Councils expect increased commercial activity, research suggests

The research was carried out in partnership with think tank Localis and aims to create an annual barometer for how council’s are responding to a shift towards independence from government.

Of the 250 council officials surveyed, almost one in five senior managers expect their council to be generating up to 30 per cent of revenue through commercial activity within the next four years.

Just under half of respondents expect their local authority to be generating between 11 and 20 per cent of revenue from commercial activity by 2020, with just under half also saying that their council had at least one post dedicated to developing commercial business.

Local Government Association chairman, Cllr Gary Porter, added: “It’s a variable picture at the moment but income generation is something that all councils should be trying to do.

“I think probably in the next two years we’ll see the first councils breaking away from revenue support grant.”

Director of the Society of Local Authority Chief Executives, Graeme McDonald, said: “It’s unsurprising when grants are being cut and there are restrictions on the ability to raise income from council tax that councils are looking at the only other source of income to protect services.

“This enables an organisation to develop quite a wide range of income streams and therefore it isn’t over-reliant on one.

“Some authorities will be very good at this and some won’t be.

“Those councils that have responded best to the financial crisis are the ones that are not over-reliant on one income stream, so it’s certainly something that the sector should be encouraged to do, but any commercial activity has risks associated with it and therefore it’s important that councils enter this with their eyes open.”

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