Agenda item

Resolved: that the Committee would refer it views to Mayor and Cabinet as follows –

·         That the Committee agrees the recommendation to Mayor and Cabinet.

·         The Committee also recommends that Mayor and Cabinet should formally resolve to consider the future options for the development of a Local Authority Trading Company (LATCO).

5.1    Vince Buchanan (Service Group Manager, Green Scene) introduced the report, the following key points were noted:

·         The contract for parks management and maintenance had been let to an external provider for 20 years. The contract was due to end in 2019.

·         Careful consideration was being given to the options for the future of the service.

·         The service was high performing. It had adapted well to changes in funding and the impacts of cuts.

·         Consideration had been given to the implementation of the new corporate strategy – particularly the commitment to assess the options for bringing services back in house.

·         Three options had been considered for the future of the service: continued contracting out; a local authority trading company (LATCO) and direct management through insourcing.

·         Following assessment of the options – officers planned to recommend to Mayor and Cabinet that following a 20 month extension to the current contract the service should be insourced.

·         The extension of the existing contract was designed to allow officers to prepare to directly manage the service.

5.2    Vince Buchanan and Kevin Sheehan responded to questions from the Committee, the following key points were noted:

·         Councils that had successfully created LATCOs had incorporated a broader range of environmental services within the remit of the company – in addition to parks management.

·         The more commercial a local authority owned company became, the more it would have to open itself to competition from other providers. Teckal exemptions provided some protection from procurement regulations in limited circumstances.

·         Some of the costs associated with a LATCO were unquantified (because it was a new approach) so modelling had assumed similar figures from the running of the service in-house.

·         Officers noted that there would be some limitations in terms of the scale of the service provision in Lewisham. Glendale had the option to bring in specialist equipment and staff from the wider organisation but the benefit was marginal.

·         If the contract was re-let to the market – it was likely that the cost would increase.

·         There were other large grounds maintenance providers in the region that might apply for the contract if it was re-let. However, the size of these providers meant that they might develop a monopoly.

·         Monopolies presented a risk to the Council because they might limit Council discretion and control.

·         Officers were confident that there were the skills in-house to deliver a high quality service. It was anticipated that a number of staff would also transfer to the in-house service under the Transfer of Undertakings and Protection of Employment (TUPE) regulations.

·         It was acknowledged that the service was already performing well so it was not anticipated that there would be significant performance benefits from bringing the service in-house.

5.3    In Committee discussions, the following key points were also noted:

·         The Committee welcomed the retention of a potential future option to create a LATCO.

·         Members noted the in the ‘good parks for London’ awards – there was a mix of in-house and external service provision amongst the highest and lowest performing boroughs. It was acknowledged that part of Lewisham’s success in the awards was the quality of the relationship it had created with Glendale.

5.4    Resolved:

·         That the Committee agrees the recommendation to Mayor and Cabinet.

·         The Committee also recommends that Mayor and Cabinet should formally resolve to consider the future options for the development of a Local Authority Trading Company (LATCO).