Justin Galliford
Devolution and local government reorganisation will bring many challenges, but could also usher in an age of innovation. The new mega-authorities will have to decide how to deliver frontline services in a way that generates cost efficiencies through economies of scale, and at the same time meets the ever-increasing needs of their residents. Local Authority Trading Companies present a viable alternative to traditional outsourcing, offering councils greater control over service delivery while maintaining cost-efficiency and flexibility.
Despite concerns about workforce fragmentation and disparities in employment terms, it is essential to recognise the benefits trading companies bring to councils, staff and communities. These benefits make LATCos a pragmatic solution to the challenges faced by local government.
A trading company empowers a council to compete for contracts, creating new revenue streams which help support local services and protect jobs. This flexibility allows councils to innovate, adapting service delivery models to meet evolving community needs without the constraints associated with local authority control. And by creating new opportunities for staff development, operating in a more commercial environment, employees can acquire new skills and experiences, enhancing their career prospects.
It’s not just about cost savings; LATCos provide enormous benefits to the community – as Jonathan Werran, head of think-tank Localis puts it, “ethical commercialism”. By retaining ownership, councils can prioritise social value, ensuring services are aligned with local needs. They can focus on long-term community outcomes rather than short-term financial gains, offering a more sustainable approach to service delivery.
The LATCo model represents a forward-thinking alternative to outsourcing. Councils can retain control, innovate, and deliver services that meet the needs of their communities. With careful planning they can provide a win-win solution for councils, staff, and residents alike. And these features will become more important as the world of local government changes.
