Agenda item

The Director of Resources noted that as the Commercial Director was on leave and had submitted apologies for the meeting he would update the Committee.

Following the acquisition of SureStaff the purpose of the report was to consider the establishment of a group of trading companies to support the Council’s commercial activities.

The report set out the proposed structure and management and set out clarity regarding shareholders, removing conflicts of interest wherever possible.  Advice had been taken from KPMG.

Initially the companies in the group structure would be configured as a

‘Teckal’ company (WLDC Staffing Services Ltd). This would enable the company to trade directly with the council, and potentially other public sector bodies. A Teckal company would provide Services to the Council and other legal persons controlled by the Council (within the meaning of regulation 12 of the Public Contracts Regulations 2015) in accordance with any business plan then in force and on terms agreed between the Teckal Company and the Council.

Once a group holding company was established with approved Articles of

Association and Shareholder agreement, any future subsidiaries that the

Council be created through a ‘Deed of Adherence’.  In essence, this meant that any subsidiary companies will be bound by the approved Articles and Shareholder agreement. This did not preclude the Council from establishing other companies or Special Purpose Vehicles outside this structure.

Some Members of the Committee spoke as members of the Council’s Commercial Steering Group and agreed that the project was a good idea.  It was questioned whether Members would see management accounts.  The Director of Resources stated that as a non-executive Director he would see the accounts and would present a summary to the Committee as part of the Annual Business Plan.

Members welcomed the start of a new era and new way of working for the Council, following changes to Government legislation.  It was acknowledged that it was a balancing act to give freedom to act whist maintaining supervision, but Members were satisfied that the model was robust.

Discussion ensued as to whether it would be feasible for a Councillor to be a representative on the board, whether the Chief Executive was an appropriate appointment, or whether an independent person should be appointed.

Councillor McNeill proposed an additional recommendation that an independent person be appointed.  It was noted that the Council already had a number of independent persons appointed, particularly those lay members on the Governance and Audit Committee.  It was noted however that this would incur additional costs not accounted for.  But Members felt that it would add objectivity, independence and robust scrutiny.

It was moved and seconded and on being voted upon it was RESOLVED that a further recommendation be added to authorise the appointment of a suitable independent person as a non-executive Director in time for the Company’s second AGM.

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

RESOLVED that:

a)    it be recommended for Council approval the proposed group structure for trading companies (the trading arm) 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 that Council delegates authority to the Committee for approval of annual business plans and accounts for the Group Holding Company and its individual subsidiaries;

c)    it be recommended to Council that it approves the Shareholder Agreement for the Group Holding Company and its associated subsidiaries;

d)    it be recommended to Council that it approves the Articles of Association for the Group Holding Company and its associated subsidiaries;

e)    it be recommended to Council the nomination of the Commercial Director as Company Director and Chief Executive as Non-Executive Director for the Group Holding Company (WLDC Trading Ltd) and its Sure Staff subsidiaries (Sure Staff Lincs Ltd and WLDC Staffing Services Ltd);

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

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

h)   it be recommended to Council authority to appoint a suitable independent person as a non-executive Director in time for the second AGM.