Issue - meetings

This report seeks approval to take forward arrangements for the establishment and governance of a Local Authority Trading Company, as agreed in principle by the former Executive in February 2011.

RESOLVED:       (i)      That approval be given for:

a)   the establishment of the local authority company (called City of York Trading, or CYT Limited)

b)   the Business Case at Annex 5 to the report and

c)   the general principles of governance and operation as set out in the report, including the appointment of the Cabinet Member for Corporate Services as a non-executive director to act as Chairman of the Board.

REASON:            To allow the company to be established.

(ii)      That authority be delegated to the Cabinet Member for Corporate Services to approve the final Articles of Association.

REASON:            So that the detailed Articles of Association can be formally agreed.

(iii)     That authority be delegated to the Leader of the Council to formally agree and sign off the Shareholder Agreement.

REASON:            To enable the establishment of a Shareholder Committee that will regularly review the activities of CYT Ltd and monitor its performance.

(iv)     That a Shareholder Committee be established, comprising the Leader of the Council (who will chair the committee) and two other Council Members, as chosen by the Leader.

REASON:            In order properly to exercise the Council’s powers and responsibilities as the sole shareholder of the LATC.

(v)     That the Director of CBSS prepare proposals on which current activities provided to external organisations should be considered for trading through CYT Ltd.; all such instances to be subject to business case approval by the Council Management Team, the Board of Directors and the Shareholder Committee.

REASON:            To allow a mechanism for existing trading activity with external organisations to move into the company.

Members considered a report which sought approval to take forward arrangements for the establishment and governance of a Local Authority Trading Company (LATC).

The former Executive had agreed on 15 February 2011 to establish an LATC, focused primarily on the services currently provided by the CBSS Directorate (Minute 163 of that meeting refers).  Since then, it had become clear that a range of other services could also be traded and steps had been taken towards establishing the company as a legal entity.  Cabinet approval was now required for the establishment of the LATC as a vehicle for any Council service to be potentially traded and for the governance structures under which it would operate. 

Results of a survey conducted by APSE indicated that 72% of authorities returned an income from trading, the average annual income being just over £3 million.  Paragraphs 20-22 of the report provided further information on the potential benefits of an LATC to the Council, its staff and customers.  Details of the proposed structure and mandate of the new company were set out in paragraphs 23-35, with further information on governance and management structures in paragraphs 36-38 and annexes 1-5.  It was stressed that the Council would retain control and ownership of the company as the sole shareholder, the company directors being responsible to the Shareholder Committee.

RESOLVED:       (i)      That approval be given for:

a)   the establishment of the local authority company (called City of York Trading, or CYT Limited)

b)   the Business Case at Annex 5 to the report and

c)   the general principles of governance and operation as set out in the report, including the appointment of the Cabinet Member for Corporate Services as a non-executive director to act as Chairman of the Board.¹

REASON:            To allow the company to be established.

(ii)      That authority be delegated to the Cabinet Member for Corporate Services to approve the final Articles of Association. ²

REASON:            So that the detailed Articles of Association can be formally agreed.

(iii)     That authority be delegated to the Leader of the Council to formally agree and sign off the Shareholder Agreement. ³

REASON:            To enable the establishment of a Shareholder Committee that will regularly review the activities of CYT Ltd and monitor its performance.

(iv)     That a Shareholder Committee be established, comprising the Leader of the Council (who will chair the committee) and two other Council Members, as chosen by the Leader. ⁴

REASON:            In order properly to exercise the Council’s powers and responsibilities as the sole shareholder of the LATC.

(v)     That the Director of CBSS prepare proposals on which current activities provided to external organisations should be considered for trading through CYT Ltd.; all such instances to be subject to business case approval by the Council Management Team, the Board of Directors and the Shareholder Committee. ⁵

REASON:            To allow a mechanism for existing trading activity with external organisations to move into the company.