Agenda item

PART TWO  ITEMS WHICH MAY BE TAKEN IN THE ABSENCE OF THE PUBLIC AND PRESS ON THE GROUNDS THAT EXEMPT INFORMATION IS LIKELY TO BE DISCLOSED

 The Committee is therefore recommended to pass the following resolution:

“RESOLVED that under Section 100(A)(4) of the Local Government Act 1972, the public be excluded from the Meeting on the grounds that exempt information may be disclosed as defined in the paragraphs given in Part 3 of Schedule 12A to the Act.”       

HC 13             

The Leader presented a report that set out and commented on the findings of a detailed business case which had been prepared by PricewaterhouseCoopers (PWC) at the request of Members into the merits of establishing a local Authority Controlled Company (LACC).  The preparation of the business case followed the Council’s decision on 16^th February 2016 to establish a LACC subject to the further approval of a detailed business case and implementation plan.  In introducing the report, the Leader affirmed that Members must make a decision based on what was best for West Devon Borough Council.

He then introduced the representatives from PWC.  Following the introduction, Members asked a number of detailed questions to the representatives from PWC, the Council Solicitor and the Executive Directors.  The questions covered a range of issues such as the history of trading powers for local authorities, the impact of waste management services being transferred into the LACC, the estimated cost of additional work to progress the implementation of the LACC, how some questions could not be answered until the LACC had been set up, how the savings were calculated, how the value of the potential market had been evaluated, governance and the capacity of managers to take this forward.

During discussion, the following points were raised:

·         One Member raised a combination of concerns over set up costs, payback period, estimated operational costs, the difficulty of identifying the potential market and the projected level of profit.  He PROPOSED an amendment to the first recommendation that the decision to proceed with setting up a LACC be deferred.  This amendment was SECONDED but subsequently LOST, as Members felt the proposal should be recommended to full Council to enable all Members to have the opportunity to debate the proposal at that meeting;

·         Whilst some Members agreed that a LACC model relying was the right way forward, they also agreed that a market analysis was essential to provide them with further information in advance of making a decision at the full Council meeting on 26 July.  The Group Manager Commercial Services advised of an Informal Market Analysis Member Working Group that had been set up at South Hams District Council and invited West Devon Members to attend future meetings;

·         Some Members were positive about the proposal and felt that the Council should continue on this journey, although there were comments made that they did not feel they had sufficient information.

It was then RESOLVED that Council be RECOMMENDED:

1.  To proceed with the implementation of a Local Authority Controlled Company (LACC) jointly owned with South Hams District Council to commence trading on 1st April 2017, subject to there being a satisfactory outcome to the outstanding pension, tax and governance questions and actions as set out in paragraph 5.4 of the presented agenda report and market intelligence;

2.  That a Joint Steering Group (JSG) is established to deal with matters concerning the implementation of the LACC as detailed in paragraph 5.5 of the presented agenda report and terms of reference (as presented at Appendix B) be revised in light of Members’ comments;

3.  That, Subject to approval of recommendation 1 above, the Council enters into an external Waste Management arrangement; this arrangement will be subject to full affordability assessment, risk analysis and in compliance with Public Contract Regulations 2015, for a 2 year period with a view to waste services transferring to the LACC at the end of the 2 year period;

4.  That the Council proceeds to acquire the fleet required to satisfy the West Devon Waste specification as set out in Appendix D of the presented agenda report. If purchased, as opposed to leased, the cost of the fleet is to be financed through borrowing;

5.   That the Council approves the use of up to £127,500 of the 2016/17 budget surplus Earmarked Reserve for the set-up costs of the LACC as detailed in paragraph 5.8 of the presented agenda report.