Unions claim Ely council-owned trading company could be a “huge conflict of interest”

East Cambs District Council

East Cambs District Council - Credit: Archant

Trade union leaders are furious at the lack of answers over controversial plans by East Cambs District Council to create a trading company to develop land.

The move, which is set to be discussed by members today (Thursday), would see a council-owned Local Authority Trading Company (LATC) set up to develop council owned sites and build homes. The aim is to allow the council to “undertake activities with the objective of making a profit.”

However, the East Cambs branch of Unison claim they have been “fobbed off” in a response to a raft of questions submitted to the council’s chief executive, John Hill.

Regional organiser Phil Gooden said: “We don’t necessarily expect to get the answers we want, but we would at least expect to get some answers.”

The union, which looks after public sector workers, submitted 11 detailed questions about the proposals, which are recommended as part of an on-gong consultation process to help cut costs and generate income for the council.

Mr Gooden fears the LATC will produce a “huge conflict of interest” for the authority particularly when it comes to planning.

“You can’t be game keeper and poacher, you have to be one or the other. There is a huge conflict of interest when it comes to planning applications. The trading company may be semi-autonomous but it will be reporting to the council ,” said Mr Gooden.

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A report by Mr Hill to today’s full council meeting recommends the setting up of a committee to act as a shadow board for the LATC made up of five councillors (four conservative and one Lib Dem) and for the chief executive and committee chairman to make final recommendations to the full council in December on establishing the trading company.

The shadow committee will also be responsible for drawing up a business plan for the LATC, which will outline the financial profile including the initial resourcing and implications for the council.

However, Mr Gooden said the move comes half-way through a consultation on restructuring and the union is concerned about the possible implications for staff, their future employment and the viability of the authority as a whole.

Mr Hill’s report said the LATC will enable the council to undertake activities with the objective of making a profit, something it cannot do on its own, as local authorities can only charge to cover costs for services.

The report states: “The council’s generation of income and profit will be critical to protect the council’s front line services viability. This does not mean that all activities which generate more income must be driven through a company, but that establishing a company provides more flexibility in the council’s delivery of services generating greater income and profit.”

The LATC will enable the council to maximise returns on assets because being able to develop land itself will provide more profit then selling off sites to other developers.

It will also give greater control over things like design, affordability and the use of local contractors.