Agenda item

Re-alignment of Commercial Services company structure - Decision 12/07946


(1)       Mr Sweetland introduced a report which set out the proposed changes in the management, operation and company structure of Commercial Services following an independent review and consideration by the Governing Board for Commercial Services.  He introduced Mr McPherson, Managing Director of Commercial Services who gave details of the proposals.


(2)       Mr Sweetland and Mr McPherson answered questions and noted comments from Members which included the following:


  • Mr McPherson confirmed that Commercial Services generated £8k net profit per member of staff at no cost to the County Council or Council tax payers.
  • A Member emphasised the importance of some of the Directors on the Board being from the private sector.  Officers undertook to supply a copy of the company structure and details of the Directors to members of the Committee.
  • In relation to a question on profitability, Mr McPherson stated that LAZER made 1.5%, with reduced overall profitability, the other areas turned over 5% which was acceptable.
  • In response to a question on how the to ensure that there was no perceived advantage to Commercial Services in its dealings with the County Council, Mr McPherson stated that it was essential that the procurement process with KCC was seen to be fair and that there was no preferential procurement.  It was important that Value for Money (VFM) was demonstrated and that contracts were only awarded to Commercial Services Companies if they could demonstrate VFM.
  • The importance of making sure that Kent business knew that Commercial Services were competing with them on a level playing field was emphasised.
  • In relation to the purchase of green energy, Mr McPherson stated that it was not possible to buy green energy in Kent. 
  • Regarding the premises for Commercial Services, Mr McPherson stated that it was important that Commercial Services were located in premises that were separate from the County Council, negotiations were underway regarding premises with the aim of being as cost effective as possible.
  • The importance of there being more information about Commercial Services within the Budget Book was emphasised.


(3)       RESOLVED that:


(a)       the comments made by Members and the actions being taken to change and improve the management, governance and operations of Commercial Services be noted;

(b)       the Cabinet Committee endorse the decisions to be taken by the Cabinet Member for Environment, Highways and Waste, the     Cabinet Member for Business Strategy, Performance and Health Reform and the Corporate Director, Environment, Highways andWaste in relation to the formation of new companies; the transfer of existing KCC employees to such companies; and the entering into of all necessary leasehold and other agreements to give effect to these arrangements,  subject to the terms of the KCC Constitution and the Articles of Association of the Company, and

(c)        an update report on the Commercial Services Companies be submitted to the Committee in 6 months time.


(Post meeting note: it was agreed that a more appropriate time for the update report to be submitted to the Committee would be after Commercial Services End of Year report was available at the end of May).


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