by Richard Steel

How local government can trade services

Jul 29, 20082 mins
IT Strategy

I spent most of today in a Newham Council “Trading Workshop”. A number of Council services have been developing projects or plans to exploit their skills or assets in trading commercially for greater efficiency, to support regeneration, and to bring down costs to the Community.

In the last few years legislation affecting Local Government powers to trade has been liberalised – and it’s understood that there’s disappointment in Government bodies such as the DCLG (Department for Communities & Local Government) that Councils generally haven’t exploited opportunities that may have opened-up.

Jaimin Patel, Newham’s Language Shop Manager, organised today’s proceedings, and Helen Sidwell, our Head of Legal Services, chaired, following an introduction by Bob Heaton, Executive Director of Resources, The Language Shop was used as a Case Study to develop the approach to options appraisal, market analysis, forms of venture etc.

Legal advisers from Trowers & Hamlins were on-hand, and took us through the relevant legislation and considerations around trading vehicles, governance and structure. Among these was whether Newham should establish a Holding Company, within which separate business subsidiaries would reside, or whether independent companies for our (quite diverse) prospective businesses should be formed.

Following lunch, four other prospective ventures gave overviews of their propositions. These included the Newham Telecommunications Convergence project, with its proposal to establish a trading vehicle for the exploitation of its network assets.

The most fully developed proposal was from Newco – Newham’s supported business and manufacturer of windows, doors & kitchens, 50 percent of whose employees have disabilities. This was originally established in 1922, since when it has been trading in its various ventures, but subject to Local Authority trading constraints. Another “pitch” was from Pest Control.

Following the workshop, actions were agreed with a view to taking a report and recommendations to Newham’s Executive Board in September.

For me, much of the ground we covered had become familiar territory because of the work we have been undertaking in turning around Socitm’s business and membership organisation. Nevertheless it was an interesting and constructive use of our time that I expect to facilitate the completion and execution of our various business plans.