This guidance is intended to support councils when undertaking commercial activity irrespective of the end outcomes they are seeking to deliver. The key purpose is to maximise their chances of success.

There are a range of common considerations, tools, and methodologies which councils can adopt in order to develop and effectively manage a programme of commercial activity.

There are also some common success factors such as being prudent, understanding what you want in terms of objectives, understanding the markets you are operating in, understanding and managing risks as well as understanding and managing costs.

Some councils have run into difficulties arising out of their commercial activity with a small number of councils exposing themselves to significant risk. Whilst this is not the case across the whole sector, they do impact on the sector’s commercial reputation and on the reputation of the individual authority.

The reasons for these failures have been documented, with some high-profile cases having been the subject of Public Interest Reports by auditors. The findings of these reports provide useful information and lessons learned for all councils. Stakeholder consultation, robust business cases, alignment with corporate plans and prudent financial management were cited as essential for success – and are reflected in this guidance.