Agenda item

The Deputy Leader, Councillor Davies declared an interest in this item.

The Leader presented the proposal to agree the future model for the delivery of property services at Newport City Council.

In July 2014, Newport City Council and Norse Commercial Services created a Joint Venture (JV) agreement to form Newport Norse for the provision of property services, which rebated over £4M to the Council to support the delivery of services to Newport residents in the last 9 years.

The current partnership provided a range of services including facilities management, estate management, design and building maintenance, premises management and cleaning.

In December 2022, Cabinet approved the extension of the current arrangement to December 2025. This allowed the Council to examine the current service model and to assess the future requirements to meet the Council’s corporate priorities.

The Leader was pleased that the Cabinet report and recommendations presented work completed from collaboration with the Council’s Overview Scrutiny Management Committee through a Policy Review Group, supported by external advice and a cross-organisational project board.

The findings of the review recognised and valued the successful track record and collaborative relationship between Newport City Council and Newport Norse but also recognised the need for change.

In the deliberations and assessment of options available to the Council, the Policy Review Group considered several options such as: insourcing of services to the Council; renewal or update of the current arrangement with Norse; a Community Interest Company; an arms-length Local Authority Trading Company; and a shared service model.

All of the options proposed were carefully considered, examining the opportunities and risks, strategic alignment to the Council’s priorities, social value to the Council and residents of Newport, financial viability, service delivery quality and ease of deliverability.

The outcomes of the assessment identified that the preferred and most viable model for the Council was to move to a wholly owned Local Authority Trading Company (LATCo) for services currently delivered by Newport Norse.

The Council’s Policy Review Group recommended that transition to the operating model should be adequately resourced and noted the importance of minimising staff attrition to reduce the risk on the important services delivered by Newport Norse.

The Review Group also recommended that the future model should be sufficiently flexible to allow for future growth such as shared services or additional service expansion; and that the ongoing programme of work was reported back to Scrutiny and Cabinet.

Throughout this process, management and staff from Newport Norse were involved and consulted with. On behalf of this Cabinet, the Leader thanked the Norse workforce for their involvement as the Council considered and deliberated the options.

The Leader also thanked the Councillors who participated as part of the Policy Review Group and Overview Scrutiny Management Committee.

Comments of Cabinet Members:

§  Councillor Lacey was pleased to fully support the paper. This was an opportunity for the Council and looked forward to a wholly owned Newport City Council company. Councillor Lacey also wanted to thank Scrutiny and officers for a collaborative work and detailed review of options to better align priorities. It must be understood that this required an element of investment but as the Leader stated, there were also opportunities to develop this service in the future, expanding a range of services, or a shared service provision. Importantly, the Council was able to work with Norse management and staff and would continue to do so going forward. The Council would collaboratively work with stakeholders as this progressed but at the moment, it was business as usual, working with Norse.

Decision:

Cabinet agreed, in principle, the future model for delivery of property services as a local authority trading company as outlined in the report. Cabinet directed the Strategic Director for Transformation and Corporate Services, in consultation with the Council’s Statutory Officers:

1.   To prepare a proposal document regarding the setting up of an arms-length company wholly owned by the Council for the purpose of delivering property services to the Council from January 2026.

2.   To obtain such advice and information as necessary in order to enable the preparation of that document.

3.   To take such mobilisation steps as necessary to enable the setting up of the new model, but not including the registration of the company at Companies House.

4.   To report back to the Cabinet at a later date regarding the proposal and progress of the above.