What is Commercial Services?
Commercial Services is a trading arm of Kent County Council,
employing approximately 800 to 900 staff.
Why was it established?
To produce income for KCC, mainly from non-KCC business, to keep
council tax down, to act as a market regulator in non-competitive
markets, to reduce costs to KCC and to achieve best value by
negotiating contracts on a Kent, regional and national level on an
economies of scale basis.
How can the public sector justify being involved?
The national government have for some years been encouraging
local government to generate income in this way and there is a
range of legislation that enables local government to be involved
in the private sector.
What does this mean for the Kent taxpayer?
We estimate that it reduces council tax every year by about 1.5%
(or about £15 for the average B and D council tax payer in
Kent).
Are you saying if you did not operate Commercial Services that
council tax would be higher?
We would either have to increase council tax or cut some of the
services we provide.
How much money does KCC spend in the private sector?
KCC purchases £860 million of goods and services in the private
and voluntary sector each year. This means that 85% of our adult
care provision, 100% of our highways work, 94% of our transport
services and almost 100% of our property services are provided
externally.
How much of this business goes to Commercial Services rather
than the private sector?
Of this total of £860m, Commercial Services directly provides
approx 1% with a further 2% being brokered with external companies
via Commercial Services
What income does this activity generate for KCC?
Commercial Services brought in a "dividend" of £4.5 million
(2007/2008) to Kent County Council and provided market regulation
to the authority of £2 million in 2007/8.
What is the Annual turnover?
It has a turnover of £280m and brokered a further £350m in
2007/8.
When was Commercial Services established?
It was formally established in its current form in 1990;
however, some of the units have been supplying goods and services
for over 50 years. In 2008/9 Commercial Services will make a
contribution to the Kent Taxpayer of £6.2 million plus further
market moderation and savings.
Is the reason Commercial Services can deliver best value
services because KCC is subsidising these business?
No. Our external auditors have paid special attention to the
accounts for Commercial Services and have given us a clean bill of
health. There is no cross-subsidisation.
Do you just operate in Kent?
Commercial Services works with a large number of organisations
outside Kent, bringing business and money back into the county and
saving public money across the country. The latest information
shows Commercial Services are working with:
- 80+ Local Authorities (including 22 of the 31 London
Boroughs)
- 400+ District, Borough and County Councils
- 2000+ Schools and colleges
- 300+ Voluntary and Community organisations
- Blue Light Services - Kent Police, Surrey Police and Kent Fire
and Rescue
- 100+ private sector companies (via the trading
companies)
Are other local authorities involved in this kind of
activity?
Yes they are. Kent is not the only county generating income in
this way following the encouragement of the national government to
follow this route.
What does market regulation mean and why are you involved?
The role of "market regulation" has been highlighted as
important following the recent allegation by the Office of Fair
Trading against a Kent builder of "bid-rigging". KCC has a duty to
ensure we get the most for our money and this sometimes means
getting involved in non-competitive markets.
What else does KCC do to help Kent businesses?
KCC is a supporter of local businesses. In addition to the
direct spend in the private sector from the £860 million we work
closely with business link, chambers of commerce and other
organisations to support local businesses. KCC financially support
Locate in Kent, Kent Tourism Alliance and the Kent Film Office, all
of which support business in Kent. We are working on a number of
partnership regeneration projects across the
county. |