Agenda item

The Chair welcomed Ajay Sethi, Head of Service Commercialisation to present an update outlining the activities to support the county council in creating the right environment for it to be more commercial.

Over the years Lancashire County Council has continued to look at ways to achieve savings, to look at commercially innovative ways to deliver services, and to capitalise on its traded services to help deliver services that cannot generate income.

The term commercialisation and income generation are open to interpretation and the county council did not have a clear position on this. On 6 August 2020, Cabinet approved the county council's Commercial Blueprint.

Members thanked Ajay for his presentation.

Comments and queries were raised by the committee and members of the
Budget Scrutiny Review Panel (in accordance with Procedural Standing Order D13(1)) as follows:

·  The School Catering Service was provided as an example of a successful commercialisation project, as a significant employer in over 500 schools across Lancashire with staff employed on the
Foundation Living Wage. 70-75% of the service's supplies were sourced locally, which demonstrated support for the local economy and cut the need for long-distance travel. The service was recognised nationally as Local Authority Caterer of the Year.

·  Members raised concerns that residents could perceive councils to be competing with local businesses. It was noted that this factor had been built into the business planning process and strategic case. Officers were mindful of the county council's reach and impact during decision-making.

·  The Commercial Blueprint acknowledged that portfolio management was included in the Treasury Management Strategy. Nonetheless, the draft Application of Fees and Charges Policy would be relevant to the county council's estates and asset management.

·  A key measure of success over the next five years would be that officers within each service were equipped with the skills, support, and resources to understand commercialisation and allow them to adopt a commercial practice. Another key target was to recognise and maximise opportunities for income generation, with a consistent approach across the county council.

·  The committee queried how tensions between different services and their desired outcomes would be approached. It was explained that a number of factors would be considered, including meeting residents' needs, supporting the county council's ambition, and utilising the authority's assets to both cover costs and ensure social value.

·  It was noted that the draft Application of Fees and Charges Policy placed responsibility on heads of service and senior managers. Commercial champions across the county council would be consulted to identify the additional resources and support needed to implement the policy in their service areas.

·  It was acknowledged that the level of funding received from central government had reduced and may continue to do so. Therefore, a mechanism had been created to cover the cost of the county council's activity and offsets costs from rising demand in other areas. This would protect the authority's statutory functions, whilst allowing creativity and efficiency and not solely rely on central funding.

·  It was clarified that, if a third-party contractor was deployed to deliver a function or service, there was a clear and consistent expectation across the
county council (set out in the draft Fees and Charges Policy and service level agreements, for example) that customer experience and satisfaction would be as important as delivery.

The Chair thanked Ajay for his presentation and answering the questions from the committee.

Resolved: That the report on commercialisation, in particular the differing aspects of the commercial programme and the draft Application of Fees and Charges Policy, be noted.