Why are councils teaming up with private companies?

Earlier this month, GoCardless attended the LGA Annual Conference. There, we discovered councils taking an interesting new approach to delivering services.

Because of significant budget cuts, many councils have started looking elsewhere for sources of revenue. Some are now charging for discretionary services, while others are adding completely new services to their offerings.

Alongside our partners Peterborough City Council, we spoke to councils from all over the country, including officers, councillors and leaders of the opposition. Here are some of the key takeaways about councils’ approach to digital improvements.

More efficiency, less spend

In general, councils want to save money by addressing three areas. Firstly, councils aim to get more done with less manual work, using technology to improve processes. They also want to cut back on physical mailing and reduce paperwork in general.

And finally, streamlining back-office processes is key for many councils in their drive to save money and heighten efficiency across the board.

For payment handling needs, GoCardless is well placed to help councils meet all these goals. Using our digital Direct Debit mandates allows customers to sign up online instead of by phone or paper mandate. Our system also removes the need to manually reconcile council payments, making the back office payment handling process slick and efficient.

“GoCardless helped us to set up an online Direct Debit solution in a matter of weeks. The API was really easy to work with and it saved us having to invest in a bespoke solution that would have taken a number of months to introduce.

“We’ve seen around 60% of our customers chose to pay by Direct Debit so next year they won’t have to spend time renewing their subscriptions. It’ll all be taken care of for them,” said Lee Sirdifield, strategic lead of programme delivery for South Kesteven District Council.

 Lessons from the private sector

We also discovered some councils going the extra mile in their drive to maximise efficiency. Some have begun taking tips from the private sector; in particular, teaming up with companies to deliver strategic governing priorities in new and innovative ways.

For example, Peterborough City Council partners with a range of companies, such as Arcus Global for a suite of services, Peopletoo for customer journey mapping, and of course GoCardless for payments.

Peterborough Council already has a digital strategy in place, working with the private sector to bring in new technology to both benefit residents and improve the way its officers work. For example, Peterborough has now moved to Google's cloud-based applications and has become much more agile by adopting Chromebooks.

By partnering with GoCardless, Peterborough was able to implement a reliable, accessible and easy-to-manage way to collect payments from residents for its newly introduced garden waste collection charge. And by introducing the charge the council was able to cover the £800,000 annual cost of delivering the garden waste service.

Peterborough identified Direct Debit as the most suitable way to collect payments, and GoCardless offered easy integration along with real value for money.

“GoCardless was easy to integrate into our online subscription service, and offered value for money for taking multiple payments,” said James Collingridge, partnership manager at Peterborough City Council.

New ways of revenue generation

Over in Camden, we can see a particularly enterprising example of a council emulating the private sector. Alongside other digital transformations, Camden Council is now acting as a marketing agency for other councils, producing print and digital media for them.

The council’s USP is having these cutting-edge digital skills alongside the in-depth knowledge of delivering council services, to understand what a council really needs.

Camden Council aims for this endeavour to not just become self-financing, but also to create a brand new revenue source. At present, Camden’s clients include other councils from all over the UK, such as Havering Council in Essex.

On top of its digital marketing efforts, Camden Council is already generating significant revenue by renting out spaces, for example for film shoots taking place in the borough. It has also developed new policy to allow digital advertising in the borough, to allow buildings and others to monetise space.

Tackling integration challenges

But there are a number of challenges remaining in the drive towards full digital. One of them is the need to consider how digital tools fit in with existing systems, as Councillor Theo Blackwell pointed out in a recent Medium post.

“Legacy systems create a large technical burden when launching and integrating new tools. There’s an opportunity now to rationalise these systems and applications and identify new opportunities through ongoing systems-thinking reviews of each service.”

With our flexible system, built with a powerful API at its heart, councils can integrate our product easily and quickly with existing systems, without having to reinvent the wheel. Overall, the area of payments is ripe for improvement, with Direct Debit and GoCardless leading the way.

Councils are taking a forward-looking approach with their digital first strategies, which closely mirrors our philosophy here at GoCardless, as we work hard to bring Direct Debit into the digital age.