14th March 2019
Why public sector transport leaders should embrace further commercialisation
Civica’s research finds 48% of public sector transport leaders agree they need to adopt new models to help bridge the funding gap.
Improving service delivery, reducing costs and generating income to safeguard services are three priorities cited by Transport managers in our independent survey. The demand for instant access to information has filtered through to deliveries, with customers experiencing next-day and same-day deliveries, and the expectation is that public sector services will also be available on request. This demand will increase administration and associated costs, so businesses need to embrace cloud-enabled, modern technologies if they are to remain competitive.
Our research, which forms part of Civica’s Commercialising Public Sector Transport Operations report, reveals that public sector transport leaders recognise the need to commercialise services further to survive budget cuts. Forty eight per cent agreed that their organisation now needs to adopt new models – signalling a positive appetite for increasing transformation.
The need for commercial education and experience
The research highlights just how vital commercialisation will be to survive budget cuts. However, the report calls for greater education in this area, with an overwhelming 73% of the public sector transport leaders surveyed stating that they had no or limited commercial experience.
It also calls for a balance of education alongside increasing the appetite for risk, as this can hinder innovation when adopting new models.
However, lack of education isn’t the only barrier; there also needs to be a culture shift. For example, while many in the sector recognise the need to adopt commercialisation, 62% said that they are too focused on keeping services running to think about new models.
The report outlines how bringing external experts into organisations and learning from them their experiences could not only drive commercialisation but also create the ‘thinking time’ and culture change needed to embrace it. As Adrian Millward, Strategic Manager for Fleet and Compliance at Stoke-on-Trent City Council comments in the report: "You need to look at what you want to achieve and how people, technology and processes can work together."
Our research also found that strong leadership is essential to develop a culture of commercially driven change and innovation. The need to reappraise an organisations’ appetite for risk and accept that not every idea will be commercially viable is vital.
The report details the following three approaches to drive change:
1. Challenge the culture: with any change programme it’s essential to win the hearts and minds of employees. 54% of survey respondents accept that employee buy-in and support for change will be crucial.
2. Grow commercial capability: identify which services will deliver new income streams and either access existing skills or train or recruit new people with commercial experience; alongside maximising existing technology to support future growth.
3. Deliver pioneering services: while many transport providers have already implemented cost cutting measures, organisations should review how they can use existing resources and assets to generate income while maintaining frontline services.
Speaking of the challenges and opportunities facing public sector transport departments, Matt Goodstadt, Director, Civica Transport said: “Transport is often seen as a cost to the organisation, but many frontline services depend on it. Through commercialisation, transport departments can generate significant revenue which can positively impact the entire organisation as well as protect frontline services, and even encourage further investment.”
Civica provides market-leading fleet and asset management solutions to drive major cost and usage benefits for public and private sector customers, including 82% of UK police forces, 48% of UK fire and rescue services, 46% of UK ambulance trusts and more than 100 local authority and government agencies.
Commercialising public sector transport operations
Balancing budgets and reinvesting in frontline services