The agenda was varied in order to take this item first.
7.1 Katherine Nidd (Strategic Procurement and Commercial Services Manager) introduced the report. The following key points were noted:
· The paper included an update on key pieces of work to date. The Committee's thoughts were also sought on the income generation strategy.
· The three year strategy was designed to build good quality sustainable practices into Council ways of working. The development of good practice would provide a solid foundation for more entrepreneurial ways of working.
· The strategy was also designed to establish quality systems and processes and it was supported by an updated charging policy. A new fees and charges report was also in development which would detail the comprehensive review that was being carried out across the Council.
· Further work would take place to develop the Council approach to introducing a commercial and entrepreneurial culture.
· The Council's approach to income generation and commercialisation would only be sustainable if the Council also sought to develop an entrepreneurial culture, in order to support officers to give full consideration to the costs of delivering services and opportunities for commercialisation as well as a robust and consistent framework for developing, assessing and evaluating new income initiatives.
7.2 Katherine Nidd responded to questions from the Committee, the following key points were noted:
· Lots of the Council's services were statutory and the level of charging was therefore set nationally and could not be altered locally. A number of others were discretionary fees and charges which could only be charged for to fully recover costs. The areas with the most opportunities for income generation were those areas in which services could be traded as commercial activities. As long as there was sufficient demand for commercial services and the market would accept the price then the Council could gain income.
· The Association of Public Service Excellence (APSE) had been carrying out an income generation review in the environmental services division. The approach taken and the lessons learned from the review could be used in other areas of the Council.
· The schools service level agreement had been closely reviewed in recent years and officers had developed a more commercial mindset about how to develop and market services for schools. More work was being carried out to maximise the benefits of this work and to ensure that full cost models had been developed for each service traded.
· The income generation strategy had been developed to ensure that ownership for activity was distributed to services across the Council, but that oversight and governance was held more centrally.
· There would be named individuals responsible for activities in the fees and charges review.
· Consideration was being given to the future resourcing of the corporate support for strategic procurement and commercial services work. The roles of the officers working in this area might have to change as the work become more embedded across the Council.
· The Council joined the CIPFA benchmarking club in October. Figures provided in the report were from last year (before Lewisham was a member) in future the figures would include Lewisham and these would be reported to the Committee.
· Just having benchmarking figures did not necessarily provide good information because the ways in which Councils provided information varied. There were also considerable regional variations.
· Processes had been put in place to consistently review proposals for future income generation and commercialisation projects, these formed part of the strategy.
· The income generation board had cross directorate representation, which ensured coordination of activities across the Council.
· All of the proposals brought forward would first consider the statutory framework for the delivery of services as well as the potential customer base for any service and the Council's other policies and wider strategies.
· There was a short form business case process for smaller scale projects and initiatives. The income generation board process was also adaptable (as required), even though the board was the single route via which new projects would initially be assessed.
· There were not income generation targets for fees and charges but work was taking place to review how services might increase their customer base.
· For new ideas, the business case process would ensure that testing would be carried out in order to assess what potential there was to gain income.
· The Council's renewed focus on insourcing might provide opportunities for sharing services with other public bodies.
7.3 In the Committee's discussions the following key points were also noted:
· Members were concerned about the cyclical nature of the work on income generation and commercialisation at the Council and were worried that the current enthusiasm and effort for work at the Council might be lost should there be a change of staffing arrangements.
· The Committee highlighted the need for meaningful income targets.
· Members noted the perception in Lewisham's communities about charges for services in addition to the cost (and burden) of Council tax.
7.4 David Austin (Head of Corporate Resources) addressed the Committee, the following key points were noted:
· It was proposed that future growth of £200k be made available to fund strategic procurement and commercial services work. This was dependent on the outcome of the pilot (of which the delivery of the income generation strategy was one part).
· Whilst there were risks and caveats - it should be noted that -of the cuts recently agreed, 25% were income generation proposals for next year and for the following years proposals the figure was 35%.
7.5 Councillor Krupski (Vice Chair of the Committee) introduced a briefing (attached to the minutes) about recent events and sessions she had attended on income generation and commercialisation. The following key points were noted:
· She welcomed the opportunity to explore this issue on the Committee's behalf.
· The briefing provided a summary of some of the activities taking place to develop municipal entrepreneurialism.
· The central aim of the municipal entrepreneurialism approach was to create a robust local economy in order to keep people working in the locality, to target council spending and to ultimately reduce the reliance on services.
· Councils were trying to maximise the amount of money they were making whilst ensuring the best quality services for local people.
· Birmingham was a particularly strong authority in this area.
· There had to be through understanding of the risks and benefits of all projects. Lewisham was currently quite risk averse. The Council should accept that some projects might fail. With sufficient numbers of projects, the net effect would be positive.
· Staff could not be expected to carry out their day jobs and deliver new income generation projects at the same time.
· There should be a Cabinet Member responsible for income generation and an officer accountable for corporate support.
· Council processes should not be overly bureaucratic.
· Decisions should be made early on about how additional income from projects should be re-invested.
· A culture of challenge should be engendered across the Council.
· The Council should decide on its 'red lines' politically before it started projects.
· 'Quick wins' and early successes could help to bolster a culture of change.
· There should be sharing of best practice with other public authorities.
7.6 The Committee discussed the update from Cllr Krupski, the following key points were noted:
· The cautious mindset that was prevalent at the Council should change.
· The Council should be strengthening local businesses to thrive.
· The Council should continue to support the development of business hubs.
· There was concern about the perception of failure at the Council and the importance of protecting public spending.
· There were limited opportunities for charging in the areas of children's and adults social care spending, which were the largest areas of Council spending.
· Ideas that were successful in different areas of the country were not necessarily applicable in Lewisham.
· Further consideration would be given to future invitations to address the Committee about income generation (potential options included Association of Public Service Excellence and representatives of Birmingham City Council).
7.7 Resolved: The Committee agreed to share its views with Mayor and Cabinet, as follows-
· The Committee welcomes officers' report on income generation and is pleased with the comprehensiveness of the new income generation strategy. The Committee endorses the new strategy and recommends that it is agreed by Mayor and Cabinet.
· Pending a decision by Mayor and Cabinet on the income generation strategy and the new fees and charges framework, the Committee looks forward to a future report on fees and charges in due course (a provisional update has been included on the Committee's work plan for March 2019).
· The Committee anticipates progress on cultural change at the Council to stimulate commercial thinking and to bolster entrepreneurial activity. It is eager that this change permeates throughout all of the Councils directorates, divisions and services.
· The Committee believes that the Council should retain corporate support for procurement and commercial services in order to coordinate and support this work.
· The Committee asks that, in a years’ time, officers return with a comprehensive review of the first year of the strategy and that this includes an assessment of the areas that have been considered and potential future income targets.
· The Committee endorses the work carried out by its Vice-Chair and it has attached the briefing she has provided to its referral.