Progress report on the Sponsorship and Income Generation Unit

Report: 12
Date: 10 July 2003
By: Commissioner

Summary

This report outlines the progress made in setting up the recently enhanced Sponsorship and Income Generation Unit showing the current position and the forward plan.

A. Recommendations

That members note the report.

B. Supporting information

Background

1. On October 24 2002, the Finance Committee gave approval for the Sponsorship and Income Generation Unit (IGU) to expand by an additional 12 posts to facilitate an increase in both income generation and sponsorship to £2.5m in the first year rising annually to a maximum of £7.5 in line with the newly adopted 5 year strategy. The majority of this expansion was to be self-financing.

Current position

2. The recruitment of the new IGU team is nearly complete with the majority of key roles filled. The final recruitment boards should take place during the last two weeks of June. Large numbers of responses to fill these popular roles have led to lengthy sifts, therefore it is expected that there will be sufficient suitable candidates to fill all the outstanding posts.

3. Currently there are eight confirmed key new appointments with another two awaiting security clearance; representing approximately 85% of the increased establishment. Two posts await the interviews to be completed.

4. To ensure probity in its commercial exploitation of the MPS brand and assets, the IGU forms part of Procurement Services and has been co-located with procurement in Cobalt Square. This new, dedicated area will allow the IGU to establish each of the revenue streams in accordance with the approved 5-year strategy. All departments within the Resources Directorate are fully supporting the formation of the new IGU and are helping the team become operational. A short delay in equipment delivery and set up has resulted in minor slippage in the establishment of each of the new revenue streams.

Revenue streams

5. Since the beginning of the financial year, the IGU has started to develop each of the revenue streams in line with the 5-year strategy. Whilst there has been a continuing development of the general team infrastructure during the first quarter, there have been early delivery successes.

6. (B) OCU sponsorship continues to generate innovative but time-consuming initiatives. It is also responsible for corporate sponsorship and impacts on many of the other identified revenue streams. The potential sale of training is an area which is being developed to provide a positive financial contribution. To date (B)OCU sponsorship has produced approximately £273,000 against the first year’s (B)OCU sponsorship target of £929K, with a further £25,000 of benefit currently in the progress of delivery through to conclusion.

7. Clip sales and media broadcast is generating a heavy workload of positive enquiries and has started to produce initial revenues that point to a successful contribution. There will be significant benefit once the post is permanently filled which is expected to be by the end of June. To date approximately £20,000 has been generated against an annual target of £75,000. Data Protection issues may have an impact on the future expansion of this particular area. The team is therefore proceeding cautiously and working with the DPA, The Federation and other stakeholder groups.

8. Merchandising is awaiting the arrival of the Merchandising Manager, who should be joining the unit in July. Once in place a full programme of brand and product identification will be developed. This includes all licensing and merchandising opportunities to be implemented. To date there are licensing agreements in place for the highly publicised 12 inch action figures as well as a limited range of model cars. All royalties will count toward the joint target with Intellectual Property of £75,000

9. Events and conferences - The recently appointed Senior Events Manager is building up a database of MPS events/conferences planned to take place over the next 18 months and has begun a series of meetings with Heads of Departments/Directorates to raise awareness of the new events team and to also help identify areas for development within the events field. She has been working closely alongside the MPS external events contractor and sponsorship consultant to work towards a more co-ordinated, proactive approach to events management and sponsorship. A revised proforma is currently being produced that will ensure that MPS “clients” receive value for money in terms of events organisation. A series of internal training seminars is also in development and these will be open to any MPS staff likely to be involved in running events and conferences. To date Events have started with a very modest £4,000 in sponsorship against the full year target of £400K. We do however anticipate a rapid growth in Sponsorship in this area.

10. The Intellectual Property Manager has begun identifying commercially exploitable material from all areas including specialist units and whilst waiting for specialist equipment to arrive, has been working on creating a solution to archive, preserve and deliver photographic stills to produce revenues. In addition the IP Manager has begun to monitor media and other areas for unauthorised use of MPA IP. Revenues have started to be produced and to date we have identified around £3,000 in income generation against the target (joint with Merchandising) of £75,000. Additionally there is approximately £7,000 from various sources currently in negotiation from the publishing and broadcast of photographic material and the MPS image. The development of an archive will increase the commercial potential of this area. As previously mentioned, Data Protection issues may have an impact on the future of this area so again the unit proceeds cautiously.

11. Marketing has already identified that there is a need to ‘market’ the IGU and the services it can provide to the MPS. However there is also a need to balance this alongside managing expectation and demand until the final members of the team arrive. In the interim, the IGU Marketing Manager is ensuring that IGU involvement in projects is publicised in The Job newspaper and on the intranet site. There has also been media interest in a number of IGU projects including police action figures and the Keyholder Database. A press release and press strategy has been developed with the Press Bureau in DPA to cover all of these issues. Once the final members of the team are in place, it is proposed that there will be a more proactive marketing strategy, which will begin with a full-page article in The Job newspaper about the IGU. The Marketing Manager will work closely with all members of the IGU identifying proactive feature stories.

