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Agenda Item No

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Economy and Environment): 16th May 2013

 

Report of the Director for Development Services

 

Restructure of the Training Service: Bike Repair Facility

 

Purpose of the Report

1.             To consider the recent closure decision in respect of the bike repair facility at Holm View Leisure Centre, at the request of Councillor Bertin.

Recommendations

That the report is noted.

 

Reasons for the Recommendations

To apprise committee.

 

Background

2.             Until mid 2012 the Employment Training Unit was managed by the former Lifelong Learning Directorate.  The Unit had delivered a range of training and employment programmes such as New Deal and the future Jobs Fund, but at that time was delivering the Work Programme only, on contract.  This Programme supported and advised a wide range of groups who had been unemployed in excess of a year and sought employment opportunities.  Although set up to be cost neutral based on expected income, at that time a £200k annual deficit was forecast.

3.             The management of the Unit was then passed to the Directorate of Development Services, within the Economic Development Unit.  Faced with such a deficit an immediate review was initiated.

4.             For historic reasons, based on previous programmes, the Unit encompassed a bike repair facility.  This had been established to provide work experience opportunities in previous programmes but had continued to operate after these programmes had ended.  It was contributing no outcomes to the Work Programme, and was operating at very substantial losses.  The cycle shop had a full time supervisor, a (vacant) assistant post and substantial building and other overheads. 

5.             The Unit was restructured, merged with the Business Support team, and refocused towards real employment outcomes for the long term unemployed clients.  The cycle shop was closed as it did not achieve accredited training outcomes and was running at a substantial deficit.

Relevant Issues and Options

6.             To my knowledge, cycle repair has not been identified as an area with a paucity of training provision.  In any case, the cycle shop provided little training and no formally accredited provision at all.  Its role was to provide work experience opportunities under previous programmes.  Hence, I cannot identify any source of 'training' funds to continue subsidising such a facility.  The request for consideration refers to Barry Regeneration Area funds, but these are Capital and the cycle facility requires revenue support.  Similarly the Communities First Delivery Plan has been agreed and funded until 2015 and does not have provision for this type of activity under any of its programmes.

7.             A small number of people benefited from the heavily subsidised cycle repair service provided by the facility, essentially it could be considered to be a retail business.  The service was thus in effect a subsidised service that could undermine the position of other local businesses.

8.             The council does not normally provide retail services.  Neither does the Council normally provide ongoing revenue subsidies for retail services delivered by private organisations.  Such subsidies would be subject to stringent European State Aid rules.  Consideration of whether the Council should deliver or support subsidised retail services needs to be given in this context.  A scheme to support subsidised retail services needs to give consideration to the effect on private sector suppliers of competing services.  It should also consider the choice of sectors to be supported, and I can find no justification to recommend supporting one narrow commercial sector, cycle repair, in isolation, at the cost of numerous commercial suppliers of this type of service already in existence, and of course the job security of their employees.

9.             Furthermore, in times of limited and shrinking public resources, the provision of a subsidy to this facility needs to be considered against the alternative possible uses of such resources.  Based on turnover and overhead costs prior to closure, the shop would require an annual subsidy in excess of £40,000.  As stated above, it is important to question why the Council would subsidise the repair of cycles and the sale of second hand cycles when there are numerous private suppliers servicing Barry which are easily accessible. 

Resource Implications (Financial and Employment)

10.        Staff displaced as a result of the restructure are following the Council's 'Avoiding Redundancy' procedure, including exploration of redeployment options as appropriate.

Sustainability and Climate Change Implications

11.        The changes to the delivery of the Work Programme aim to focus on sustained employment in unsubsidised jobs.

Legal Implications (to Include Human Rights Implications)

12.        There are a number of employment law implications resulting from the restructure and advice is being sought as required.

Crime and Disorder Implications

13.        There are no crime and disorder implications resulting from this report.

Equal Opportunities Implications (to include Welsh Language issues)

14.        An Equalities Impact Assessment has been completed for the restructure, indentifying no significant implications.

Corporate/Service Objectives

15.        It is a Corporate Plan Objective to encourage economic growth and widen employment opportunities.

Policy Framework and Budget

16.        The report is for information only.

Consultation (including Ward Member Consultation)

17.        Ward Members for Gibbonsdown have been consulted and any comments received can be considered verbally at the meeting.  The restructure of the unit was subject to extensive informal and formal consultation including staff and recognised Trade Unions.

Background Papers

Business Case for the Training Unit restructure 2012.

 

Contact Officer

Bob Guy, Operational Manager, Countryside and Economic Projects

 

Officers Consulted

Legal Services (Committee Reports)

Principal Accountant

Operational Manager, Human Resources

Principal Business and Employment Officer  

 

Responsible Officer:

Rob Thomas, Director of Development Services

 

 

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