North Lincolnshire Council will set up a new trading company to help generate income in the wake of budget cuts.
From April 2015 to March 2016, new business generated through commercial development exceeded £150,000 and resulted in a turnover of £7 million.
The new local authority trading company will direct, source, secure and develop new and profitable commercial income on behalf of the council.
Any profit achieved by the company would be returned to the council in the form of a dividend payment on an agreed basis.
Profits would be subject to corporation tax.
The company will have a board of unpaid directors and company secretary. They will be responsible for managing the affairs of the company and will be bound by a shareholders’ agreement.
The company would trade in professional and technical, business management, education support and operational and facilities management services.
Deputy leader of North Lincolnshire Council, Councillor Rob Waltham, said: “The changing landscape for local government demands innovation in service delivery, and the council is embracing this.
“We are a low tax authority and will do everything in our power to keep it that way. That is why we are pursuing the commercial avenue to explore ways we can generate more income so we can continue to deliver high quality services to our residents.
“We are always looking at innovative ways of working and rightly so. We need to develop new and substantial income to support the council’s budget plans and corporate strategy objectives.
“We are a forward thinking council and being proactive and looking at how we can generate more income by operating more commercially demonstrates great business sense.”