Developing commercial interests while assuring good governance
Councils are increasingly forming Local Authority Trading Companies (LATCos) as a means of leveraging their position. Creating discrete business entities to separate an LA’s core activities from its commercial interests is clearly a necessity.
Some of the main reasons for diversifying their interests in such a manner include developing new income streams and preventing costs and debts incurred by LATCos from becoming liabilities for parent councils. Many LAs have taken the opportunity to commercialise services in order to free them from the constraints under which public sector organisations operate.
However, there has been some cause for concern. Fundamental shortcomings have been identified in both commercial decision-making and governance arrangements. Ultimately, there are valuable lessons to be learned, but this doesn’t alter the fact that LATCos are excellent vehicles for councils seeking to deliver better local services through innovation and developing profitable commercial interests.
Business models and lines of business
There are a number of business models that LATCos can adopt. One is to be an ‘insourcing’ supplier, that is becoming the provider of a specific service or set of services, replacing a third party outsourced supplier(s) to the parent council.
Another model extends the insourcing model through scaling up and offering services to other local authorities besides the parent LA. There is also the option to partner with other commercial organisations. This may be as delivery partners, or to innovate in other ways.
One line of business where there is a natural fit is with the housing sector. There is a widespread practice of setting up private sector housing companies as wholly owned subsidiaries which provide residential property on the private rental market at true market rents. Other areas where LATCos have developed interests include leisure services and parking management. However, perhaps the most natural fit is with environmental services.
Drive success of your environmental LATCo with Whitespace
Whitespace Work Software aligns very well with the business models of LATCos that wish to develop environmental services. Our team is highly experienced at partnering to provide outsourced technology services to manage the workflow of the range of activities typically undertaken by the public sector.
This case study showcases our experience in helping LATCos to flourish. It features the success achieved by Environment First, an entity formed to separate the waste management operations of the joint authority between Eastbourne Borough Council and Lewes District Council in Sussex. Our activities are UK-wide, with other ongoing LATCo engagements for councils and entities spread as far apart as Scotland and London.
The Whitespace platform is versatile and highly adaptable and has been used creatively by some local authorities to tackle other logistical challenges, not just those related to environmental services.
If you currently run or are thinking of launching a LATCo, why not talk to our team to see how we can help provide the software that allows you to do a better job of managing waste and environmental services operations? To see what Whitespace could do for your LATCo delivered local government services, book your free Whitespace demo to see how our software works.