteman, Chief Executive of the Chartered

Institute of Public Finance and Accountancy, suggested “local govern-

ment is facing a perfect storm”in that “the combination of austerity‐in

the form of falling government grant –and rising demand, in particular

from ageing local populations, is bringing to the fore questions about

the long‐term viability of the services councils provide”(Carr, 2015).

More specifically, the National Audit Office (2018) reported that “gov-

ernment funding for local authorities has fallen by an estimated 49.1%

in real terms from 2010‐2011 to 2017‐2018,”and that “alongside

reductions in funding, local authorities have had to deal with growth

in demand for key services, as well as absorbing other cost pressures.”

At the same time, the National Audit Office (2018) suggested that

Received: 5 October 2018 Accepted: 5 October 2018

DOI: 10.1002/pa.1885

J Public Affairs. 2019;19:e1885.

https://doi.org/10.1002/pa.1885

© 2018 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/pa 1of6