Is there such a thing as good commercial investment in local government anymore?

Of course there is, the sector has delivered plenty of brilliant examples over the years, and there is no reason, all things being equal, why it should not continue to do so. However, all things are no longer equal, or are far less equal than they used to be and is one of the reasons why a cloud has enveloped this activity.

Last year, we did a comprehensive engagement exercise with council statutory officers across the country on the topic of commercial investment as part of a piece of work for DLUHC. It was striking how much uncertainty existed about what councils could now get involved in with some believing that ‘rule’ changes meant they effectively were no longer permitted to engage in commercial investment.

Although ‘rules’ have been strengthened, what has never changed, is the reasons why councils have the freedoms to undertake commercial investment and that is to help, for example, regenerate failing places, renew infrastructure and support the economic development of their area. This does come with risk, and unfortunately the risks are more acute for the places that have become less equal than others and need the investment the most.

Without wishing to dance on a pinhead around the definition of ‘commercial’, perhaps extending the label to commercially-sound investment would give more confidence. Within that, being able to demonstrate a robust appreciation of the risks would be a minimum expectation.

As has always been the case, proposed investment activity should be set out in a capital strategy that aligns with the stated priorities and objectives of the council. It must be clear how the investments will be financed and how that finance will be repaid and the source and scale of benefits must also be set out along with the approach to benefit realisation.

If you would like to speak to us about your capital strategy, investment programmes, business case support or delivery assurance, please get in touch.