Paul O'Brien - Chief Executive

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Expanding your competitive edge

by Paul O'Brien Thursday 20 October 2011

Now that we are over halfway through the financial year, more and more councils are revisiting plans they have made to generate efficiency savings to see if they will stack up and achieve their desired outcome for this year and beyond.

At APSE, we have noticed an upsurge in enquiries about how you make remaining services more commercially viable by either reducing costs or generating additional revenue to offset budget cuts. This suggests that councils are concerned they may fail to meet existing targets and are attempting a ‘take two’.

With outsourcing too lengthy a process to deal with the immediacy of the financial pressures, many are looking at internal resources to see how they can make what they have go further or how they can generate a return from existing services.

The Audit Commission study ‘Positively Charged’, back in 2008, identified that local authorities in England and Wales generated over £11b in charges per annum. I must stress that nobody is suggesting we should try to soak the public for further revenue in the current economy. However, senior officers are recognising that some of the services they currently provide and assets used could raise revenue from the wider public sector and beyond.

Some of the thinking behind this is driven by the Open Public Services approach and there are those who add two and two together and come up with putting services at arm’s length to ‘free’ them to compete in wider markets. But decision-makers should remember that much of the perceived opportunities of this approach can be achieved with existing in-house services. And you certainly don’t need to mould services into a new type of model to pursue alternative work streams.

Local government already has many existing powers that allow it to provide services for other organisations. When you add the powers to charge for cost recovery and to trade for profit contained within the 2003 Local Government Act, you have quite a range of options available.

Some may decide to go for it and trade for profit on a larger scale, although I suspect the vast majority will test their competitiveness by expanding their charged-for services and perhaps trading commercially on a small scale at the outset.

As budgets continue to fall and corporate directors scan the horizon for opportunities to balance the books, I suspect many more will turn to developing income generation strategies for their authorities.

Managing parks and open spaces in the age of austerity

by Paul O'Brien Thursday 02 June 2011

Took part in Guardian online debate today on managing parks and green spaces despite the budget cuts and with over 100 posts in two hours it was a lively debate.

I pushed the APSE line about whilst we disagree with the cuts we recognise that they are happening and therefore we need to find ways to stop services from imploding. The only response is to seek efficiency, generate additional income and innovate.

In terms of efficiency APSE's Performance Networks benchmarking data tells us that 56% of parks and grounds maintenance costs are staff, 16.5% are premises, 12.5% are vehicles, with the rest made up of equipment and materials, sub contractors, administration and central establishment charges.

Some of the answers therefore need to be found in staffing costs and that is why many local authorities have or are moving to more integrated streeetscene models where services merge together to reduce management costs. They are also looking at job redesign from the ground upwards to streamline processes and cut out waste and bureaucracy. This will increase productivity further and by utilising seasonal staff and volunteers, reduce the numbers of full time staff. This is not something I am happy about but service budgets will now only go so far.

Other areas to focus on to improve efficiency are better vehicle utilisation and better absence management.

In terms of income generation whilst many parks and open spaces people have raised revenue through events over the years the data I have seen suggest that this is not consistent across the board. There is a need for an even more commercial mindset in these tough times, that doesn't mean charging people who can't afford the cost but being more entrepreneurial in attracting new revenue streams.

This can come from providing catering for the many millions who visit parks or sponsorship from private companies of bins and shrub beds. Some provide specialist services to other public and private sector bodies. One authority in Scotland generated tens of thousands of pounds by getting its arboricultural squad to undertake tree inspections for private companies and some pruning activity. Others sell off surplus nursery plants. One English authority has received significant funding from the local health authority for organising outdoor health walks and putting some outdoor gyms in its parks and open spaces.

In terms of innovation a number of opportunities exist around renewable energy. The feed in tariffs for solar PV mean that revenue can be generated by fixing panels to south facing roofs of facilities. This can make these facilities self sustaining in terms of energy and helps with carbon reduction commitments. Similarly biomass boilers can heat premises and the fuel for these can be grown on rough land surrounding facilities, the new renewable heat incentive will also provide funding for this.

Other authorities already recycle water they use in ponds through drainage systems and reuse leaf fall and other parks waste as fuel.

The issue of trusts was raised as a potential answer to the parks funding crisis, however I think you need to start by asking what advantages can be achieved by this route and ask what you may lose.

It would be difficult to establish a trust without going through some form of procurement process and these normally take a number of years to achieve - my view is the cuts are more immediate than this.

Unlike Leisure there is only a very limited NNDR or VAT advantage with a trust for parks, therefore there is no significant financial savings.

In terms of trusts ability to attract new investment I have not seen examples that cannot equally be achieved by local authorities directly. On this point of funding I am aware of a number of examples where local authorities have used their specialist resources to make successful heritage and lottery fund bids and I wonder if this would be diminished by externalising services.

Overall a useful debate was had but if parks and open spaces are to survive the age of austerity then it will be done by sweating out efficiency, generating new income streams to offset budget drops and by seeking new forms of innovation.

Innovation and Income Generation

by Paul O'Brien Friday 08 April 2011

Chaired APSE's Innovation forum at Elland Road Stadium, Leeds today on income generation opportunities for local authorities.

With over 80 attending I new it was a highly topical issue and the level of interest shown on the day didn't disappoint.

Judith Barnes from Eversheds set the scene with an overview of the law in this area. APSE's Andy Mudd talked through some of the potential approaches that authorities could take in this area.

Nick Cox of Solutions SK spoke about the success of Stockports wholly owned arms length trading company, whilst Owen Jenkins from South Gloucestershire spoke about some of the initiatives they are pursuing to raise income and Paul Wright from Halton spoke of the Council's joint work with the local health authority, which has generated additional funding for playparks. 

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