Press Release - The Wider Markets Initiative
26 January 2006
Under the Wider Markets Initiative government departments could
provide real gains to the public sector, according to the NAO. The
initiative encourages the public sector to make fuller use of core
public assets in an enterprising way – developing and selling new
goods and services. Where undertaken, such new activities are
working well.
The benefits of successful wider markets activity include
reducing the public sector’s cost base and improving its skill
base. However, the one department in four that has actively
promoted such activity so far has been as much driven by funding
pressures as awareness of opportunities. A thorough assessment of
wider markets opportunities is needed and should include the
potential to market intellectual property, data-sets and know-how.
Wider Markets activity requires further encouragement of a culture
of well managed risk taking and the development of additional
commercially skilled individuals.
Most pathfinder projects are working well. For example:
- CEFAS, a science body, generates £10 million per year in
commercial revenue when scientists are not working on their core
duties.
- British Waterways Board generated £6.1 million from new
ventures in 2004-05
- Better use by the Armed Forces of property, for example Boxer
Towers, avoids £50,000 of demolition cost per tower. Letting
towers, for use as mobile telephone masts, generates annual revenue
of £720,000.
According to today’s report to Parliament by the head of the
NAO, Sir John Bourn, most Wider Markets activities are taking place
where the leadership has been supportive. These include projects
that had to overcome initial concerns about the suitability of the
activity, or needed specific legal powers, before gaining business
case approval.
Departments do not keep central records of their various wider
markets activities and in most departments, the Wider Markets
Officer is not a full-time post. It is unlikely that the 77 per
cent of Wider Markets Officers who spend no more than five per cent
of their time on the initiative can be fulfilling their primary
responsibilities. This has made it difficult for Partnerships UK,
charged by the Treasury with supporting the initiative, to provide
an estimate of the revenues earned from current activities.
The success of commercialisation projects cannot be guaranteed, but
Sir John suggests that a thorough approach to risk management will
increase the chances of success and minimise the impact of failure.
The report supports a change of culture with effective
accountability and appropriate rewards. This will help departments
to identify and realize the substantial untapped potential both by
launching commercial ventures in-house and, on occasion, by forming
partnerships with the private sector.
Sir John Bourn said today:
"Wider Markets projects should be seen as part and
parcel of good asset management in the public sector. They offer
the prospect of better public services at a lower overall cost.
Many government departments have not done enough to look for such
opportunities and so cannot be sure that they are fulfilling their
responsibilities to provide value for money to the
taxpayer.”
Notes for Editors:
- Press notices and reports are available from the date of
publication on the NAO website at www.nao.org.uk.
Hard copies can be obtained from The Stationery Office on 0845 702
3474.
- making use of surplus capacity in assets that are needed for
public services but cannot be fully used and are not suitable for
disposal
- income generated by sales into wider markets can be retained,
although projects which are large enough to have the potential to
distort Government spending need Treasury approval;
- the ability to use income from selling into wider markets to
offset administration cost expenditure and meet efficiency
targets;
- activity must be financed from within existing resources;
- there may be flexibility in the extent to which income needs to
be accounted for on an annual basis depending on departments’ usual
arrangements;
- the case for new assets should be based on requirements for
delivering core departmental objectives; and
- any substantial investment should normally come from the
private sector.
- Wider Markets activity covers software, databases, expertise,
skills, brands and intellectual property as well as physical assets
such as land and buildings. Utilising those assets more fully can
involve selling existing goods and services, developing new goods
and services from existing assets, licensing and leasing
arrangements, and sponsorship activities.
- CEFAS is The Centre for Environment Fisheries and Aquaculture
Science and is based in Lowestoft see www.cefas.co.uk.
Press Notice 6/06
All enquiries to Mark Strathdene, NAO Press Office:
Tel: 020 7798 7183
Mobile: 07748 181 693