12. Larger projects that are currently ‘in play’ include Penates, the Keyholder database, this pan-London project is requiring close management attention and will continue to demand monitoring and management throughout its lifespan. The responsibility of this project will remain under the personal supervision of the Head of Sponsorship along with the new Income Generation Project Manager, who is now in place.

13. Other Projects include:

• MPS pay slip advertising. A large project that covers a period of one year and will provide revenues to support initiatives such as the Junior Citizen Handbook or similar in exchange for a message and a quarterly attachment to the monthly pay slip.
• Safer Surfing, which is a Met-wide awareness initiative, aimed at children using Internet chat rooms.
• LGBT (Lesbian, Gay, Bisexual, Transgender) reporting pack, which is a CD sized package containing various information pieces with a value of around £18,000. This initiative is set to spread further to include sex workers, Hate crime, Muslim, Jewish, and child protection information packs.
• The Bill action figures, which are 12 inch high ‘action man’ style figures, and retail for around £12.99 RRP in stores such as Hamleys. The MPS will benefit from a standard royalty (which averages approximately 20 pence per figure). This licensing agreement is set to produce reasonable revenues and positive PR.

Policy issues/summary

14. As interest levels rise in the commercial exploitation of the MPA IP assets the need to create effective guidelines and policy has become paramount when dealing with all involved parties. This includes internal MPS departments and the Data Protection Unit as well as private sector companies. This is an ongoing programme of work that will safeguard IP, identities, assets as well as the MPA and the MPS.

15. To date the new Income Generation Unit has started to employ the 5 year strategy, the implementation of a fully staffed and functional team are likely to be delayed slightly although this should not affect the final first year results. These delays are inevitable as nearly all the projects, initiatives, revenue streams and posts are new and very often involve techniques and methods that are generally unfamiliar to the MPS. Finding the common ground between private sector commercialism and the MPS often follows a time consuming and complex route but the positive contribution we are already seeing encourages perseverance.

C. Equality and diversity implications

1. Of the staff employed or about to be employed, 17% are from visible minority ethnic backgrounds (against an MPS average of 5.2%) and 60% are female (against an MPS average of 16.4%).

2. Any equality and diversity implications arising from individual projects will be addressed during the project development and will be reported separately to the Committee as required.

3. Members may care to note for example that considerations were flagged with the manufacturers of the action figures who welcomed the advice that Met officers were able to give and adjusted their productions accordingly. Although difficult to enforce by licensing contracts, this shows how the Mets statutory and wider responsibilities can have an influence beyond the organisation itself.

4. Some initiatives (e.g. the LGBT reporting pack) are specifically to support the Met’s wider equality work.

D. Financial implications

1. The financial implications of this report are highlighted within the report.

2. The Bill action figures, which are 12 inch high ‘action man’ style figures, and retail for around £12.99 RRP in stores such as Hamleys. The MPS will benefit from a standard royalty (which averages approximately 20 pence per figure). This licensing agreement is set to produce reasonable revenues and positive PR.

3. The total sponsorship in year target is £2.114m, this consists of £929,000 from larger projects such as Penates and the MPS payslip initiative and £933,000 from B(OCU) sponsorship.

Collectively ‘sponsorship’ has achieved £273,000 within the first 2 months, the larger projects are not yet in a position to be counted in these figures. This points toward an achievable first year target.

5. The Income Generation target is £150,000 this consists of £75,000 from I.P. and Merchandising and £75,000 from Clips and Broadcast Media but does not include any revenues from Penates. To date the collective revenue achieved figure is £30,000. Again the year 1 target should be achievable.

6. Given the self-funding nature of the IGU the Unit’s financial position is closely monitored with update reports being produced for the Income Generation Steering Group and of course future monitoring and progress reports to the Authority.

7. Nevertheless, the Unit's financial position is closely monitored. This is because of its self-funding nature. While costs to date are below budget, due to recruitment being slower and the Keyholder database launch being later, additional costs have been incurred. These are principally associated with the fact that the database is held by a third party, external to the Met's systems. Such difficulties required prioritising some DoI work (i.e. upgrading the secure internal Intranet gateway). As such, the Unit is currently in discussions with DoI to see if some costs can be charged to the 'Infrastructure' Workstream, rather than the 'Penates' Project. However, some abortive costs will be chargeable to the Project as will some unforeseen once-off IT costs. These will all need to be managed within the Unit's self-financing budget. A fuller update will be provided in a future IGU monitoring report.

E. Background papers

• Report 15, MPA Finance Committee, 24 October 2002

F. Contact details

Report author: Marcus Kendrick, Head of Sponsorship

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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