The First Year of a LATCo: Why Talent Decisions Make or Break Success

The first year of a Local Authority Trading Company (LATCo) is often the most important. It’s the period where ambition meets reality, where new ways of working are tested, and where early decisions start to shape what the organisation will become. While governance, systems and finances all matter, it’s talent decisions that tend to have the longest lasting impact.

LATCos are no longer rare. Research by UNISON shows that over 60 % of UK councils now own at least one trading company, and councils have established more than 850 such companies across the country. In many cases, these companies deliver services such as housing, leisure, waste and social care, and employ large numbers of staff.

One of the most common challenges in launch-phase LATCos is assuming that roles will look and feel much like their council equivalents. On paper, job titles may be familiar. In practice, the difference can be significant.

LATCo roles often come with a faster pace, broader responsibility, and a sharper focus on delivery. Decision-making is closer to the front line. Risk feels more immediate. Leaders are often asked to balance commercial discipline with public service values, sometimes for the first time.

When roles aren’t clearly shaped for this new context, even strong candidates can struggle. People can find themselves unclear on priorities, unsure where authority sits, or stretched across too many demands at once, not because they lack capability, but because the role itself hasn’t been properly defined.

At Tile Hill, we work closely with councils and LATCos at the point where these roles are being defined, not just filled. One of the most valuable conversations we have early on is about what success actually looks like in year one, not year five. That clarity can make the difference between someone thriving or feeling overwhelmed.

Early recruitment decisions do more than fill vacancies. They set the tone. The first leaders and managers model behaviours, shape culture, and quietly establish what “good” looks like. If expectations around pace, accountability or collaboration are unclear, those gaps tend to harden quickly into habits.

Another pattern we often see is leaders being asked to “grow into” roles. Development is important, but growth works best when it’s supported. Without clear priorities, decision-making space and the right backing, even very experienced people can feel exposed. In a start-up environment, that pressure is amplified.

Retention risk is at its highest in the first 12–18 months. This isn’t usually because people can’t do the job. More often, it’s because the reality of the role doesn’t match what they expected. When that happens, the cost goes well beyond recruitment fees. Momentum slows, confidence dips, and teams are asked to absorb yet another period of change.

Through our work supporting LATCos, from early leadership appointments through to interim and specialist support, we see the same lesson repeated: clarity upfront saves time, money, and energy later. Being clear about what the role really involves, what support is available, and where the organisation is still finding its feet builds trust from the outset.

Getting early recruitment right doesn’t mean having all the answers. It means asking the right questions early, shaping roles with intent, and recognising that the first year is about building strong foundations as much as delivering outcomes.

LATCos that invest time in their people decisions at the start are far better placed to succeed in the long run. The first year sets the pattern and talent is where that pattern is most often made or broken.

As more councils turn to LATCos to deliver essential services, the organisations that thrive will be those that treat early recruitment as a strategic decision, not an administrative one. Getting the right people, in the right roles, with the right support isn’t just about filling gaps, it’s about creating the conditions for long-term success and giving the LATCo the stable foundation it needs to grow with confidence.