In 2023, C.Co was commissioned by a Unitary Council that had recently published its commercial strategy.  Set against a landscape of reducing budgets and increased demand, there needed to be an additional focus on exploiting new forms of income.

The strategy outlined a vision to become more commercially minded, with a focus on making choices around identifying opportunities, delivering services differently and maximising assets, rather than allowing services that were seen as important to residents to continue to be delivered.

C.Co was commissioned to support delivery of parts of the strategy by undertaking a review of the current existing fees and charges for discretionary demand-led services, which was seen as a key feature to deliver the strategy.

C.Co’s approach included asking four key questions:

  1. Are current fees and charges set at an appropriate level?
  2. Is there the opportunity to increase revenue through alternative pricing structures?
  3. Is there potential to generate additional income from charges for services that are currently free at the point of delivery?
  4. Are there new opportunities that could be explored to enable further income generation?
Our approach

We ensured that we first gained an understanding of the local context and the financial numbers behind the services, by using population trends, socio-economic data and other data and information from the ledger to identify the demand on services and the cost pressures. This included understanding the Council’s budget, what efficiency measures had already taken place, those that were planned, as well as what savings targets had been set.  We also looked at the key external factors (PESTLE) and likely impacts. We also ensured we had a good understanding of member appetite and any potential ‘red lines’.

We undertook a comprehensive benchmarking exercise against statistical nearest neighbours and designated comparator authorities. We identified opportunities for increasing current charges, as well as opportunities for generating new revenue through gap analysis.

Findings were presented in tabular form and identified opportunities by product, by service area with comparative prices from eight near neighbours or comparators.

Detailed reporting highlighted where most benefit could be gained and what this was likely to be in terms of actual additional revenue.

Added value was also provided through:

  • Review of the ledger – highlighting possible/probable loss of earnings by identifying differences between the current charging structure and actual revenue.
  • Providing opinion on the structure of the current fees and charges list around clarity, complexity and transparency, and recommending a simplified structure with examples.
  • Opinion on whether the Fees & Charges policy reflects the current market and its challenges. Recommendations for annual review.
  • Provision of a booklet of Local Authority Case Study examples of commercial decision-making, including the benefits of each commercial activity, as well as key learning points.
The outcome

Overall, our findings were wide ranging and led to a number of recommendations from; a list of fees that should be increased and charges that should be stopped; to developing a standard approach to determining costs and pricing; and understanding local communities and their willingness to pay.  With an underlying caveat that any charging policy for discretionary services should have the general aim of ensuring these types of services are self-funding and that marginal costs as well as overheads are incorporated in fee setting.

For an organisation, this type of review provides the opportunity to understand working practice, not only around fees and charges, but also the broader approach to commercialisation and how it supports the Vision, the Corporate Plan and the Medium-Term Financial Strategy.

Contact our team to find out how we can help you with commercialisation.