Councils told to find the ‘right culture’ for commercialisation

Commercialisation can put a council’s financial health at risk if it is not properly managed, according to a new report.

The report by the Auditor General for Wales warns that local authorities need the right culture, skills and systems to unlock the benefits and mitigate the risks of commercialisation.

It notes that many councils are exploring commercial opportunities to mitigate against the financial pressures they face.

But it adds that should councils decide to invest in commercial opportunities, they need to be clear what the benefits of this are for the council, local people and the wider community.

‘It is also important that a council’s key partners and stakeholders understand and know what commercialisation is for the council, and what it is not given councils are investing public money,’ the report adds.

‘If the approach to commercialisation is not well managed or does not deliver what is intended, it can also place the council’s financial health at risk. And the more a council adopts a commercial mind-set, the more it pushes beyond its comfort zone and management of risk.’

‘Against a backdrop of existing funding pressures, the financial costs of the pandemic are unprecedented in modern times, and financial challenges go well beyond the more immediate and obvious costs of responding to the crisis,’ said auditor general, Adrian Crompton.

‘Therefore, good strategic financial planning and robust governance and decision-making arrangements have become even more important.

‘Should councils decide to invest in commercial opportunities, they need to be clear what the benefits are for the council, local people and the wider community. Being open about where money is being invested and the benefits this will bring is essential to get buy in from stakeholders.’

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