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.