b'Distinctions between Commercial Trading v Shared Services Arrangements 6.18 Commercial tradingShared services Set up for profit or primarily to generateGenerally cost recovery or not-for-profit distributing incomeentity set up to make efficiencies and cost savings.Competitive marketPublic administrative function.Reach wider market To improve services, maximise economies of scale or cross authority demand and/or improve users experience (well-being).Wide potential customer base - membersLimited to a specific range of users or customers, of the public, world wide web, privateeg other public bodies, local authorities, members sector, anyone, anywhere. of a company.Involves risk and potential losses (albeitRisk minimised by exclusive use by those who ring- fenced through a company) have agreed to share services and who have bought into the enterprise or who have set it up.Arms length arrangements with the LA(s)Has the potential of being treated as an in-house required to recover support costs and notdepartment for Teckal exemption purposes.to subsidise activitiesLimited to company as defined WhichWider choice of vehicle or arrangement, eg public means limited by shares, guarantee or anadministrative arrangements, joint committee, industrial and provident society; simple agreements, company or other entity;LLPs and LPs not permitted No express powers for LLPs or LPs.Market orientated To be free of procurement issues the arrangements must be non-market orientated (see Supreme Court judgment in the Brent case).The entity will need to compete forProvided the entity meets Teckal criteria in business in the market regulation 12 it will be outside the procurement regime as far as, supplying services back to the owners is concerned. Note the entity may still need to comply to procurement rules if it is a contracting authority.93'