Agenda item

(a)  That a new company (name to be determined) limited by shares and wholly owned by the council be created.

(b)  That the arrangements for the new company satisfy the requirements of the Public Contracts Regulations 2015 (Regulation 12).

(c)  That the responsibility for delivery of services carried out by the existing Environment DSO be transferred to the new company.

(d)  That Council officers be instructed to work with the new company to increase the volume and value of work placed with the new company that is currently placed with other, external providers. In particular in the areas of highways and property maintenance.

(e)  That a service delivery agreement be created to set out, amongst other matters, the scope and performance levels provided by the new company.

(f)  That the employment and pension arrangements of the DSO staff transfer to the new company in accordance with, and subject to, the relevant legislation and council policy.

(g)  That the Chief Executive may transfer other staff to the new company in the future if it is the broader interests of the council to do so in accordance with, and subject to, the relevant legislation and council policy. In particular Highways functions may be considered for transfer to the Teckal company as part of wider public realm improvements.

(h)  That the Council provides the existing range of support services (eg finance, HR, commercial, property) to the new company unless and until the council and the new company agree otherwise.

(i)  That a service delivery agreement be created to set out, amongst other matters, the scope and performance levels of support services provided by the council and the appropriate charging regime.

(j)  That the new company would use its best endeavours to deliver the Business Plan.

(k)  That appropriate banking, transactional finance and payroll arrangements be put into place.

(l)  That a flexible credit facility of up to £1m be made available to the new company on terms to be agreed and with the authorisation of the Section 151 Officer.

(m)That appropriate governance arrangements are put in place in accordance with the council’s policies and relevant law (eg the Commercial Strategy and companies’ legislation).

(n)  That any further decision making required to complete these recommendations be delegated to the Chief Executive.

The Lead Member for Environment & Leisure and the Chief Executive introduced a report that sought approval to create a local authority trading company.  Appendix B in Part II of the agenda contained exempt financial information and was considered in resolving the matters in the Part I report.

It had been an aspiration to establish a local authority trading company of this kind when environmental services were brought back in house in 2017 but it had been decided to take an incremental approach by focusing on the core business of the DSO initially.  The company would be tasked to carry out the current functions of the Environment Direct Services Organisation (DSO) and use a Teckal exemption to trade, in order, to generate surpluses and / or reduce the overall overhead costs for the Council.

The Council had looked at the experiences of other authorities that had set up trading companies for such work and the lessons had been incorporated in the plans.  The company would be seeking to offer a trusted and quality range of environmental services.  The Cabinet agreed that the trading company had to the opportunity to generate income for the Council; provide a valuable chargeable service for residents; and help improve the quality of the public estate by carrying out additional works to a high standard.

Resolved –

(a)  That a new company (name to be determined) limited by shares and wholly owned by the council be created.

(b)  That the arrangements for the new company satisfy the requirements of the Public Contracts Regulations 2015 (Regulation 12).

(c)  That the responsibility for delivery of services carried out by the existing Environment DSO be transferred to the new company.

(d)  That Council officers be instructed to work with the new company to increase the volume and value of work placed with the new company that is currently placed with other, external providers. In particular in the areas of highways and property maintenance.

(e)  That a service delivery agreement be created to set out, amongst other matters, the scope and performance levels provided by the new company.

(f)  That the employment and pension arrangements of the DSO staff transfer to the new company in accordance with, and subject to, the relevant legislation and council policy.

(g)  That the Chief Executive may transfer other staff to the new company in the future if it is the broader interests of the council to do so in accordance with, and subject to, the relevant legislation and council policy. In particular Highways functions may be considered for transfer to the Teckal company as part of wider public realm improvements.

(h)  That the Council provides the existing range of support services (eg finance, HR, commercial, property) to the new company unless and until the council and the new company agree otherwise.

(i)  That a service delivery agreement be created to set out, amongst other matters, the scope and performance levels of support services provided by the council and the appropriate charging regime.

(j)  That the new company would use its best endeavours to deliver the Business Plan.

(k)  That appropriate banking, transactional finance and payroll arrangements be put into place.

(l)  That a flexible credit facility of up to £1m be made available to the new company on terms to be agreed and with the authorisation of the Section 151 Officer.

(m)That appropriate governance arrangements are put in place in accordance with the council’s policies and relevant law (eg the Commercial Strategy and companies’ legislation).

(n)  That any further decision making required to complete these recommendations be delegated to the Chief Executive.