REPORT OF THE SERVICE DIRECTOR – COMMERCIAL
To receive a verbal presentation from Steve Crowley, Service Director – Commercial.
Decision:
Following the Part 1 discussion the Chairman of the Overview and Scrutiny Committee moved the meeting into Part II discussion.
RESOLVED: That the Service Director – Commercial present a written report to the next meeting of the Overview and Scrutiny Committee, which should provide the following information:
(1) The work of the Commercial Team;
(2) The essential provision of future forecasting; and
(3) Potential uses of “The Company”.
REASON FOR DECISION: To allow the Overview and Scrutiny Committee to comment on the work of the Commercial Team.
Minutes:
Audio Recording – Start of Item - 1 Hour 7 Minutes 20 Minutes
The Service Director – Commercial thanked the Chairman and Members for the opportunity to address the Overview and Scrutiny Committee and stated that he would provide information which would look at the Commercial Strategy and what had been done since the strategy had been adopted in January 2019. He updated Members as follows:
· The 3 key themes that had been set out:
(i) Culture;
(ii) Business Improvements; and
(iii) Investment and Opportunities
· The Commercial Team had been fully established as at the end of May 2019 and consisted of:
· A Commercial Manager
· A newly appointed Commercial Officer; and
· Two new Commercial Support Officers
· The Service Director – Commercial had been working closely with the Executive Member, Deputy Executive Member and Shadow Executive Members to discuss opportunities that the Commercial Team were looking to explore.
The First Task of the Commercial Launch was to ensure that all Members and Staff were made aware of their goal in terms of what they were setting out to achieve, this had included:
· An internet page;
· Specific email address for investment ideas;
· Ideas notice board;
· Posters; and
· Screen Savers
To ensure that everyone was aware of the aspiration to deliver through the strategy:
· The Service Director – Commercial had attended all of the department team meetings to brief all managers on purpose.
· Commercial officers had briefed all other staff.
· On 18 September a coffee morning in the staff canteen would take place in order to provide both staff and members the opportunity to meet the Commercial Team, ask questions and explore ideas.
· Staff had been made aware of a newly formed Commercial Group which would explore ideas in order to generate additional income. The group would be officer based and not established for managers or senior managers.
Selling our Services:
The Service Director – Commercial informed Members that this was still in it’s early exploratory stages but stated that the Council already sold both legal and IT services, but there was on-going investigation into how more could be made from those opportunities. He further stated that they were waiting for new contracts to be brought forward, in order to be in a position to place a bid for business.
Commercial Awareness Training
All of the senior management team had been provided with Webinars which focused on Commercialisation within local government. Updates had been provided to the senior management team on work being carried out both internally and externally by The Service Director – Commercial.
A Training Programme had been drafted and was close to completion, a half day training programme would be provided to all Senior Managers and Councillors. Further training would subsequently be provided to the rest of the organisation by The Service Director – Commercial and the Commercial Manager which would target the specific requirement of NHDC.
To fully understand obligation and role, Director Training would be provided to those concerned in November 2019.
Holding Company
A draft business case had been set up with all of the associated documents. Financial modelling had to be based on the capital available to spend on projects that had been identified. The financial modelling was not positive, the company would not make a profit until the end of year ten and only if the assets were sold. Harkness Court and Town Lodge had been identified as financially viable schemes in their own right, however, if they were to be moved into the company, repayment of the loan would be required and was therefore deemed unviable.
Other opportunities were now being explored to ensure financial gain before setting up a new company.
Harkness Court – Old Care Line Building that would be turned into flats, was behind schedule, however, it was hoped that completion would be at the end of the financial year or the end of April 2020. The options, on completion, would be to transfer the property to the company, sell the property or let out the apartments via the Council
Property Strategy and Asset Management Strategy
On target to complete by March 2020. A draft strategy that focused on the Commercial Investment Opportunities. Mainly looking to pursue investment in mainly land, buildings, renewable energy and leisure sites, however other opportunities would not be excluded. On completion, the draft strategy would be presented to Executive Members.
The Service Director – Commercial informed Members that business cases were being investigated and stated that a gross 7 to 8 percent Return On Investment, (ROI) was the target. Opportunities had been explored, but the ROI had been too low.
The Service Director – Commercial reported on other Council’s large scale investment.
The Service Director – Commercial stated that the rental of the second floor of the District Council Offices in Letchworth was very close to being finalised. Several meetings had taken place with the Biggleswade Company that were looking to relocate and all of the heads of terms had been agreed, it was now just the matter of signing the contract.
Audio Recording - 1 hour 26 minutes 50 seconds (8.56pm)
At this point the Chairman of the Overview and Scrutiny Committee moved the meeting into Part II discussion, (see Minute 48).
RESOLVED: That the Service Director – Commercial present a written report to the next meeting of the Overview and Scrutiny Committee, which should provide the following information:
(1) The work of the Commercial Team;
(2) The essential provision of future forecasting; and
(3) Potential uses of “The Company”.
REASON FOR DECISION: To allow the Overview and Scrutiny Committee to comment on the work of the Commercial Team.