Issue - meetings

The Director of Resources introduced the report which sought approval for the establishment of a trading company to support the Council’s commercial activities primarily within Building Control.

West Lindsey District Council was developing a portfolio of commercial propositions based on both existing and new activities. Currently these activities were generating a modest level of income, but there was an ambition to build a number into significant revenue generating operations.

The report was considered by Corporate Policy and Resources Committee on 15 December 2016, the minute of which was appended to the report.

In order to maximise opportunity and revenue options the Council had already established a trading vehicle (WLDC Trading Ltd) to act as the group holding company across a range of commercial propositions.  As part of that group structure, approval was given to establish a series of companies limited by shares, for operations which had commercial opportunities.

As well as already undertaking a small number of commercial services for developers with the district, the Council had the opportunity of work for Building Control Commercial services outside of the District as part of a big development.  The Building Control Service was able to operate within the district of West Lindsey but to take full advantage of income generation from new services and to operate outside of the boundary, the Council would need to trade through a Subsidiary Trading Company.

A number of Councillors sought assurance that should there be a failure of a company there would be minimal risk to the Council finances and no risk to individual Councillors. The Director of Resources confirmed that all subsidiary companies were required to submit business plans on a regular basis and any possible failings should be foreseen.  Councillors themselves were indemnified against any risk, and financial implications would be limited to the specific companies.

Note Councillor White joined the meeting at this point.

Note The meeting adjourned at 20.30 due to a technical fault with the microphones, this could not be resolved immediately so the meeting reconvened at 20.56 without microphones or webcasting.

Note Councillor Strange and Councillor Rollings left the meeting at this point.

It was proposed that in order to give additional reassurance, the Corporate Policy and Resources Committee receive quarterly reports on the Trading Companies of the Council.  This was seconded and on being voted upon it was RESOLVED that this be added as a further recommendation.

The amended recommendations were then moved en bloc and on being seconded and voted upon it was RESOLVED that:

a)            approval be given for a subsidiary company of the Group Holding Company which will be a trading company (the trading arm) primarily for Building Control services to facilitate the return of profits to the Council which can be used to ensure the sustainable delivery of front line services;

b)            authority be delegated to the Corporate Policy and Resources Committee for approval of annual business plan and accounts as a subsidiary of the Group Holding Company;

c)            the Shareholder Agreement for the Building  ...  view the full minutes text for item 82

The Director of Resources reminded Members that a Trading Company group structure had been established some months previously, and this was the first of a number of forthcoming proposals.  It was proposed to hold a workshop for Members in the New Year to provide an understanding of how a Trading Company worked.

The Strategic Lead – Customer First described the success of the commercial agenda to date.  The Council was now looking to establish the second Company within the structure.

The Building Control Service had a number of commercial opportunities available to it; through associated surveying services and additional new energy services.  The Council produced and approved a business case for Building Control commercial operations through the Commercial Board.  Since that time the Unit had been undertaking relevant training in the energy related services; and was now ready to commence service delivery.

The Building Control Service was able to operate within the district of West Lindsey but to take full advantage of income generation from new services; and to operate outside of the Boundary, the Council would need to trade through a Subsidiary Trading Company.

Members welcomed the report and the proposals within it, and made suggestions for publicity.  It was hoped that the Trading Company would be launched by the end of February and be fully operational for the new financial year in April.

RESOLVED: that

a)    it be recommended to Council that approval be given to a subsidiary company of the Group Holding Company, which will be a trading company (the trading arm) for Building Control services to facilitate the return of profits to the Council which can be used to ensure the sustainable delivery of front line services;

b)    it be recommended to Council to delegate authority to the Committee for approval of annual business plan and accounts as a subsidiary of the Group Holding Company;

c)    it be recommended to Council that it approves the Shareholder Agreement for the Building Control Company;

d)    the Articles of Association for the new company, as previously approved for the Group Holding Company and its subsidiaries, be accepted;

e)    it be recommended to Council the nomination of the Chief Executive as Company Director for the new company;

f)     it be recommended to Council the nomination of the S151 Officer, (the Director of Resources) as the Council’s Shareholder representative; and

g)    authority be delegated to the Council’s Section 151 Officer and the appointed Director of the new company to agree the format and content of a Resourcing Agreement for the supply of services by the Council.