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Agenda Item No. 5











Cabinet was provided with an update regarding the Reshaping Services Catering Project and the intended creation of the Council’s first Local Authority Trading Company (‘LATC’).


The Catering Service was identified as a Tranche 1 project as part of the Council’s Reshaping Services Programme with total required savings of £347,000. All savings were achieved in October 2015 through cost-saving measures and the principle aim of the project then changed to focus on the sustainability of services for the future, in light of reduced budgets.


Three key objectives were set in respect of the following:


•      To identify and implement the most suitable service delivery model for the Catering Service

•      To create an efficient service that is able to adapt to future financial challenges

•      To capture opportunities to increase uptake and promote healthy school meals


In April 2017, Cabinet approved the business plan which was based upon the proposed creation of a LATC for the delivery of Catering Services. This model was deemed to be the most sustainable, following a robust options appraisal which evaluated a range of options for the future of the Catering Service to meet the above objectives. The Cabinet Report containing the business plans and options appraisal, was attached at Appendix 1 to the report.


A number of activities had taken place since April 2017 in line with the business plan and associated Short Term Strategy, which outlined the Council’s aspirations for the first two years (‘the transition phase’). 


The Short Term Strategy outlined in the business plan for the development of the LATC aimed to:


•      Facilitate cultural change and staff ‘buy-in’ across both the service and wider Council;

•      Establish a new brand and identity across the service;

•      Implement opportunities to increase meal uptake;

•      To establish a shared understanding of commercialisation as it relates to the aims of the LATC by developing a bespoke training plan and supporting staff through the transition;

•      Further develop commercial business plans to be implemented in the next phase as outlined in the business plan.


The Council had created an Income Generation and Commercial Opportunities Strategy, which aimed to support the delivery of Strong Communities with a Bright Future through the development and implementation of a range of income generation and commercial opportunities, that would complement other sources of funding. The strategy formed part of the Council’s Reshaping Services Programme.


A Programme Board met on a monthly basis to consider and prioritise commercial opportunities across the authority of which the Catering Project formed part of the programme of work. It should be noted that one of the objectives of the LATC was that all profits would be reinvested to develop the company and the schools that used the service, rather than generating income for the Council. As the Council intended to establish the LATC as a "Teckal" company, in accordance with the requirements of the Public Contracts Regulations 2015 ('PCR15') this would enable the Council to enter into public contracts directly with the LATC, without the need for prior procurement under the PCR15.  It was intended that the company would become self-sufficient by trading up to the Teckal value with the external market.


Work was underway to determine how the LATC would engage with the Council and to review how the client/contractor relationship would work both on a Council wide level and with individual service areas. During the next phase of implementation, an assessment would be made as to how ready the Council was to provide services externally. This would be considered in the context of the intention included in the business plan for the LATC to use Council services for the first three years of trading.


As part of the above piece of work, central recharges would be considered and that discussions would take place around whether these charges should apply to a Council company providing a statutory provision on behalf of the Local Authority and if so, how these charges compared to external options and any internal implications which may arise as a result of any possible changes to arrangements. 


During June 2018, an external gateway review of the Catering Project was undertaken by a company called CCo (who are part of CIPFA). The review approach was to conduct an initial ‘desktop’ review of project documentation and to discuss key elements of the project during an on-site period. The assessment was undertaken using an established, evidence-based model for local government ‘spin outs’ that considered implications and responsibilities for governance, Human Resources; ICT; Legal; Finance; together with arrangements for the buyback of Council services.


The key findings of the review were that the project was still deliverable but would require a structured project plan with clear priorities and accountability for the delivery of actions, the clear commitment of the wider organisation to the project’s priority status, the designation and freeing up of appropriate resource to support the delivery of the project and the recognition and remediation of the Council’s commercial knowledge and skills gaps.


The recommendations from the CCo review were a focus for the project team going forward and had been incorporated into the implementation plan to ensure they remained a priority.


The project was being governed by the Project Sponsor acting as a liaison between the Project Team and the Income Generation and Commercial Opportunities Programme Board who meet on a monthly basis. The Income Generation and Commercial Opportunities Programme Board was a programme of work, which formed part of the Council's Reshaping Services Programme. It was intended that as the project progressed this continued as the formal mechanism for reporting project progress, as it ensured all key stakeholders were represented and updated.


Governance arrangements for the LATC were currently being considered as part of the project. Initial proposals were that the Board of Directors for the company would constitute seven members including an Independent Chair, a Primary School representative, a Secondary School representative, one Officer, one Member, the Managing Director of the LATC and an Industry Expert, as it had been recognised that there was a need for expert advice in regard to external trading.


A full equality impact assessment (‘EIA’) had been undertaken which had due regard to the protected characteristics shared within schools for both staff and pupils. This document was attached at Appendix 2 to the report. It concluded  that the creation of a LATC would have a neutral impact on the protected characteristics shared within the service which would continue to comply with Section 512 of the Education Act 1996 (LEA functions concerning the provision of school meals).  Any changes to this function would be reported in a timely manner to Cabinet.


This was a matter for Executive decision




(1)       T H A T the update on the Reshaping Services Catering Project provided, which formed part of the Council’s overall Reshaping Services Programme and the creation of the Council’s first Local Authority Trading Company be noted.


(2)       T H A T a further update report be brought to Cabinet in March 2019 to report on progress and readiness to trade as a Local Authority Trading Company for the provision of Catering Services.


(3)       T H A T the report be referred to the Scrutiny Committee (Learning and Culture) for its consideration.


Reasons for decisions


(1)       To note the update on the development of proposals for the Catering Service (minute C3547 refers) and to comply with the following resolutions made by Cabinet on the 24 April 2017:


•           That the contents of the report, which addresses the issues raised during the on-going consultation relating to the Reshaping Services Catering Project, be noted.

•           That the proposals contained in the business plan (attached at Appendix C of Appendix 1 to the report) to create a LATC as outlined in the report, be approved.

•           That subject to resolution two above, the implementation plan as outlined in the report and the proposed creation of a LA in Year 3 as referred to in the business plan as set out in Appendix 1 attached to the report, be approved.

•           That subject to resolutions two and three above, delegated authority be granted to the Director of Learning & Skills, in consultation with the Leader, Cabinet Member for Regeneration & Education and Managing Director to:


          -  Undertake the necessary consultation and engagement activity as described in the report;

          -  Respond as appropriate to any points raised as part of the engagement and      consultation process;

          -  Report back to Cabinet any material changes to the proposals resulting from the consultation process; and

          -  Progress the implementation of the proposals following conclusion of all necessary consultation and engagement activity.

•          That Cabinet receive a further report detailing the progress made following implementation of the first year of the business plan, including progress made against the actions taken; and to take account of any changes required to the underpinning assumptions made as implementation progresses and further the setting out of proposals related to the governance arrangements of the proposed company.


(2)       To ensure that Cabinet was satisfied that all necessary work had been undertaken to allow the LATC to begin trading for the provision of Catering Services.


(3)       The Scrutiny Committee (Learning and Culture) had requested an update on progress.





Attached as Appendix – Report to Cabinet – 3 SEPTEMBER 2018