Agenda item

Purpose: To report to the Commission the Board's activities and achievements, what revenue has been achieved and how this has been tracked.

Andy Sharp introduced the report that sought to respond to the request from the Overview and Scrutiny Management Commission for an update in respect of the Commercial Board and its work programme. He outlined that the purpose of the report was to:

• Provide an overview of the history of the Board; and

·         Provide an overview of the work programme for 2021/22.

He indicated that the focus of the Board had changed in recent months and was now on the following:

• To identify and lead strategically significant commercialisation programmes;
• To provide guidance and support to cross-organisational commercialisation projects; and

·         To take oversight of the traded services arrangements within the organisation, largely through the Education Service.

He reported that the project identified for further consideration through the Lions’ Lair process (which encouraged staff to identify potential commercial opportunities), related to the potential development of a crematorium within West Berkshire. An initial business case outlining a proposal for the development had been considered and approved by the Board, and a consultant would be appointed to help develop a detailed business case. He indicated that the Board would also be supporting the Housing Service with the development of a new housing company. In addition, he noted that the Board had commissioned an organisation called “Keystone” to deliver commercial skills training to Council staff, targeting those who already lead traded services and those who lead services that could be delivered in a more commercial way. 

He reported that the Board had created a Steering Group for Traded Services, which was reviewing all of the Council’s traded services within the Education portfolio to identify opportunities to increase income, whilst also providing better support to the schools that the Council already works with.

Councillor Jeff Brooks indicated that he wanted to see more detail in the report on traded services in Education. He noted that he would have liked to have seen the scale and scope of these services, i.e. services provided, clients, competitors and market analysis. He indicated that the report had missed the opportunity to set goals and identify actions to help the Council be more competitive. He also asked if there was a need for another crematorium in West Berkshire, since he thought that the existing facility was coping with demand.

The Chairman asked Andy Sharp if more detail and data could be provided. Andy Sharp noted that the purpose of this report was to give an overview of the work of the Commercial Board. He offered to bring a more detailed report on traded services in Education to a future meeting, including: details of the current offer, level of income, and how this has changed over time.

The Chairman asked for a short report, which listed the services with their revenues and any profits / losses.

Councillor Brooks also suggested that this also should include sales targets.

Councillor Tom Marino asked what services were traded and reiterated the need for financial information. Andy Sharp confirmed that these were mostly support services, ie. HR, ICT, finance and school improvement. He confirmed that any surpluses from traded services were put back into Council services.

Action: Andy Sharp to bring a follow-up paper on commercial services to OSMC in April.

Andy Sharp, noted that the crematorium proposal was for a sustainable facility using renewable energy. The outline business case identified a potential market, but a more detailed business case was needed to identify whether it could be operated profitably. This would require specialist consultancy support.

Councillor James Cole noted that Housing would be an important aspect of the Board’s activities and asked if other Executive Portfolio Holders would be brought in. He also asked if the crematorium proposal was the only thing to come out of the ‘Lions Lair’. Andy Sharp explained that the purpose of the Board was to offer advice, guidance and support to projects/programmes with a commercial emphasis rather than taking on their governance. He indicated that the Housing Board would oversee the new housing company. He highlighted the ‘Routeguard’ project on safe walking routes to schools as another successful Lions’ Lair project. He explained that most projects identified were either not considered viable or had insufficient income potential.

Councillor Cole asked if there were plans to repeat the Lions’ Lair. Andy Sharp indicated that a proposal was going to the Board that week around generating ideas from staff about doing things differently, including commercial ventures.

Councillor Tony Vickers asked about the Lions’ Lair process and suggested that involving staff in generating commercial ideas should be an ongoing initiative. He suggested that a SWOT analysis was needed to respond to developments in national education policy. 

Councillor Garth Simpson indicated that death rates were steady and fairly predictable outside of the pandemic, and suggested that the crematorium market was well-covered. He did not consider that a sustainable crematorium was an easily sellable proposition if the electricity was cheaper than that used by the current facility. He highlighted concerns about the ownership and financing of existing crematoria across the UK.

Andy Sharp noted that researching the market in more detail was the main reason for the second phase of the business case.

Councillor Simpson questioned the aims identified in the report, particularly in relation to having a swathe of commercial activities. He suggested that the next two years would be challenging as the district recovered from Covid, and this would consume officers’ time.

Councillor Gareth Hurley sought clarification about the problem statement and strategic objective for the crematorium project. He indicated that he would be interested in seeing the outline business case and initial land search.

Councillor Lee Dillon echoed other Members’ calls for additional data. He asked for more detail on projected vs achieved income targets. He suggested that where a budget pressure was identified, an income target may be set, which could become the focus rather than service delivery. He asked where the balance should be in terms of income generation vs service delivery. He also asked how much commercial expertise was on the Commercial Board, and whether a specialist person could be brought in to work with the Council for a limited period. Finally, in relation to Education, he asked how much the commercialisation was underpinning the Education team, and if more academies were to deliver services in-house, what that would mean for core services to LEA schools.

Andy Sharp noted that there were colleagues on the board with commercial expertise and that external support was utilised as and when required. He acknowledged that there were tipping points in terms of the operating surplus of the Education Service, which could be incorporated into a future report.

Councillor Ross Mackinnon noted that the sustainable nature of the crematorium didn’t just relate to energy usage, but there were also other environmental aspects. He noted that the commercial business case was in the early stages and it was too early to rule it out completely. He indicated that neighbouring local authorities generated significant levels of income by running their own crematoria. He agreed with Councillor Dillon’s point about focusing on provision of efficient services, but where there were opportunities for commercial income, these were worth exploring.

Councillor Steve Masters agreed with Councillor Mackinnon that there were other sustainability issues relating to crematoria. He also agreed with Councillor Simpson about the challenging period of post-Covid recovery and suggested that the Board should not put too much pressure on officers to be commercial. 

The Chairman concluded by asking for additional information on traded services. He echoed the concerns about the crematorium and indicated that one crematorium served the whole of Northern Ireland, but there was one in Thatcham and others in neighbouring local authorities. He also suggested that there could be additional services that could be traded. 

Resolved that the report be noted and that a further report be brought to OSMC to provide more in-depth analysis on the Council’s commercial activities.