Income Generation and Enterprise Plan - Epsom and Ewell Borough Council

The challenge:

This Council has been severely affected by austerity cuts made by Central Government.

In 2016/17 and 2017/18 Epsom & Ewell Borough Council has delivered reductions to its budgeted net expenditure in the region of £1.6 million and this has been achieved through the delivery of cost savings and growing income streams such as through property acquisitions, charging pest control, enhanced care services at the Wellbeing Centre and bringing back catering services in-house for our venues.

The Council stopped receiving the revenue support grant in 2017/18 and from 2019/20 onwards the financial challenge becomes even harder with this Council expected to make a negative RSG payment back to Central Government of in excess of £600,000.

This Council has been able to set a budget with no use of general fund working balances for 2018/19. However, with the funding cuts already mentioned and other external pressures such as inflation, it is anticipated that the Council will need to deliver savings of nearly £500,000 per annum to maintain its current position of no use of reserves.

The solution:

Epsom and Ewell’s approach to commercialisation seeks to build on the positive commercial thinking and practice that already exists within the Council along-side reinforcing the strong public service ethos that characterises the borough and which continues to put the borough’s residents first.

Four specific work streams have been identified:

• Understanding the needs of residents, businesses and visitors and the market in which the Council operates - this involves undertaking some analysis of demographic and business trends to help form a borough profile that would identify market opportunities in both the short and medium term.

• Income Generation – by providing services which customers are prepared to pay for which generates revenue that can be reinvested back into Council services.

• Reviewing key policies and processes - to identify opportunities to enable the Council to respond more quickly and efficiently to market opportunities in a way that reflects the realities of operating in a more commercial market. This includes enabling staffing and procurement decisions to be made more quickly to enable the service to respond more effectively in a competitive environment.

• Creating a more enterprising culture – building the skills, policies and processes to enable staff to embrace a more commercial approach in their work drawing on the best examples of high performing customer focused commercial organisations.

Action Plan – services focus

The following table sets out the services which will be targeted in the plan. To ensure maximum impact from the available staff capacity, not all services will be progressed in year one, but instead phased in over the next four years.

The overarching aim of this strategy is to deliver value to customers while generating a financial return which contributes to the Council’s efficiencies and additional income targets, helping to safeguard core frontline services.

The impact (including cost savings/income generated if applicable):

The Medium Term Financial Strategy shows that the Council will face a projected budget gap of £0.6m by 2020/21. Additional income generation will contribute towards addressing this gap.

There will be a need to understand, carefully manage and control the risks associated with the implementation of this plan including timing, competition and the impact of cyclical changes in demand which can result in large variations in income over time. Some up-front investment will be needed for the successful implementation of this plan as well as appropriate provision for contingencies to mitigate some of the risks. This includes spend on marketing, business planning, publicity, web design etc. However, it is expected to be at least self-financing in the short/medium term.

It is important to note that the benefits of pursuing a more commercial approach are not purely financial. Becoming a more commercially focused organisation means putting the customer at the heart of everything the Council does, and doing so in a financially sustainable way. It is about actively encouraging creative thinking to develop more effective ways to deliver services that residents, businesses and visitors need and want.

Working in a more commercial way has the potential to make Epsom and Ewell more attractive as an employer, providing staff with more development opportunities, and increase the Council’s ability to attract and retain talented staff.

How is the new approach being sustained?:

The delivery of these work streams identified will be overseen by an officer board chaired by the Chief Operating Officer and vice-chaired by the Chief Finance Officer. The officer board will report through to the Council.

The Council is in the process of recruiting a new Marketing Officer post. The new post holder will work with teams to assist in the development and delivery of new commercial opportunities.

Lessons learned:

• Key to the success of this approach will be how we support and empower our staff to take innovative business-like decisions, manage risk and seize new opportunities.
• Improving the quality and speed of decision making will be vital in enabling the Council to be more flexible and agile in responding to market opportunities and to make better use of evidence, industry best practice and local market intelligence.
• To be realistic about potential income and savings in the medium term financial plan to budget appropriately. It is important, for the good of the whole organisation, to resist pressure to overestimate additional income.

Council Contact:

Lee Duffy, Chief Finance Officer, Epsom and Ewell Borough Council, [email protected]

LGA contact:

Grace Abel, Advisor - Productivity, Local Government Association [email protected]