Feature: It’s time for authorities to look at alternative delivery models

Mark Scott, CEO at Cantium Business Solutions, reflects on how the pandemic has changed the role of local authorities  and how the lessons learnt from the ongoing crisis can help them recover.

Over the last 18-months or so, local government has played a significant role in leading the response to the pandemic. It’s been well documented that authorities have seen a significant increase in the demand for services, especially from some of the most vulnerable members in the community. 

The impact of lockdown intensified many of the challenges facing local authorities and the ability to stay engaged with those citizens most in need. However, by rising to the challenge and migrating both employees and services online, we’ve seen the accelerated use and adoption of technology, data and digital services. Clearly, one of the main lessons of the pandemic has been that councils have demonstrated their ability to innovate and create new service delivery arrangements at scale and speed.

What it also showed is the balance between procuring large volumes of goods and services quickly, with the increased risks associated with emergency procurement. Many local authorities have had to adopt somewhat of an entrepreneurial attitude, navigating the relaxed procurement processes while ensuring they didn’t pay over the odds for goods and services. So, what next for councils? How do they maintain this new momentum?

LATCOs and the art of the possible

Retaining the entrepreneurial spirit that powered authorities through the pandemic is important and it’s something that should be supported through policy and legislation.

Local councils are often constrained by their ability to respond through procurement regulations and the new Procurement Bill which sets out a simplified approach to public sector suppliers is a welcome move, one which will hopefully speed up the procurement process and place value for money at its core.

But the pandemic has had a considerable impact on already financially stretched local authorities. As a result of this, there has been an increased interest in local authority trading companies (LATCO) as a delivery model for the future. At a very basic level, they give local authorities the power to trade in the commercial space and to take advantage of the wider marketplace in terms of the services they’re already providing.

The pandemic proved how robust they can be, allowing authorities such as Kent County Council to tap into the supply chain when it needed to be agile and adapt. The Council sourced and distributed PPE equipment for the entire County through its LATCO. Harnessing the commercial mindset of a LATCO enables councils to reap the benefits of an additional revenue stream, remain self-sufficient and not rely on larger distributors who can command the supply and demand of important goods and services.

Has the role of local councils changed?

The role of local government is continuing to evolve. A strong commercial capability is key for councils to be successful, but they need a very clear partnership strategy in order to drive the right outcomes for citizens – especially as some authorities move away from the direct delivery of services and instead look at driving change through partnerships.

Simply taking a department out of an authority and directing it to become commercial isn’t enough. To create a successful LATCO, there needs to be the right blend of commercial experience against the wider backdrop of the Council’s objectives – it’s crucial that these two things are kept aligned.

The objectives and the scope for delivering outcomes needs to be clear. While a LATCO is an arm’s length organisation, it isn’t a completely separate entity from the authority and can work towards the strategic drivers set by its parent organisation.

Emerging from the pandemic

The pandemic has demonstrated the importance of scale and organisational resilience. Local authorities have had to find new ways of engaging with those most in need, and digital technologies and services have played a major part in that. As we switch to recovery mode the challenge here will be continuing to deliver high-quality services during a period of austerity. Now is the time for local authorities to invest in developing the capability and skills required for the future. It is time to become commercially aware and explore new ways of working so they can secure additional sources of investment and funding. Put simply, LATCOs are the powerful tools needed for authorities looking to do things differently. 

Photo by Christina @ wocintechchat.com