Agenda item

The Waste and Environment Manager, Nicholas Hannon, introduced an update report on the progress that had been made since the decision taken by Cabinet in September 2016 to insource the Environmental Services contract through the establishment of a Local Authority Controlled Company (LACC).  Cabinet approval would be sought to establish a wholly owned company limited by shares with a Teckal exemption that would be classified as a local authority controlled company.  Members noted the governance arrangements, management responsibilities and proposed organisational structure for both the Council and the LACC.

Members raised a number of issues including whether any other authorities had any similar arrangements; the likely financial benefits of insourcing; the specific roles of the ‘Financial Director’ and ‘Operational Director’; and the management of risks and conflicts of interest.  In response, the Committee noted that Hounslow had recently set up a Teckal company and the ability to exploit commercial opportunities was intended to deliver financial benefits to the Council.  There would be a conflict of interest protocol and the relevant insurances would be put in place to provide the necessary protection.  The Committee was assured that risk management had been a key consideration in developing the approach to issues including health and safety, human resources and finance.

Members asked how the new arrangements would provide better control over the services provided to residents and performance management.  It was noted that a draft specification of services had been prepared and the importance of enhancing the quality of services was recognised.  A specific issue was raised about fly-tipping and it was confirmed that an indicator would be built into the performance monitoring process.  In relation to the risk that service standards could dip towards the end of the existing contract, Members were asked to raise any specific concerns with officers.

Councillors Amarpreet Dhaliwal and Bains addressed the Committee under Rule 30 and raised several issues in relation to the governance arrangements, the role of the Audit & Corporate Governance Committee and speed at which the company was being established.  Councillor Bains commented that the scale of the task to insource in terms of health and safety, pensions and financial risk was being underestimated. He also asked whether there would be an employee representative on the LACC Board.  Following a query, Councillor Bains stated that he no longer worked for the current service provider, Amey.  Mr Hannon responded to each of the points raised and confirmed that the governance arrangements had been carefully considered and had been developed having conducted the necessary due diligence.  The suggestion to appoint an employee representative to the Board would be considered. Further reports would be provided to Members on other aspects of the insourcing in the coming months.

At the conclusion of the discussion, the Committee noted the governance arrangements, responsibilities for management of the company and that a company limited by shares was considered to be the most appropriate vehicle.

Resolved –  That details of the proposed governance arrangements and responsibilities for management of the Local Authority Controlled Company and proposed organisational structure both for the Council and LACC be noted.