Agenda item

Resolved: that the Committee’s views be referred to Mayor and Cabinet as follows:

·         The Committee welcomes the 'Income Generation Opportunities Review' report by the commercialisation specialist appointed by the Council. Mayor and Cabinet are asked to consider closely the contents of the report.

·         The Committee recognises the requirement for a clear commercial strategy. It also endorses the specialist's comments about the need for cultural change.

·         The Committee believes that there is a need for focused leadership and accountability in this area. It welcomes proposals put forward by the Cabinet Member for resources to develop a timetable for delivery of activity. The Committee will consider a further update on income generation and commercialisation at its meeting in March 2017.

4.1    Selwyn Thompson (Head of Financial Services) introduced the report; the following key points were noted:

·         The report was presented in two parts: firstly, there was a section on income generation activities across the Council, which included an update on progress to implement the recommendations from the Committee's income generation review. Secondly, a there was an update on the consultant's report about the Council's approach to income generation.

·         Updates on advertising income; business intelligence; wireless concessions and fees and charges were provided in the report. Work was also taking place to deliver better deals as part of private finance initiative (PFI) arrangements and Council borrowing.

4.2    Selwyn Thompson (Head of Financial Services), David Austin (Head of Corporate Resources) and Jack Fowler (Project Accountant) responded to questions from the Committee; the following key points were noted:

·         There had been a full audit of sites with the potential to deliver advertising income. The nature of the long-term agreements that were required to make income generation from advertising sites viable meant that the number of sites was limited.

·         The wireless connections project would not produce as much revenue as had been anticipated.

·         Reports from other boroughs on the income from their wireless concessions suggested that the anticipated levels of income had not been realised.

·         There was an inherent level of risk involved in income generating activities.

·         Projected levels of revenue from income generating projects should be viewed with caution because of the level of uncertainty involved. 

·         The consultant’s report highlighted that there was a lack of ‘commercial ethos’ amongst officers. It was recognised that there were differences in the way that senior officers understood and applied ideas about income generation and commercial activities.

·         There was no reason that Lewisham should be behind other authorities in terms of its income generating activities.

·         The Council commissioned and managed a number of major contracts. Income generation also had to focus on commissioning and spending wisely.

·         Income generation from traded activities with schools was led by officers in the Children and Young People directorate. Decisions about levels of charging were made in consultation with the schools' forum.

·         The Council's levels of fees and charges were regularly reviewed but there were no targets set for generating income.

·         Raising charges for services above inflation might be problematic, depending on the statutory and policy considerations related to the delivery of that service.

·         Where the Council applied for grants or funding to deliver services, if was most often a requirement of the funding process to ensure that adequate staffing and resources were in place to spend the funding and to guarantee the delivery of the service.

·         Most of Council's work was related to meeting the needs of vulnerable people. This did not lend itself easily to creation of markets or the stimulation of demand to increase income.

·         The Council could not profit from the delivery of core services. Any profit making activity had to be delivered through a commercial vehicle.

·         Many local authorities were looking at ways to sell their services to others. Lewisham had retained the refuse service 'in house' whereas many other authorities had commissioned these services out to private providers, which might enable the Council to provide this service commercially.

·         There were some lessons to be learnt from the failed commercialisation model in Shropshire. Particularly, that strong governance arrangements needed to be in place as well as a full understanding of costs and overheads before embarking on this type of initiative.

·         The Council had made a decision not to introduce performance related pay.

4.3    Councillor Kevin Bonavia (Cabinet Member for Resources) addressed the Committee, the following key points were noted:

·         He was considering the Committee's comments on the consultant’s report and would work with officers to produce a timeline of activity, and the resources available, to deliver the next stages of this work.

·         In recent years, the Council had been under a substantial level of pressure just to maintain the delivery of day to day services.

·         Income generation was a priority, but it was difficult because of the culture of the Council. This applied to both officers and Members.

·         Progress was being made in changing the Council's culture but this was not as quick as Members might like.

·         There was no 'template for income generation' to follow that had been provided by other authorities. Lewisham had to decide on its own approach and to have its own vision.

Resolved: that the Committee’s views be referred to Mayor and Cabinet as follows:

·         The Committee welcomes the 'Income Generation Opportunities Review' report by the commercialisation specialist appointed by the Council. Mayor and Cabinet are asked to consider closely the contents of the report.

·         The Committee recognises the requirement for a clear commercial strategy. It also endorses the specialist's comments about the need for cultural change.

·         The Committee believes that there is a need for focused leadership and accountability in this area. It welcomes proposals put forward by the Cabinet Member for resources to develop a timetable for delivery of activity. The Committee will consider a further update on income generation and commercialisation at its meeting in March 2017.