Sponsored: Partnership – removing the risk from income generation

29 Mar 23

For councils looking at easing their financial challenges, Norse Group chief executive Justin Galliford explains how partnership working offers a safer way to generate additional revenue.

Justin Galliford

Two recent reports highlighted the financial difficulties faced by local government, and the high trust residents have in their council. 

The Local Government Information Unit found that more than half of local authorities in England are planning further services cuts, while simultaneously increasing council taxes by the maximum possible amount – desperate measures to remain financially solvent as burdens on their budgets, incomes and monetary resources pile up. 

The report revealed that despite most councils raising council taxes from April, this alone will not enable them to balance budgets, inevitably leading to service areas cost-cutting, and attempts to increase chargeable-services income. 

The second report, issued by Britainthinks, concluded that local authorities enjoy high levels of residents’ satisfaction and trust. By making use of their strong reputation, councils have a great opportunity to develop revenue streams from commercial trading of services. 

However, many local authority trading companies lack the commercial skills to maximise the opportunities, and this can even compound their financial difficulties.

Partnership working, I believe, offers the best of both worlds. Norse joint ventures have harnessed strong support from local communities, including businesses, using Norse Group’s experience and commercial knowhow to develop significant external revenue streams – with minimum risk to our partner councils.

Financial best practice and good governance are fundamental elements of Norse’s local authority partnerships. The deep-rooted public service ethos makes this approach closer to insourcing than outsourcing. Our partners retain a high degree of control, through share ownership and board representation, giving them a direct say in service delivery and income generation. 

The flexibility of the joint venture model means Norse takes the commercial risk, while the more commercial approach generates surpluses and cost savings that are passed to local authority partners through profit share arrangements. 

With the extra pressure from inflation and increasing demands from the cost of living hit residents, local authorities increasingly risk falling into the financial abyss without additional revenue generation.

I believe using partnership working will be vital to help them ride out the storm.

  • Justin Galliford

    Chief executive of Norse Group. Wholly owned by Norfolk County Council, Norse’s turnover is over £350m. The company operates local authority partnerships across the UK, providing a wide range of services including waste and environmental, highways, FM, property consultancy and care homes.

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