By Malcolm Cressey
Over the last several years, Runnymede Borough Council has had to undergo transformation in order to replace its government funding - about £7.5m pa.
In essence the transformation has been in two parts:
The first part has been to borrow substantial amounts of cheap money in order to buy property that earns a rental income. That has largely been successful but it does carry risk....and RBC are at a point where further significant borrowing feels like too much risk. However, it has meant that all RBC services have been retained, albeit I would say, at a reduced quality. At the same time there has been a downsizing of the organisation by around 15%.
The second part of the transformation process has been to flatten the organisation so that each service area has a senior leader owning the function and as a part of that, identifying new non-interest revenue opportunities. The second part is much more tricky as it requires an entrepreneurial outlook by these senior leaders. I'm not particularly convinced that this is going anywhere and it troubles me because I don't see any demonstrable acceptance of ownership of the new business operating model.....
IS IT IMPORTANT?...well yes! If RBC don't get the second part right and combined with the limit on increasing council tax (2.99% or £5 pa whichever is greater) then there is only one way this will go....services will have to be cut.