Agenda item

Compass Point Business Services Options

To consider the actions necessary to implement the preferred option for the future of Compass Point Business Services (“CPBS”) (report of the Deputy Leader of the Council and Deputy Leader of the Cabinet is to follow.)

 

Minutes:

Councillors gave consideration to a report by the Deputy Leader of the Council and Deputy Leader of the Cabinet setting out proposed actions to implement the preferred option for the future of Compass Point Business Services (CPBS).

 

It was noted that on 1 November 2017, the Council considered a report from the Deputy Leaders which set out future options for CPBS. The options, identified by Grant Thornton on behalf of this Council and East Lindsey District Council, were:

 

a.            To continue the company arrangement as currently in place

b.            To continue the arrangement and consider any recommendations to update the arrangements and further improve outcomes

c.            To disestablish the company and consider an alternative shared service model of provision.

 

Council approved (b) above. This option would therefore see the company continue to deliver the contracted services to both councils, but would also see a number of changes to the way the company is operated and managed:

 

·                     Governance changes in terms of board membership and how the councils engage with the company at both strategic and operational levels

·                     Changes to organisational design intended to drive efficiencies and reduce the cost base of the company.

·                     Working capital injection which will tie in closely with the organisational design work mentioned above.

 

East Lindsey District Council had also approved option (b) at 1.1 above. Since the Council meeting in November, senior members and senior officers of both councils had met to discuss next steps.

 

Councillors agreed a proposed approach based upon those discussions which took into consideration:

 

·         Governance Changes

·         Organisational Design

·         Capital Investment

·         Contract Extension

In discussing the report, Councillors referred to recommendation 5a – the appointment of two non-voting advisors – and requested that these appointments be approved by shareholders.

 

 

 

DECISION:

 

1)    That, subject to (3) and (4) below, and subject to the agreement of the CPBS Board and East Lindsey District Council, the contractual arrangements with CPBS and East Lindsey District Council be terminated and new contractual arrangements be entered into  for an initial period of five years from 31 July 2018, with an option to extend for a further five years;

 

2)    That Council notes the Leader’s decision that Eversheds be instructed to prepare the necessary paperwork (including changes to the Shareholder Agreement) to effect the extension and any other necessary changes as a result of this and any subsequent decisions of the Council;

3)    That in accordance with the Grant Thornton reports CPBS be required to deliver a level of efficiency savings, and resulting reduced cost base, to the satisfaction of both councils;

4)    That CPBS be required to submit a business case for transformation, by 31 May 2018, for consideration by both councils;

5)    That, from 31 July 2018, the governance arrangements be amended by:

a.    the addition of two non-voting advisors (finance and strategy) to the Company Board and that these appointments be approved by shareholders;

b.    the establishment of a Partnership Group, comprising the appropriate portfolio holders from both councils, and supported by senior officers, to consider key strategic issues from the councils’ perspectives;

c.    the establishment of Joint SHDC and ELDC Client Officer meetings (and the CPBS Head of Operations where required) to ensure consistency at an operational level, with any intractable issues escalated to the Partnership Group;

 

6)    That the Terms of Reference for the Partnership Group and the Joint Client Officer meetings be approved as per the appendix to the report;

 

7)    That Council notes the Leader’s decision that the Head of the paid Service be replaced on the Board with effect from 31 July 2018 by the Executive Director for Place; and

 

8)    That, going forward, no statutory officer shall be appointed to the Board of Directors.

Supporting documents: