Project: Financial due diligence and future delivery model for Revenues and Benefits
Client: Reigate & Banstead Borough Council
Date: November 2019 – January 2020
Challenges faced by the client: One of the key strategic objectives for Reigate and Banstead’s Revenues and Benefits service is to generate new work through providing services to external organisations and to maximise income streams. This supports the Council’s overall objective to become more commercially oriented and financially self-sufficient. However, as part of the Council, the Service faces several limitations of legal or operating nature that restrict its ability to grow.
The Council wanted a structured, robust and objective investigations into setting up a new company for Revenues and Benefits. The objective was to assess whether the Service is well placed to maximise income generation opportunities while remaining a part of the Council; or instead whether an external traded model would give the Service a more robust and flexible platform for further commercial growth. A proper due diligence process was also required to confirm the case for establishing a trading company for the Revenues and Benefits service.
Support offered: In order to ensure that a new trading company is financially sustainable and successful in the long run, an in-depth investigation was carried out to confirm the case for change and ensure the right delivery model is identified. The investigation carried out by MV centred around the three key lines of enquiry:
Market analysis, which allowed to build a better understanding of the market demand, assess the market attractiveness and identify the key growth opportunities for the Service;
Financial analysis, which focused both on building a better understanding of the Service current financial position and the financial case for change;
Delivery model analysis, which followed an objective and structured process to determine the most appropriate delivery model for the Service. It focused on designing effective governance arrangements that ensure there is the right balance between commercial freedoms, and the need for transparency, accountability and control over the Service.
Outcome achieved: Programme of work has been proposed to investigate, design and mobilise a robust and sustainable Revenues and Benefits company. MV identified a number of growth enablers and actions that would enable the new trading company to reach its full growth potential.
MV’s work also looked at how the Revenues and Benefits company could sit within the wider commercial corporate structure that the Council was considering. This supported the Council in achieving its wider commercialisation objectives set out in the Five Year Plan: Reigate and Banstead 2025. It proposed a blueprint for a due process to follow in order to investigate the establishment of trading companies and showed how companies can be set up and governed in accordance with best practice. This provided a standardised approach to trading companies that the Council may want to establish in the future.
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