Issue - meetings

Background:

This report provided details of proposals to create a traded service for the delivery of category management services. The report gave details of six potential models and recommended the establishment of a Local Authority Trading Company as a subsidiary of Medway Commercial Group (MCG).

This would enable the combined team to attract external customers across the region. It was stated that MCG already had financial accounts, governance arrangements, policies, procedures and systems to meet commissioners’ requirements for compliance, governance and deliverability.

The report stated that a Diversity Impact Assessment (DIA) screening would not be undertaken as part of the implementation process as the service did not affect front line services.

An exempt appendix set out the outline business case, options appraisal and detailed business case.

Reasons:

As the council moves into future years, the budgets for services are becoming increasingly difficult to maintain for statutory services. The opportunity to allow the Category Management team to trade externally and deliver its primary pipeline internally, will allow for the team costs to become neutral over time, and an income being brought back to the council that it did not have before.

Medway Commercial Group is an established Medway Council owned trading company that will provide the most efficient way of delivering traded procurement services.

This ownership model allows for any surplus or dividend arising from its success to be paid back to a Council for further investment in services or to facilitate savings. This dual element of control (through contract and through governance) allows flexibility, but lowers risk in terms of strategic alignment.