Shropshire Council to shut trading company next month over lack of profits

The Cabinet at Shropshire Council has decided to shut its trading company, ip&e, from the end of next month and bring all services it provides back in-house.

The decision was taken yesterday (17 Wednesday) after the Cabinet received in private the results of an internal review of ip&e’s performance.

The trading company was set up in May 2012 and tasked with winning new business by providing services to other public and private sector organisations.

It currently delivers business design and programme management, communications and marketing, public health, business support and regulatory services, and education support services.

The council said the review had shown that “the company isn’t making the profit it was expected to, mainly due to large overheads and a duplication of work”.

It said that the contracts being delivered by the teams at ip&e would continue.

Malcolm Pate, Shropshire Council’s Leader, said: “ip&e has had a number of notable successes; however, we need to ensure we get best value for money for our council tax payers.

“Staff will transfer back to the council and services will now once again be delivered by the council in a much more efficient way.”

Clive Wright, Shropshire’s chief executive, said: “When the council created ip&e it went into it open-minded; however, the review has uncovered compelling reasons why the company should not continue.

“Unfortunately, despite everyone’s valued dedication, ip&e just isn’t making the profit it was expected to, or delivering sufficient savings for the council quickly enough.”

He said one of the reasons for this was the “huge” overheads placed on the company before it had established trading externally.

“A move back to the council will not mean that trading externally will stop – it will continue, but without the costly overheads and duplication of effort,” Wright insisted.

“Over the two and half years that ip&e has been in existence we’ve learnt lots of useful things. Also, ip&e staff have played a big part in the council’s developing new commercial culture.

“But there is a better way of generating income, and we need this to plough back into providing essential council services that are getting increasingly difficult to deliver. We also need to ensure that we get best value for money for our council tax payers.”

Legal services was originally earmarked as one of four areas for the first wave of spin-outs to ip&e in 2012. However, this transfer did not proceed.