South Somerset District Council recognises that we exist in a rapidly changing world and are working in a challenging financial environment, which is forecast to become even more demanding in the coming years. We want to meet these challenges and exceed them, survive and thrive in this environment, become a leading council that is financially self-sufficient and delivers high quality services to its customers and communities.
To do this, it is accepted that we need to change our culture, thinking, and ways of working and embrace and deliver commercialism throughout the Council at every level.
Our Commercial Strategy focuses on outlining our aims and objectives, how we will achieve them and how we will know that we have been successful.
Why do we need a Commercial Strategy?
All public sector organisations currently find themselves in an extremely challenging environment, with mounting financial pressure, reduced resources and greater market competition for services.
South Somerset District Council faces a revenue budget gap which is currently estimated to be £4.7m (MTFP 2017-18). However, we know this is likely to grow over the coming years due to factors beyond our control. The Transformation programme will make us more modern and efficient and is due to be fully implemented by the end of 2018.
Transformation will deliver £2.5m of savings. The remainder of the revenue shortfall must be found through commercialism and income generation if we are to avoid cutting services.
There will inevitably be, uncertainties in future Government funding, business rate retention and increasing demands on costs of services, including housing. These are some of the reasons for the financial shortfall which is anticipated to increase in the future.
South Somerset District Council recognises this ongoing need and the requirement to take a more commercial approach to be self-sufficient financially and ensure that services are not adversely affected, so that we are ‘future-proofed’ and thriving into the future.
How do we achieve Council objectives through our Commercial Strategy?
For South Somerset District Council commercialism means the ability to think and act more business-like when considering the ways we manage, operate, deliver and resource our services and products in order to deliver best value for communities and customers.
Commercialism does not mean just making a profit. It includes:
- Considering the whole life cost of policy decisions, including market impact and benefits realisation.
- Improving efficiency of service delivery – reducing costs and streamlining processes
- Maximising value for money from contractual relationships
- Making robust decisions on a consistent basis with evidence and a sound business case
- Considering new and innovative ways of generating income
- Taking an investment based approach to the use of financial resources including assessing the return from the investment in terms of financial return, delivery of the council’s priorities and added value to our communities
This means making sound and clear decisions in using our resources, investing public funds to become more efficient and generate income for the Council to deliver better services whilst retaining a clear focus on our communities. This will affect different parts of the Council in different ways and to varying degrees, as some services will never be fully commercial.
What is the outcome?
Revenue shortfalls will be met, with the organisation wide income target of £3m per annum income by the end of 2021. Whilst the current target is £4.7m (this includes the forecast savings from the Transformation Programme of £2.5m) the savings gap will grow in the coming years. Therefore, we are forecasting to deliver an estimated £2m from property rationalisation and investment, an additional £0.75m from improved management of our reserves and a further £0.25m from renewable energy and other internal business service improvements. If this target is reached, total combined savings of £5.5m will be made across Transformation and all other areas above.
In summary South Somerset District Council will continue to grow its revenue through commercial, ambitious and innovative investment, development, and cost reduction of its services.
By delivering the Commercial Strategy which aligns with and supports the Council Plan and complements other corporate strategies such as Finance and Information Technology South Somerset District Council will:
- develop into a more cohesive and ambitious, economically efficient organisation
- become a partner of choice for the community and commercial sectors by demonstrating its commercial awareness and effective delivery of services
- be a desirable and respected employer that invests in its staff and attracts the next generation
- become a leader in its field, delivering high quality, efficient, effective and timely services to its communities and customers.