Unitary looks to transfer statutory and regulatory functions to trading company

The Cabinet at Shropshire Council will today consider proposals to transfer a number of key statutory and regulatory services to its trading company ip&e.

The services covered by the plans are:

  • Development management (planning);
  • Building control;
  • Land charges;
  • Street naming and numbering, and local land and property gazetteer;
  • Public protection (including trading standards, environmental health, licensing and parking enforcement);
  • Historic and natural environment; and
  • Regulation of private 
sector housing.

The total gross budget proposed for the services being transferred to ip&e – excluding support costs currently recharged through the internal market and below the line costs – is £7.950m. The income budget for services is £4.672m, giving a net budget of £3.278m.

The Cabinet considered an interim business case for the transfer in July last year, following which further evaluations were made.

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An initial 12 month arrangement is proposed involving the secondment of relevant staff into ip&e, with officer delegations proposed to allow a contract for up to a further five-year period to be awarded once the employment arrangements, performance outcomes, contract value and associated issues are resolved.

The Cabinet paper, which can be viewed here, said a number of risks to the council associated with the delivery of services being transferred to ip&e had been identified.

These include legal challenge to the lawfulness of delegated decisions or use of statutory powers, perceived conflicts of interest in carrying out statutory duties and commercial support activities, and ensuring properly regulated statutory functions.

The paper said that contractual protections and mitigating measures would be implemented to minimise these risks.

It also concluded that the overall benefits of transferring the in-scope services into ip&e outweighed the risks associated with retaining the services within the council. “There is adequate protection for the council from both a legal and financial perspective.”

The paper added: “The council is given the opportunity, through ip&e Ltd, to deliver fit for purpose and resilient statutory services through reducing operating and support costs and by developing a viable commercial support service that can help to sustain the statutory services. In the longer-term, it is anticipated that there will be a reinvestment of generated profit back into the services to deliver council savings and service improvement.”

The paper noted that ip&e would not make any decisions that legally must be made by the council, such as determining planning and licensing applications. Nor would any employees, who are only employed by ip&e, exercise any statutory powers that must be exercised by an authorised officer of the council.

The council has previously transferred communications and business redesign to ip&e.

In 2012 it identified legal services as one of four areas for transfer to the company but this did not happen.

Mal Price, Shropshire’s Cabinet member for planning and housing, said: “In the face of challenging financial pressures, the proposed transfer aims to both maintain and, over time, enhance the delivery of the key statutory services that the council has a legal duty to deliver.

“The services involved contribute significantly to the council’s priorities and it’s therefore essential that we take action to ensure the successful long-term delivery of these services.”

Cllr Price added: “The proposed transfer aims to reduce operating costs and support costs, and will create the conditions that will permit the generation of new and increasing income streams.

“This will help to close the funding gap that future reductions in central Government funding will create, and reduce the risk of the council failing to deliver its statutory services.

“In addition, ip&e considers it will be better able to further improve service delivery and productivity to ensure services are resilient, accessible and responsive, as well as continuing to foster a customer-focused culture and generating new income streams through trading.”

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