Show Me The Money

Published: 15 February 2016

I was recently with a client who was talking about how the local government landscape is changing so fundamentally in relation to funding that many of the previous models of service delivery needed to be ripped up. The interesting point for me was that rather than being full of gloom, she felt that local authorities and other public sector organisations now have far greater opportunities in terms of designing their services and the models and mechanisms by which to pay for them. She was excited by the prospect of being able to think and act more commercially, and in an arguably less risk adverse way than before. 

She did however have two major concerns. The first was around supporting elected members to make some difficult decisions; to agree and implement new and more commercially orientated income generation models. Many of which mean leveraging, investing in or using assets in ways very different to what they have been used to, and also with greater degrees of risk. Her other concern, echoed by others that we have been working with recently, was how to find staff with the skills and experience to initiate and deliver these new types of services and income generation models.

“The first question I will ask them” she said “is how much money they made for their last organisation”.  To me that statement alone shows how dramatically the public sector and local government world has changed recently, as in the past the question would have been “how much money have you saved?”.

This shift towards a significant focus on income generation and new revenue streams brings with it a shift in attitude and skills required by local authorities.

This is particularly the case when it comes to those areas related to Place and Economic growth. A good number of authorities  are realising that increasing the quantity and quality of housing in their regions, then developing it and renting it themselves they can create significant income streams with the additional benefit of regeneration and creating sustainable communities. Others are looking at directly purchasing retail sites, office schemes or development sites that may kick start regeneration in their locality and bring with it additional business rates.

In order to successfully design, implement and manage these initiatives  commercial and business development skills are required that are not traditionally prevalent in the public sector.  Therefore local authorities and arms-length organisations are increasingly looking to the private sector to find the skills they require. It has always been hard to secure private sector talent for public bodies, particularly in areas such as housing and physical development, which are booming and where private sector salaries and bonuses are significantly in excess of what councils or arms-length bodies can pay.  Where the public sector often has an edge, and in my opinion something that councils should leverage as often as possible, is not only the scale and breadth of challenges that a senior executive in this space can expect, but the levers of change and influence that they will be responsible for. Senior posts within Place play a direct role in how a city,  region or place works and how the social, political and economic factors of a location interact. This complex task of stitching together different sectors and influences to reach a positive conclusion provides experience that can be utilised in any role across all sectors.

Senior executives in Place also get the opportunity to see programmes through the whole lifecycle. From conception, to building the narrative around the location’s competitive advantage, leading and negotiating complex commercial deals, overseeing the project management of multi-skilled teams and then delivering the successful conclusion. Private sector partners on such programmes often just get to see elements of this complex process.

Leading our own Place practice, which straddles public and private sector appointments I meet candidates from both sectors on a weekly basis. What I always find interesting is speaking to those who have made the move from the public sector into the private, and now looking to move back again. The most common reason for wishing to move back is both the variety of schemes they feel they will work on, and also the chance to see complex programmes through from start to finish.

In an age when very few people now have a “job for life” it is right to expect that some of those making the move from private to public may well do so to increase their future career prospects  back in the private sector and it is right to expect that they may return. For those operating at the public private interface the opportunity to gain insight into the public sector is often invaluable. Some, if not the majority, will choose to stay and further develop their careers in the public sector.  The key in either scenario is to ensure that the skills and experience they have is imparted to those they work with to develop the knowledge within the  wider team related to securing or finding new and sustainable income streams to grow their local economies in the future.

Marek Dobrowolski is a Principal Consultant in the Public Sector Practice, specialising in Local Government appointments

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