Commercial Thinking Programme: Calderdale Council

The project was established to create an internal commercial thinking training programme to demonstrate how commercial skills might be utilised to review and develop a range of council services. This case study forms part of our productivity expert programme.

Efficiency and income generation

The programme has been designed to be self-sustaining so council employees are committed to championing its principles across the organisation and are confident in facilitating its roll-out as a crucial part of transformational change. Through this, the programme staff are empowered to develop and implement further commercial proposals to drive the council’s cultural change. 

The challenge

‘Thinking commercially’ is one of the key behaviours the council is promoting as part of the personal and organisational development strategy. The application of commercial skills is fundamental to the council’s transformation programme and its ability to achieve many financial targets set over the period of the Medium Term Financial Strategy. Overall the council has already delivered savings of around £95 million since the austerity measures started in 2010 and expects to make further savings by the end of our three year financial plan. Given the need to make these savings, and considering other changes to local authority funding, it is increasingly important for the council’s workforce to think and act more commercially.

The solution

The support requested was to help create an internal commercial thinking training programme to demonstrate how commercial skills might be utilised to review and develop a range of services across the council.

The key aims were:

  • Identifying the range of commercial skills required to deliver the council’s change programme.
  • Determining the skills and tools staff need to implement a more commercial approach to service delivery. For example, encouraging managers to look at the cost and income together in the form of profit and loss accounts to deliver optimum service.
  • Identifying areas of best practice from other councils and organisations.
  • Developing a training programme to improve the commercial skills and understanding of officers using the lessons learned from live examples of commercial development within the council such as our Piece Hall project, the development of a new sports facility, and the revitalisation of the Halifax historic indoor market.
  •    Demonstrating how the approach might be applied to the council’s various change programmes, including the review of fees and charges and income generation. The total income achieved by the council from fees and charges is approaching £40 million annually so there is scope for this to be exceeded.

The anticipated outcomes were:

  • A better appreciation of how commercial skills can be developed across the council and how these skills might be applied to improve services, realise savings and generate income.
  • Although difficult to directly attribute the extent of savings as a result of the improved skills, we anticipated these skills would initially be required to deliver the additional income generation of £500,000 per annum (or an additional £1.5 million by 2017/18), and reduced subsidy on services of £150,000 per annum, along with contributing to other savings targets.
  • The development of a training programme on commercial skills forms the main purpose of the assignment which will be rolled out to senior and middle managers across the council and elements of the programme will be rolled out to all staff. Although the programme hasn’t been actively promoted to other local authorities at this stage as the council has concentrated on implementation internally, it would be open to approaches from other organisations to assist them.

The Productivity Expert, Estelle, supported and advised the council in creating the commercial thinking development programme. Initially we envisaged one programme could be rolled out across the council but it soon became clear it would be more effective to develop a  range of materials  colleagues could use at different levels, from a half hour introduction to commercial thinking, to a half day workshop, with Calderdale case studies, of where a more commercial approach would be beneficial. The programme includes training on use of the Business Model Canvas as a framework for examining business proposals. This canvas is a tool to help create a business plan through understanding the various elements of a plan such as the value proposition, customer relationships, partnerships, key activity, resources, channels of service delivery, and cost/income projections.

Estelle facilitated a session with the council’s extended leadership team (the most senior officers in the council) to set the scene for operating in a commercial environment and focusing on developing the business vision and strategy. This session was used partly to test the organisation’s appetite for working more commercially and to understand more about the economic, political and cultural context.

The main content of the programme was developed through two day-long sessions with colleagues considered to be potential commercial thinking champions, who would act as ‘change-agents’ throughout the Council, roll-out the training and support the development of proposals. These sessions therefore had a dual purpose: to develop the programme and provide training for those who would be responsible for rolling the programme out.

Since one of the aims was to develop capacity within the organisation and provide a sustainable approach, Estelle provided training for in-house facilitators to equip them with the skills and knowledge to deliver and support the programme in the future. It was also important for councillors to be involved and appreciate the programme so a workshop was arranged for Estelle to facilitate with a cross party group of councillors.

The impact 

The main purpose of the programme was to change behaviours so council staff would think more commercially in their normal day-to-day activities as well as on transformation projects. This change in behaviour is fundamental to contributing significantly to the savings required by the council over the medium term and providing the skill-set required from senior managers.

More specifically the commercial thinking champions, who act as advocates for the new programme, are providing support to services which have identified scope for increased income generation and to those services which the council provides some element of subsidy. A financial target was set for the initial part of the review – a reduction in subsidy of £150,000 by 2016/17. This was achieved through reviewing the charges, reducing costs and generating additional income in the first instance from waste services, pest control, health & safety and the schools museum service.  An extended target is to be set once the review has established the scale of subsidy provided across a range of services. Similarly the council has set an additional savings targets from improved demand management (£500,000 from 2016/17) and income generation, all of which will require a more commercial approach.

As the commercial thinking has become more embedded further savings targets have been set including:

  • a review of fees and charges with a target of additional income of £825k in 2017/18, £1.0m in 2018/19 and £1.25m in 2019/20.
  • new income from the creation of a wholly owned Local Authority trading company (LATC) with a target of £50k in 2018/19 and £75k in 2019/20.
  • an investment strategy with aim of generating a net return of £150k in 2018/19 and £200k in 2019/20.

As a result of working with the LGA Productivity Expert programme, we have achieved the following outcomes:

  • The council held a highly successful and stimulating ‘Commercial Thinking Week’, providing the opportunity to learn new skills, take part in service support sessions, put forward new ideas for service improvement, or to increase income, and attend sessions with business leaders and innovators.
  • A staff development programme to encourage commercial thinking. The programme can be used at various levels from a brief introduction to what commercial thinking means to a half day programme including working on case studies.
  • The formation of a group of enthusiastic and skilled commercial thinking champions who are prepared to support and advise services which want to engage in more commercial thinking.
  • The identification of a range of opportunities to generate income, improve the service, and create efficiencies which exceed the savings required.
  • A positivity and enthusiasm from managers and team members about how their service might operate more commercially.
  • The establishment of a wholly owned LATC which can charge for services at a commercial rate (greater than cost recovery).
  • The creation of an Innovation Fund to provide invest-to-save seed funding to services to implement commercial ideas funded from the savings realised.

How is the new approach being sustained?

The approach is being sustained by growing the number of commercial champions and making the commercial thinking programme mandatory for service managers. The council’s recent senior management restructure provides additional transformation capacity to recognise the need to develop the approach further.

Lessons learned

The main lessons learned were:

  • the implementation of a cultural change programme needs commitment across the organisation and leadership from senior managers
  • cultural change takes time
  • the implementation of commercial ideas requires additional  resources on occasions and a greater appetite and understanding of risk.


Nigel Broadbent
Head of Finance
Calderdale Council

Grace Abel
Productivity Adviser
Local Government Association