The step-by-step approach to establishing a council trading company

22 Oct 15

Shropshire Council has taken a staggered approach to transferring services to its trading company, IP&E

In May 2012, Shropshire Council committed to becoming a strategic commissioning council. Like every other council in England we have faced, and continue to face, significant financial pressure and a need to reduce costs. However, it has always been our goal to focus clearly on the outcomes that we needed to deliver.

To support us in achieving our goals and help us move past our financial restraints, we decided that the best course of action was to set up a local authority trading company (LATC) to deliver some of our services. We saw this model as a sensible way to deliver better outcomes for taxpayers whilst also maximising public profit.

Our LATC, called IP&E – short for ‘inspiring partnerships and enterprise’ – launched in August 2013. To ensure a smooth transition we staggered the transfer of services, starting with our in-house media and communications teams, which became IP&E Communications. This was followed by the amalgamation of the programme management office and business design team in April 2014. Currently, IP&E offers six different sets of services. Other services are Help2Change, bringing together a range of health services to prevent illness and improve well-being, and Inspire to Learn, which delivers education support services designed to help schools teach and students learn in a safe, inspiring place.

IP&E Business Design and Change Management has led the redesign of a number of our services within the council, including transport, waste and adult social care. Success has been measured by improved outcomes and by customer feedback. Evidence of the efficiencies produced are shown by the fact that Shropshire Council spends less per head than any other local authority in England on adult social care, whilst maintaining the highest levels of customer satisfaction. The team has helped to create an operating model that understands local residents’ demands and responds quickly to their needs.

IP&E Communications has also achieved steady growth and delivered improvements for Shropshire Council in reputation management, crisis management and marketing.

The latest addition to the suite of services on offer through IP&E is Business and Regulatory Services, which includes areas such as pest control, planning, trading standards and licensing. Identified as a potential business offering, a unique model of operation is being developed to be able to take regulatory local authority services and also trade in a commercial environment. Although these services joined IP&E only in the spring of this year, they are already winning external work with other local authorities and private organisations.

Along with IP&E’s directors, we have learned that there are challenges with setting up and running a council-owned company. It is a complex route to navigate and does require specialist support to set it up and operate within the correct parameters. It requires dedicated focus within the company to drive it forwards and clear understanding of trading within a commercial environment to make it successful.

In the long term, it is planned that IP&E could take over the majority of our services. The IP&E directors are in place to ensure the smooth running of the business and to drive it in the right direction with sustained delivery. There are still challenges to overcome but with a realistic, well thought out approach being applied, the company is set to grow from strength the strength, with more services being considered to potentially transfer in.

It has been a promising start for IP&E. If we continue to work closely together the quality and ability to meet outcomes for our customers will continue to strengthen and an important piece of the jigsaw will be in place to creating a council model that will be sustainable into the future.

For more about building LATCs, see Grant Thornton’s recent report, part of a series on alternative service delivery models.

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