Decision details

Cabinet considered the report and RESOLVED (unanimous) to:

1.    Note the ESPO Joint Cabinet Committee’s recommendation, following its meeting of 20 September 2017, to establish a new trading company ‘ESPO Trading Limited’;

2.    Approve the establishment of a new trading company, ‘ESPO Trading Limited’ on the basis outlined in this report; and

3.    Authorise the Chief Executive in consultation with the s151 Officer and Monitoring Officers to sign and complete on behalf of the Council such indemnities, agreements and documentation as she shall be required to enable the Council to become a shareholder in ESPO Trading Ltd.

ESPO was established as a joint committee set up in accordance with the Local Government Act 1972 and the Local Government Act 2000.  Its servicing authority, Leicestershire County Council, was limited to trading under powers in section 1 of the Local Authorities (Goods and Services) Act 1970 with a limited number of organisations defined as public bodies under that Act.

Member authorities of ESPO had the opportunity to explore alternative markets that were not public bodies, by using the powers under:-

(i)            Section 4 of the Localism Act 2011 and Section 95 of the Local Government Act 2003 to trade for profit, through the new separate company;

(ii)           Section 3 of the Localism Act 2011 and Section 93 of the Local Government Act 2000 to make a charge through the existing joint committee and servicing authority for goods and services to organisations other than those with which ESPO may trade by virtue of the Local Authority (Goods and Services) Act 1970.

By virtue of being able to trade with organisations in addition to public bodies, ESPO and the new Company would be able to secure ESPO’s position in an increasingly competitive market and deliver the growth and profit targets set by the ESPO Management Committee in its Medium Term Financial Strategy.

If the trading company was not incorporated there were no alternative ways for ESPO to access the new markets set out.