The LATCo View: even in hard times, it’s worth investing in social value
Norse Group CEO Justin Galliford believes that LATCos are best placed to deliver social value – and it’s good for business
Business leaders face unforgiving conditions. Costs are still rising, global uncertainty is hampering long-term planning and difficult trade-offs cannot be avoided. Organisations must manage pressure on budgets while staying competitive and responsive to the communities they serve. Local authority trading companies (LATCos) are no exception. They contend with the same inflationary pressures, skills shortages and demands for efficiency as other employers, but carry an additional responsibility: success is measured not only by the balance sheet, but by the wider value returned to the public realm.
In such a difficult trading environment, spending on social value can appear vulnerable. With every line of expenditure under scrutiny, programmes whose benefits are not immediately visible in the profit and loss account may be among the first challenged. But any cutbacks risk storing up greater costs for LATCos, their council shareholders and local economies. Unlike conventional private businesses, LATCos are part of the public sector family. Their commercial purpose cannot be separated from the places and people they were created to support, and their long-term success depends heavily on the health and resilience of those communities.
Social value is therefore more than a moral commitment; it is a sound business proposition. Customers increasingly expect organisations to show positive social and environmental impact, while public sector partners rightly want service providers to advance wider objectives. Delivery should reflect local priorities, whether that means supporting charities, opening routes into work for disadvantaged residents, buying from local suppliers or reducing environmental harm. The strongest initiatives are not corporate gestures. They are rooted in a clear understanding of place and delivered with local partners. Done well, they strengthen reputation, build public trust and reinforce the relationship between a LATCo and its council owner. They can also help councils address challenges that no single service can solve alone.
There is also a clear workforce dividend. Employers with a clearly identified social purpose are better placed to attract people who want their work to deliver visible value, particularly younger recruits. This matters when many public service employers are competing for scarce skills and managing an ageing workforce. Effective corporate responsibility programmes can support retention, motivation and organisational culture, improving productivity while easing recruitment costs. Employees who see a direct connection between their daily role and the wellbeing of their community are more likely to invest in the organisation’s success. For LATCos operating in tight labour markets, community commitment is a practical differentiator, not a marketing slogan.
At Norse Group, our experience is that the ethical and commercial cases align. We have continued to invest in community activity, including support for Future Horizons, which helps ex-offenders into employment. That work has value in its own right, but also shows what LATCos can achieve through their position as employers, service providers and local partners. We are also beginning work focused on NEETs – young people not in employment, education or training – a persistent challenge for councils and their local economies. Helping people gain confidence, skills and a route into sustainable work can expand the labour pool available to local employers while reducing the risk of disadvantage becoming entrenched. Results take time, but the potential benefits are substantial.
The returns accumulate: stronger customer loyalty, better recruitment and retention, greater scope for innovation and more resilient stakeholder relationships. For LATCos, those gains feed directly into healthier local economies and better-connected communities. The task is to define clearly what social value should achieve, set priorities with councils and communities, and remain accountable for delivery. Not every activity will yield an immediate financial return, but social value should not sit apart from commercial strategy. It should be built into investment decisions, workforce planning, procurement and service design from the outset. When budgets tighten, social value must not be treated as a discretionary extra or an easy saving. It is central to public purpose and, increasingly, to sustainable commercial performance. Prioritising social value is the right thing to do – and it is also good for the bottom line.
Norse Group is the UK’s leading local authority trading company. Wholly owned by Norfolk County Council, the company operates local authority partnerships across the UK, providing a wide range of services including waste and environmental, highways, FM, property consultancy and care homes.
