Truth about local government podcast with David Crowe

David Crowe – Senior Strategy Director at Local Partnerships met with Matt Masters on his latest episode of ‘The truth about Local Government’ and talked about the creation of the CEO blueprint.

The CEO Blueprint is intended to take council CEOs in England through a need-to-know, structured, risk aware and financially sustainable approach to developing commercial initiatives. The Blueprint covers twelve key considerations, from definition and strategy through to preventing failures and developing exit strategies

In the podcast, David talks about how over recent years councils have increasingly involved themselves in commercial activity.

However, this is an area which can be fraught with risk and challenges as illustrated by the well-publicised examples of a small number of councils who have over-reached themselves and/or invested unwisely. Accordingly, we in Local Partnerships have developed a Chief Executive’s (CEO) Blueprint which is designed to enable CEOs to feel confident they have all the bases covered when it comes to council commerciality. Ultimately it is there to help reduce financial risk and improve value for money for the sectors. 

It is aimed at CEOs of all council types and is structured around the lifecycle of commercial activity focusing on key considerations at each stage in relation to areas such as strategy, leadership, governance, evaluation, capability, risk and performance management. 

Generally, it is likely to be more relevant to new and aspiring CEOs (particularly those without a commercial background) but there should be something here for everyone and for those who are knowledgeable in this space it will hopefully reinforce what they already know. 

Some key pointers for CEOs when leading commercial projects include: 

• Be clear about the objectives of your commercial activity  
• Lead from the top and encourage innovation and facilitate a commercial culture
• Establish a strong governance framework to manage risk and guard against groupthink by inviting external challenge 
• Set up a corporate commercial board to prioritise the best opportunities based on ROI and alignment to objectives and to approve business cases and plans – with progress reported to the board on a regular (quarterly) basis.
• If the required skills do not exist in-house, ensure that the right technical expertise and advice is bought in (and if it is too expensive do to that then don’t proceed) 
• Ensure that financial teams are aware of the guidance regarding borrowing like only borrowing to invest in real estate or other assets provided they meet the permitted criteria, such as that they must be for primarily for economic regeneration purposes and not just for the generation of income
• Mitigate risks through diversification of your portfolio.
• Identify possible exit or alternative strategies if the commercial activity is unsuccessful or there is a change in strategy within the council
• Ensure that the scale and financial value of the council’s investments are proportionate to the size and budget of the authority and reviewed regularly.