The Long and Short of LATCo’s

For over 10 years I have worked with many LATCo’s and aspiring LATCo’s. The start of 2024 therefore provides a good opportunity to reflect on the experiences gained and consider “the long and the short of LATCo’s”

The “long” and the “short” referred to here is the time period of a LATCo’s life. Over recent years we have seen LATCo’s conceived, born, developed and unfortunately cease!

At the head of lessons to be learnt here is, when considering any LATCo it is essential that short-termism is not permitted to rule the day. If you consider a LATCo as a short term expediency the advice would be to seek an alternative option!

LATCo’s especially do not fit into electoral cycles, 4 to 5 years is not sufficient time to maximise the benefits and opportunities of a LATCo

In recent years too many LATCo’s have been created and grown to become profitable businesses providing real financial benefits for their council shareholders only for changes within the parent council to trigger ideological rather than reasoned changes in the way the LATCo is permitted to operate, or its goals for the future. In too many cases the LATCo once financially viable and successful has been set on a path of decline leading to its ultimate cessation. So the learnt experience here can be summarised simply as:

1. Only create a LATCo if you are prepared for its development over a period of more than 5 years
2. Ideally get cross party support for the LATCo before you start. Business and politics generally make bad bedfellows
3. Have clear financial and operational goals for the LATCo agreed by all key current and potential future stakeholders
4. Don’t be tempted to run a LATCo without the intention to make a profit. Businesses need profits to invest in future development of their operations. Too many parent councils see a LATCo as a cost centre and strive to run the operation on a shoestring. A LATCo should be self-supporting but it also needs profits to invest and develop itself for the future. Whilst occasionally there might be benefits to creating a LATCo wholly or mainly to minimise the complications of local government procurement regimes past experience suggests even in these cases the absence of a profit motive can cause difficulties in maintaining a successful long term LATCo for the ultimate benefit of the taxpayer

At Ensors we are always keen to have early conversations with current or potential LATCo’s, with no obligation to engage us further. We can also connect you with LATCo self-help groups such as the LATCo network who are always happy to share real life experiences from the front line.