Finalisation of lease and licensing agreements with the LATCo covering the LATCo companies’ occupation of relevant Council premises and use of Council resources.

The Executive Director, Sustainable City, had submitted a report which reported back on the establishment of the Local Authority Trading Companies.

The Chief Executive introduced the report which had been trailed in the last report on this subject to the Board in July.  The report set out the measures in place and proposed to enable both companies to move from their embryonic state to start trading in April 2018.

In discussion the following points emerged.  It was anticipated that the Shareholder would meet twice a year (the first meeting would be in December 2017).  The two companies’ meetings, would be held consecutively on the same day. Lease arrangements between the Council and the companies would echo those in place for Fusion.

It was recognised that formation of the companies would mean the transfer of a very significant proportion of Council colleagues to the companies. Members were pleased to note that the Memorandum of Understanding (MOU) made it clear that: “…their [the companies] primary reason for existence is to serve the requirements of the Council.” Members were also pleased to note that the MOU noted the companies’:  “Continuing adoption and promoting of the vision and values and behaviours imported from our shareholder.”

The Chief Executive, with reference to the other Council companies, said he envisaged them as a family of organisations with shared objectives.

In relation to pension arrangements, the report made clear that the LGPS would be available to staff for the time being. The Managing Director for Oxford Direct Services said that he would want to discuss subsequent arrangements with the unions in due course, looking to make arrangements that were best overall for the business. He said that he saw himself as the chief custodian of the Council’s values, recognising that, over time, company employees would identify less and less with the Council.

Support services from the Council for the companies will be important. Initially they will be based on current cost allocations alongside a recognition that the arrangements will have, ultimately, to be on a commercial footing. In the event of disagreement over recharges, the final arbiter will be the Chief Executive.

The City Executive Board resolved to :

1)         Agree the “Transfer Date” of 1 April 2018 – that being the date on which all service delivery currently carried out by the Council’s Direct Services will be transferred to the two new LATCo companies;

2)         Approve the terms of the updated Memorandum of Understanding (as attached to this report as Appendix 1) which sets out the basis of the “Service” and “Support” contracts between the Council and LATCo companies; and delegate authority to the Interim Chief Executive, in consultation with the Council’s s151 and Monitoring Officers and the Leader of the Council to finalise the terms of and to enter into both the Service Contract and the Support Contract on behalf of the Council;

3)         Delegate authority to the Interim Chief Executive, in consultation with the Council’s s151 and Monitoring Officers,  to approve the terms under which the Council will enter into leases and/or licences covering the LATCo companies’ occupation of relevant Council premises and use of Council resources;

4)         Agree the transfer to Oxford Direct Services Limited on the Transfer Date of all Direct Services staff engaged in service delivery immediately prior to the Transfer Date on the terms set out in this report;

5)         Approve the arrangements ensuring that all transferring staff will continue to have access to the Local Government Pension Scheme and delegate authority to the Interim Chief Executive, in consultation with the Council’s s151 and Monitoring Officers and the Leader of the Council, on behalf of the Council, to enter into an appropriate tri-partite agreement with the Scheme Administrator and Oxford Direct Services Limited which sets out the basis of contributions into the LGPS;

6)         Authorise the transfer to Oxford Direct Services Trading Limited  of all customer contracts with third parties in existence on the Transfer Date, and authorise the transfer of all supplier contracts to the two LATCo companies (as appropriate) in existence on the Transfer Date;

7)         Note the provisions of the initial Business Plan for the Companies (the executive summary of which is at appendix 2); and

8)         Note and approve the “client side” arrangements as set out in this report in regard to the Council’s management of the Service Contract with Oxford Direct Services Limited.