Price of success for East Cambs Council is setting up of second trading arm as waste services return 'in house'
PUBLISHED: 12:45 01 December 2017 | UPDATED: 13:00 01 December 2017
So successful has East Cambs District Council been with running its own trading arm that it is being forced to set up a second to comply with the law.
The new trading arm will be needed to ensure the council can bring its waste management ‘in house’ from next year and continue to comply with rules known as Teckal compliant.
The directive requires at least 80 per cent of the Teckal company’s turn over to be for the public sector.
Commercial director Emma Grima will explain and ask for approval of the new trading arm when the shareholder committee meets on December 11.
She says that without a second company the council could be at risk of legal challenge because of the high turnovers being achieved to date.
In April 2016 and May this year the council’s market and grounds maintenance contracts were awarded to the trading arm.
“The value of these contracts combined is approximately £900,000 per annum,” she says. “Based on the income projections from other areas of the business, predominantly property development, ECTC cannot maintain its Teckal status.”
Various options were considered, she says, and it was felt the best option would be to set up a second company to ensure the smooth transition of the waste and recycling contract from the external contractor.
Ms Grima says the success of the council’s commercial arm can be seen in progress to date that includes:
•Winning grounds maintenance contracts with schools and parish councils,
•Continuing to improve the markets with events such as the vegan fair, vintage fair and summer lates
•Begun building 11 homes at Barton Road, Ely
•Begun work on 13 homes at The Shade, Soham
•Won contracts to provide Community Land Trust (CLT) consultancy services to other councils such as Great Yarmouth, Tendering and South Cambs
•Progressed a scheme for a 500 home CLT development in Kennett
•Progressed a scheme for a 54 home CLT development in Haddenham
•Helped deliver The Dock, Ely commuter car park
•Facilitated the construction of Littleport Station car park extension
Ms Grima says: “As a result of these successes the East Cambs Trading Company (ECTC) projected income (predominantly from property development) in 2018/19 means that ECTC will cease to be able to maintain its Teckal status.”
She says that advice was sought and it was confirmed that it is not enough to simply be Teckal compliant at the time of transfer of service.
“If ECTC has knowledge that Teckal compliance will not be possible in the future, this could leave ECDC exposed to legal challenge,” she says.