To consider the report of the Director Net Zero and City Management.
The Service Lead Net Zero and Business presented the report which offered an update on work undertaken within the Net Zero and Business Service under the umbrella of commercialisation for the City Council. An appendix also set out the wide range of projects the team were currently leading on with a projection of gross overall income that could be achieved. The intention was to provide an update on activity to the Scrutiny Committee every six months.
A number of factors had affected the progression of recent activity including a period of furlough during the Pandemic and an extended sickness period of the Commercial Manager, and an adjustment of the activity related to borrowing due primarily to the high level of interest rates. The Commercial Manager has been focusing on winning new contracts with an emphasis on waste and recycling; looking at the delivery of services differently and pursuing new and innovative ways to develop a new income stream for the City Council. He had spent some time negotiating with a number of local companies to win new contracts, but they were not forthcoming, in part due to other competitors in the local market. The report highlighted a number of projects being pursued with a significant emphasis on supporting and scoping new waste and recycling contracts using spare capacity to service the city. The gross values for the contracts were quoted, but following a Member’s request, the net values for waste and recycling would be made available and would better reflect what value would be achieved for the Council.
A number of commercial projects were on hold due to officer sickness and the current economic conditions including higher interest rates, and increases in the cost of raw materials. Delivering commercial activity was very challenging, and going forward, meant a change of emphasis for the Commercial Manager on supporting existing services, though efficiencies or winning new contracts.
Members made the following comments, and the Service Lead Net Zero and Business gave the following responses to Members’ queries:-
· that despite the Council’s financially challenging position and the tendency to look inwards that commercialisation opportunities were not lost. The current core of commercial activity continued to focus on working on waste and recycling, as the Council offered a good service with the businesses that the Council work with, due in part to being the Waste Authority and disposal of waste within Exeter contributed towards the Council’s Net Zero ambitions in reducing carbon emissions. The inward internal focus remained, but working with the business community without borrowing or winning new contracts remained important.
· identifying income as a target was not relevant as costs and allocated overheads might exceed income and not make a contribution to the revenue account. A request would be made to the Service Lead for Waste and Recycling to provide net figures showing costs of contract delivery such as staff, fuel, hire of vehicles and maintenance taken into account.
· were there any restrictions for any profit made on how it could be used in the Council. It was anticipated that any surplus made would be used to reduce the bottom line to deliver a particular service and reduce the impact on the general Council’s finances.
· that Members could not adequately scrutinise the opportunities identified for commercialisation until there was an understanding of the availability of the spare human resources or property capital. There was spare capacity, but whether that would change in the future would be a future discussion.
· whether the suggestion of staff expanding their job roles would result in sufficient additional income stream. However, other opportunities such as deriving more income from car parking or the development of the Port Authority would be more than welcome, but whether more work on shared services would be undertaken. Some services that are currently free, could be charged for, but more information was needed but Members should be invited to make suggestions and identify priorities. Although figures were not included as they were commercially sensitive, the potential projects were all areas that could be developed as appropriate and using any additional resources but doing things differently. Certainly, additional income could be derived from any further commercialisation of the waterways should the powers change. Shared services was being explored as part of the Exeter One Programme. The comments and suggestions about shared services made by Members would be discussed with colleagues. Car parking was now within her responsibility and a parking review was being undertaken to look at activity and potential savings to be made from looking at how they might do things differently and around utilising any spare capacity in car parks. The Chair suggested that when the Combined Scrutiny Committee met to discuss the budget, there might be an opportunity to explore the commercially sensitive aspects of the Commercialisation project work again.
· the pros and cons of the role of the Commercial Manager versus commissioning specialist support should be explored, particularly in areas such as waste and recycling to maximise opportunities, and an enquiry about the timescales for the Exeter City Services web site. The current post holder was on a temporary contract, and some of the work was quite specialist with technical advice required so consideration of whether more generalisation or more specialism would be beneficial was being considered. The rollout of the web site had been delayed due to the Pandemic, and the need for it to be built by Strata Solutions Ltd, the Council’s IT Service.
· that along with the suggestion of exploring other areas for income whether green burials could be considered. The Member also enquired about the current status of the Exeter City Services web site and whether additional money had been spent on relaunching the web site, the consultation on any changes to the Port Authority and whether a commercial food waste collection would be pursued when the residential food collection had not been rolled out. The web site was designed but had been put on hold due to the Pandemic, as Strata will be building the website, there would be no charge. The site would be separate to the main City Council web site, offering an opportunity for further engagement with the business community to identify income opportunities. It was confirmed that any changes to the current arrangements in relation to the river and canal would involve a period of consultation in line with the Council’s Consultation Charter. In a further response to the Member, the necessary infrastructure would need to be in place before a commercial food waste collection to the business community was offered.
· a concern that the food waste roll out had been slow and there may be an equity issue if a residential property collection was not be in place, before the city centres’ commercial establishments. The Service Lead confirmed that this would not be the case. The Chair referred to the progress of the food waste collection which would continue to be reported to the Customer Focus Scrutiny Committee.
Members also discussed the city lottery suggestion and had varying views and whilst the promotion of gambling could not be supported, there was a difference between gambling which might lead to serious addiction and community lotteries to support the arts and local good causes. The Chair added that he was aware that other District Council’s ran a community lottery and at least with that model some funding could come back into the local community. The Director, Culture, Leisure and Tourism stated that a report exploring the options of a city lottery was being presented to the Executive.
The Chair thanked the Service Lead Net Zero and Business for the report and anticipated that there would be further consideration as the projects were explored.
Strategic Scrutiny Committee noted and supported the following:-
(1) work undertaken and planned within Commercialisation that supports the One Exeter Programme, as well as the City Council’s Medium Term Financial Plan;
(2) with activity to be adjusted to support services to increase income, rather than activity that requires borrowing – ‘invest to save’ – to deliver commercialisation; and
(3) going forward, an update be presented to Strategic Scrutiny every six months, from November 2022 onwards.