Decision details

To agree that Adult Social Care may create a Local Authority Trading Company for day services and community support options

Part 2

·      That the creation of a Local Authority Trading Company (LATC) limited by shares and owned wholly by the Council to deliver the services within the scope of the report submitted be approved.

·      That authority be delegated to the Shareholder Board to approve the relevant steps set out in the report submitted to form the LATC, appoint its Directors and put in place appropriate governance arrangements to commence trading activities in April 2014.

·      That the award of a contract to the LATC for an initial five year period with a break point after three years to deliver the services in scope on behalf of the Council be approved.

·      That debt financing to the LATC be approved to enable it to purchase operational assets from the Council, pay for start-up costs and provide working capital, as set out in paragraph 42 of the report submitted.

·      That officers commence consultation with staff, Trade Unions, partner organisations and stakeholders.

Reasons for Decisions:

A LATC will deliver benefits to Surrey residents by ensuring the sustainability and continued improvement of existing services. It will also deliver financial benefits to the Council over the five year contract term, including those benefits which could not be obtained without setting up the LATC such as price reductions and surpluses derived from trading activity.

There is also potential to develop additional and alternative business opportunities - both within the services in scope, and by expanding into other areas - in the longer term, which could lead to substantial profits beyond the five year period covered by this proposal. These longer term gains would not be available if services remained in-house.

Trading on something close to an “as is” basis will ensure the continued stability and viability of existing services.  This LATC provides a relatively low-risk environment in which to establish and take forward the principles and practice of running a trading company, which could feed positively into the broader trading developments which are an integral part of the Council’s longer term financial strategy.