City council seeks income boost through new trading company

The Executive Board at Leeds City Council is expected today to approve the establishment of a trading company with the potential to develop new income streams for the authority.

Civic Enterprise Leeds – comprising facilities management, the council’s business support centre and former commercial services – was set up as a group as a result of the authority’s Enabling Corporate Centre review. It has a turnover of £90m per annum and more than 3,000 staff.

It is now proposed to establish Civic Enterprise Leeds Ltd – a trading company, limited by shares and owned solely by the council – “to effect commercial trading opportunities which would be outside the power of the local authority”, according to a paper before the Executive Board.

The paper, which was prepared by the Deputy Chief Executive and the Chief Solicitor, said it was not envisaged that the company would contract with the council, nor that staff would transfer to it under TUPE to undertake current council work.

The Executive Board was also due to approve the governance and board membership arrangements for the company.

It was proposed that in the set up period there would be only one director, the chief officer for Civic Enterprise Leeds (who is directly accountable to the Deputy Chief Executive). A report determining board membership would be brought back to the Executive Board in July 2014.

The Deputy Chief Executive will approve commercial activity through the company, including approving business cases as and when required for the exercise of trading powers.

Cllr Keith Wakefield, Leader of Leeds City Council, said: “Despite the unprecedented financial challenges the council is facing we are determined to remain ambitious and visionary about the role public services play in our city. Having led the establishment of the Commission on the Future of Local Government last year, we in Leeds have been advocating a much more enterprising way of working – and this new company is good example of that.
 
“Local government has had a long history of enterprise, leadership and innovation. I want to recapture some of that spirit so that we help forge a stronger future for Leeds. This new company will allow a much more flexible way of working which will ultimately give us more capacity to support local employers and create local jobs. It builds on the existing success of a group of services brought together as Civic Enterprise Leeds."

He added: “We know these services can deliver – those involved currently have a turnover of £90m and employ 3,000 staff. The intention now is to expand those existing traded services. In the current climate we must work creatively to raise income if we are to maintain services within our communities.”