Cheshire East Council

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Increased instructions from shareholders and external clients during pandemic lead to surge in profits at council-owned LGSS Law

LGSS Law, the council-owned alternative business structure (ABS), saw revenue rise 14% and profits more than double in the financial year ending 31 March 2021.

The ABS's latest accounts saw revenue increase from £8,475,001 to £9,683,913 and profit after tax of £868,092 compared to the previous year’s profit of £349,612.

Debbie Carter-Hughes, Director of LGSS Law, said in the report that the firm “expects to build on the changes that it has made and see further growth in 2021/22”.

She added: “Local authorities have found themselves on the frontline when it comes to dealing with the coronavirus pandemic and this has led to an increase in instructions from both shareholders and external clients.”

This had seen the firm increase the number of staff it employs, review its working practices and, as a result, return increased turnover and a greater profit, she said.

Mrs Carter-Hughes also noted that the introduction of remote court hearings and client meetings had meant that LGSS Law was able to undertake more work in-house and also expand the external clients that it undertakes work for “due to geographical location being less of a constraint”.

Commenting on the principal risks and uncertainties faced by the company, she said that the pandemic made 2020/21 challenging for LGSS Law, “with a quick move to full-time remote working for staff (and in some cases with children and other family members around), along with associated challenges to recruitment and on-boarding of new employees, to training and development of staff, and to supervision”.

Mrs Carter-Hughes said specific areas of work had been impacted by the national lockdown, with planning and property work decreasing but childcare and adult care work increasing.

“Remote working and the subject-matter being dealt with led to concerns about how to support the mental health, wellbeing and morale of staff. All of these changes in a relatively short timeframe brought significant risk and uncertainty and this will remain a concern as government restrictions are eased”.

On 1 April 2021 Northamptonshire County Council, one of the firm’s three shareholders alongside Cambridgeshire County Council and Central Bedfordshire Council, was split into two new unitaries, North Northamptonshire and West Northamptonshire. The new councils evenly split the county council’s shareholding. In addition the children’s services function of the county council was moved to the newly created Northamptonshire Children’s Trust.

“All of these changes have led to uncertainty for the firm during the financial year. LGSS Law Ltd worked closely with the transition teams and is pleased to have secured work with all three organisations going forward,” Mrs Carter-Hughes said.

The report also noted how in March 2020 a capital restructure had taken place with the issuing of further shares in the company. “It was recognised that this was needed to place the firm on a better financial footing and to enable it to grow and develop. It is possible to see in this financial year that this capital restructure has achieved what it was intended to do and has provided the firm the stability it needed.”

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