Agenda item

This report provides an update on the performance and trading activities of Veritau Limited and Veritau Public Sector Limited (VPS) since the last meeting of this Committee in February 2026.

Members considered an update from the Chief Executive of Veritau on performance and trading activities of Veritau Limited and Veritau Public Sector Limited (VPS) since the last meeting of the committee.

It was noted that:

·       Veritau Public Sector (VPS) was owned by the six member councils, including CYC and was run as a not for profit company. This aimed to cover costs delivering a service to the member councils.

·       Veritau Ltd was the commercial business and was set up to generate a profit – all staff were employed by VPS and those staff worked on behalf of Veritau Ltd, and VPS recharged cost of this to Veritau Ltd.

·       2025/26 had been a year of consolidation following the above restructure in 2024/25. During this year they had gained a number of new clients and contracts, but also lost a major contract with mid-Kent Audit Partnership, meaning their external fee income was lower than expected. They had also been subject to inflationary pressures and the employers National Insurance increase, and the pay award was slightly greater than they had budgeted for.

·       The businesses had made changes to the grading structure to maintain capacity at the top end, out of step with the rest of the market; this had been done to ensure senior staff were retained. They had generally been aiming for 0-100k margin to minimise profit and avoid overcharging member councils.

·       During the year a contract was gained with Leicester City Council, who added fraud protection to internal audit, and overall with additional work, fee income had increased by about 12.7%.

·       At the same time, the businesses costs had gone up by a similar amount, meaning they were looking at a loss for the first time this year.and were trying to eliminate as much as possible to ensure value for money was being provided.

·       There had been a restructure of the Senior Leadership Team due to retirement or plans to retire. This had not been done to reduce cost, although this was a small side effect.

·       Staff satisfaction survey response was down to 71%. On the plus side, fewer respondents had indicated that they were dissatisfied.

·       Members asked about relationship between the two companies – with VPS at a loss, and the commercial arm in profit, when might this become unacceptable to balance and require the businesses to be looked at separately. The Chief Executive answered that staffing costs were too high to councils,  and this was more of a squeeze on the commercial arm than on VPS. There had been no one cause for move – rather a combination of small factors.

·       Members acknowledged that they cancelled each other out but asked for clarification that there would be no additional cost to authorities? The Chief Executive confirmed every effort would be made to ensure this, but that it may ultimately become necessary to increase costs ever so slightly.

·       Members asked whether Veritau Ltd should increase fee income from commercial customers, if it was the commercial arm making the loss, and VPS was performing adequately. They had gained one contract since the start of year but the income from VPS mustn’t wipe this out. They needed to revisit unit cost of member councils. To deliver to member councils including York was costing the business more. Hit to Veritau Ltd should really have been across the board.

·       Members asked whether  Veritau Ltd should be in a position to cross-subsidise councils.The Chief Executive said that it should, but what was not yet evident was the profit element.

Resolved:   To note the performance of both Veritau Limited and Veritau Public Sector Limited since the last business update report

Reasons:    To enable members to assess the performance of Veritau in 2025/26 and the current financial year.