Salford and Liverpool City Councils plan IT trading venture

'Income will be an important part to us surviving'

Two northern councils have teamed up to sell technology and services commercially.

Salford – home of MediaCityUK and the BBC's Northern HQ – and Liverpool City Councils plan to establish a trading entity within the next 12-18 months to both compete against and collaborate with firms in the private sector.

It's hoped a third, Barnsley, will join their venture.

Setting up as a commercial entity would end restrictions on working with the private sector and see them adopt business plans and governance to ensure independence and accountability.

It would also see them operate without the financial crutch of their parent authorities, who would otherwise cover losses or costs – a form of anti-competitive state aid.

Setting up as a trading entity would also enable the new company to remunerate staff using a co-operative-style arrangement.

"Developing a trading organisation and getting more partners from the private sector will help us exploit commercial opportunities," Salford City Council ITC assistant director David Hunter told The Reg.

The pioneering collaboration is believed to be the first such trading entity covering technology and services.

The legal and welfare departments of other authorities have been setting up as trading entities and selling their respective services.

These include Kent County Council on legal and Buckinghamshire Council Council and the London Borough of Barnet on welfare and housing. Kent claims to provide a range of legal services to 600 public sector bodies across the country.

Austerity has been a driver for many, with cuts in government funding forcing local authorities to find new ways of generating income.

Charging and making income will be a key component for Salford and Liverpool.

"We want to exploit the applications we have and provide collaborative services," Hunter said. "We know that [funding] cuts are going to come so income will be an important part to us surviving."

The Salford and Liverpool plan follows 12 months' collaboration that began with Liverpool looking for a partner to help on an ERP and financials projects, which saw the pair first share the price of a premium SAP engagement package. They share HANA licences while Salford has 10 SAP engineers on staff with plans to expand its team by four to also work on Liverpool systems. A Liverpool City budget planning system was built using IP from Salford.

The councils have worked on a range of digital transformation projects that have included online self-service for council workers and on budget planning.

Their new company will specialise in consulting services and technology in big data, infrastructure services and digital transformation. On the roadmap are white-boxed software products that others can install and rebrand.

"What we have is the transformation experience, especially with devolution and shared services," Hunter said.

Further, Salford has been building systems to support devolution of powers taking place with the creation of the brand-new mayoral post and authority covering Greater Manchester in May.

Salford's work includes creating systems spanning housing, welfare and benefits to help city employees working with families and individuals, helping them to avoid the poverty trap.

"We want to develop the platforms that will support economic growth and that will tackle poverty in the region," Hunter said. ®

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