Can local government reorganisation help generate revenue for councils?

Whatever your views on the current local government reorganisation plans, it is worth considering what the potential benefits could be, given that final plans have now been announced with the roll-out expected over 2027 and 2028.

Quite rightly, the majority of discussions around this reorganisation concern the delivery of services to local residents and businesses in a timely, cost-effective and beneficial way.

Will a unitary authority be more efficient to run, releasing money otherwise spent on the administration and organisation of multiple district and borough councils into the provision and delivery of vital services? Or will the loss of these borough and district councils reduce the ability of these new unitary authorities to understand the complex and highly-localised issues and needs of its residents and businesses in the new geographical catchment?

One area that perhaps sits out of sight of most involved in running local authorities is the options available to generate income. After all, local authorities are not commercial businesses, and are funded in a completely different way.

However, there is a growing understanding and acceptance that funding of local authorities is unlikely to materially increase in any meaningful way, and so either cuts or generating more revenue are the only options available to even maintain services, let alone enhance or improve them. This is the same basic option that businesses everywhere face.

Seek revenue first, not cuts

Cuts are the obvious first but unpopular option, with no benefits other than on a spreadsheet. Generating additional revenue, on the other hand may require specialist help but it has many benefits.

Setting up a sponsorship and advertising portfolio on council assets is not a new idea, but there is a long way to go to the point where all councils are maximising this option and even using it.

Revenue could be small at first, whilst advertising programmes are set up, but over time, this form of revenue generation could deliver six-figure sums to councils on an annual basis. Whilst this won’t plug multi-million-pound shortfalls in council budgets, it could at least save some frontline services and jobs, boost the local economy and increase local employment levels at the same time.

The creation of new, larger local authorities in some cases, could mean that the opportunities are even more attractive, due to potentially larger portfolios of assets, joined-up thinking and combined highways and planning departments.

So where do we start?

It can be a daunting prospect, with lots to understand and people to convince. Here are some tips:

1. Produce a quick assessment of which revenue-generating activities may currently be in place. In some cases, previous programmes may have lapsed or been set up as a cost-neutral enterprise, rather than to generate revenue.
2. Look at the obvious assets to use. This may be highways-managed sites such as roundabouts, lampposts, bridges, boundary or welcome signs, car parks, buildings and areas of disused land (which could be used for traditional billboard poster sites or digital screens).
3. Seek the buy-in of key stakeholders first. Members, highways, planning, communications and regeneration/commercial departments. Within certain conditions, and when it is accepted that the council needs to generate revenue urgently, then there should be a clear mandate to take action.
4. Create a brief strategic plan to ensure the most commercially-attractive assets are assessed first, with a pyramid-style outlook placing less commercially-viable assets at the bottom. Plans should include the creation of detailed inventories and any salient information to understand where, how and what type of advertising signage could be installed.
5. Circulate the plan with timeframes and appoint champions from each key stakeholder department to ensure implementation is swift, competent and attractive to potential advertisers.
6. Market the sites to local, regional and national businesses and brands as appropriate.

What to be aware of

1. There are many different forms of advertising to compete with. It is a vast market including traditional, digital and online options.
2. Understand your local business market first. There is no point creating lots of advertising sites if the market for them is not there in the first place. Assess the local business community first and identify which sites and locations would they be willing to pay the most for. Ideally, roll out a few sites at a time to garner interest and iteratively tweak your inventory.
3. Be realistic. Don’t expect to generate lots of revenue initially. It will take time and the strategy may need to change if sites are not popular or don’t provide enough exposure for advertisers. Use industry knowledge and experience to formulate income forecasts, not supposition or theoretical discussions.
4. Don’t forget sales are key. ‘Build it and they will come’ rarely works in advertising sales. You will need to be proactive and capture the advertising value proposition clearly and simply. Source relevant data and use it to prove the proposition is sound.

A worthwhile investment

Creating revenue from your assets is not a simple process. Councils have extremely stretched resources, and with any number of factors to consider and mitigate during the process, it is important work with professionals in the OOH media and advertising space to stand the best chance of success.

Richard Eccles is the COO at Outdo Media

Image: Mohamed_hassan