The Director of Resources introduced the report which had been agreed to be required to provide an annual business plan for consideration.
The background was set out in the executive summary:
The original proposal to buy Surestaff was based on four potential benefits:
· To have a reliable local provider of agency staff to WLDC
· To minimise the cost of managing suppliers within the Operational establishment (cost avoidance)
· To generate an income stream from charged in services
· To generate a shareholder return
The report provided an update on current performance and had the full business plan for the following three years attached.
The acquisition of Surestaff had proved to be a success from a business perspective, with a smooth re-entry into the market following the previous “winding down” of the agency. Losses were expected to be relatively small over the first two years with an overall benefit to the Council when recharged income, costs avoided and security of supply were taken into account. Over the longer term, these indirect benefits would be supplemented by a stream of positive profit contributions generated by the new venture.
A recent reforecast, compiled on a relatively prudent basis, illustrated the potential for a positive contribution resulting from a local enterprise which was already generating a social return for the local communities of WLDC.
Members sought assurance on the ethical aspect of the company, that agency staff were not exploited through desperation, nor being employed to replace permanent workers at a cheaper rate on zero hours contracts.
The Director of Resources reassured members that the Council’s own arrangements were to cover needs at particular, usually seasonal, times. Contracts were temporary rather than part-time, and staff were paid at similar rates to permanent staff. There was no evidence that agency staff were replacing permanent jobs, however as a shareholder he would raise this with the board.
It was acknowledged that agency work could be a route for individuals to get into work, and it could also suit some individuals to be temporary instead of permanent.
Note was made of the intention to not continue the employment of migrant workers for practical/ethical reasons.
Reference was made to the reduced gross margin prediction set out on page 10 of the report. The Director of Resources responded that whilst the profit margins were currently less than predicted, the intention was that there would be two companies, one of which would be TECKAL, which would enable services to be provided to other local authorities, and this would make a positive contribution to the bottom line of the Council and it was hoped for profit in year 3.
RESOLVED that the Business Plan be RECOMMENDED to Council, as the single shareholder, for agreement.