How this works in practice
Research commissioned in recent years by the Local Government Association (LGA), the Audit Commission, the Institute of Local Government Studies (INLOGOV) and the Association of Public Service Excellence (APSE) has shown that councils are making considerable use of the various trading and charging powers - see further reading below.
'Positively charged: the charging directory', compiled by the Audit Commission, shows the full spectrum of charging activity in the sector.
Facilities management, including building maintenance, cleaning, catering and grounds maintenance; waste management; transport and vehicle maintenance are well-established areas of local authority trading activity. New avenues are being opened all the time.
The tougher times that councils are now living through, combined with reforms in particular services such as adult social care, are leading to a growth in the number of local authority trading companies including joint ventures with civil society organisations and the private sector.
Pioneering examples are shown in Box 4.
Positively charged: the charging directory - links from the Audit Commission website.
Trading company pioneers
Norse Group is a holding company created in 2006 to bring together two companies, both owned by Norfolk County Council, which were already trading successfully: facilities management provider Norse (formerly Norfolk County Services) and property consultant NPS Property Consultants. In 2008 Norfolk Environmental Waste Services (NEWS) joined the group, expanding the range of services. The group turns over in excess of £150 million and employs over 5,000. Jointly-owned operating subsidiaries provide services around the country.
SK Solutions is wholly-owned by Stockport Council. It provides a wide range of services ranging from facilities management, including catering, to highways and waste management. It was formed in 2006 from the council's direct services department when some 1,000 staff transferred. Today, turnover is around £40 million.
Swindon Commercial Services
Swindon Commercial Services has followed a similar path and provides a parallel range of services. It was established as a trading company early in 2010 with 800 staff and a turnover in excess of £70 million.
Essex Cares is the name of a group of local authority trading companies providing adult community support, equipment and employment and inclusion services. In 2009 some 850 county staff were transferred to this business which currently has a turnover of over £30 million.
Chelsea Care, which provides brokerage and domiciliary care services, was formed as a business start-up in 2009 aiming for an initial £1 million turnover. Croydon Council is among other councils currently considering a trading company model for adult social care.
Kent Top Temps
Kent Top Temps started out in 2003 as an agency within Kent County Council's Commercial Services. In 2005, in order to take on work in the private sector, it was transferred to a trading company. It is a recruitment agency, recruiting to permanent, temporary and contract jobs throughout the county. Currently, turnover is in excess of £22 million and there are 26 permanent staff. Trading as Kent Top Travel, the company also operates one of the largest commercial bus and coach fleets in the county, providing vehicles for private hire, public service routes and Park and Ride services in process. Today, this operation has an annual turnover of nearly £6 million and employs 125 staff.
10 May 2012