Issue - meetings

To consider a report by the Head of Community presenting a commercialisation update to support the viability of procuring a joint venture to develop HDC’s CCTV service.

(Executive Councillor: Cllr D Brown)

That the CCTV Development Overview presents a fair reflection of the broad potential benefits of establishing a partnership with an external joint venture partner.

That the model described in the CCTV Development Overview be used, as part of an EU compliant procurement process (Restricted Procedure with Competitive Dialogue), as the framework for negotiations with potential joint venture partners.

That the Head of Community be authorised to undertake the procurement process, and to present information to the Executive Councillor for Commercialisation and Shared Services, and the HDC Ventures Ltd Board on the preferred partner.

That the Head of Community, in consultation with the Executive Councillor for Shared Services and Commercialisation, and the HDC Ventures Ltd Board be authorised to determine the preferred partner, and award the Contract.

Consideration was given to a report by the Head of Community to which was appended the CCTV Development Overview and Draft procedure timeline (copies of which are appended in the Minute Book). Executive Councillors were presented with a commercialisation update to support the viability of procuring a joint venture to develop the Council’s CCTV service. The Cabinet was reassured that this would not be a privatisation of existing services but a joint venture opportunity and that the completed business plan would return to Cabinet for final approval.

In order that the Council can proactively pursue its intention to be financially self-sufficient by 2020, it would be essential that the Council established the commercial vehicles necessary to provide opportunities to increase income and, where possible, reduce costs. The establishment of this joint venture company would enable the Council to protect its existing investment in CCTV services (people and equipment) whilst also creating opportunities to enhance the commercial potential of a business that is equipped to service a wider range of customers across the public, private and third sectors.

RESOLVED

a)  that the CCTV Development Overview presented a fair reflection of the broad potential benefits of establishing a partnership with an external joint venture partner;

b)  that the model described in the CCTV Development Overview be approved, as part of an EU compliant procurement process (Restricted Procedure with Competitive Dialogue), as the framework for negotiations with potential joint venture partners;

c)  that the Head of Community be authorised to undertake the procurement process, and to present information to the Executive Councillor for Commercialisation and Shared Services, and the HDC Ventures Ltd Board on the preferred partner; and

d)  that the Head of Community, in consultation with the Executive Councillor for Shared Services and Commercialisation, and the HDC Ventures Ltd Board be authorised to determine the preferred partner, and award the Contract.

The Panel are to receive the CCTV/Security Services – Business Case for Commercialisation. (TO FOLLOW).

With the aid of a report by the Head of Community (a copy of which is appended in the Minute Book), the CCTV/Security Services – Business Case for Commercialisation was presented to the Panel.

The Executive Councillor for Commercialisation and Shared Services made a brief introduction of the Business Case in which he informed the Panel that the CCTV shared service with Cambridge City would not be included in the commercialisation. In addition, Members were informed that the company formed by commercialisation, HDC Ventures Ltd, would be financially self-sufficient by 2021.

In response to the question of who would be purchasing the new CCTV cameras, the Panel was informed that the Council have a budget for the procurement of new cameras and with a partner the economies of scale would mean that there would be a 30% saving on the purchase of new cameras. However as the assets would be funded from the Council’s funds, they will be the property of the Council and won’t be used by the commercialised company unless the company procure services (e.g. Council staff and the network) from the shared service.

In response to a query regarding the timetables contained within the report, the Head of Community clarified that the first of the two timetables was produced by the consultant and is now out of date, which means that the latter table is correct and should be the one referred to.

A Member asked for clarity on what is happening with the existing CCTV staff. Members were informed that the existing staff would not be transferred across and would remain as Council employees. It was confirmed that the commercialised company may have its own staff.

Following a question of how would the commercialisation company raise capital, the Panel was informed that initially the shareholders would bring the capital, however the company would have the ability to raise funds through loans.

Concern was raised that the Council would find it difficult to encourage companies to join the venture however the Head of Community informed Members that soft market testing has been positive and that there are four companies who are interested in joining the venture.

In response to the question of who is carrying the majority of risk, Members were informed that commercialisation does carry risk for the Council however there are rewards that, the Executive Councillor and Head of Community believe, are worth the risk. In addition, the commercialised company would be a standalone business with the risks protected from the Council.

A Member asked about the £100k that the Council are investing in commercialisation and was informed that the £100k is funded from earmarked reserves and will be used to buy the shares in the company. The Head of Community advised that the current capital programme identified investment in the region of £400k, the Head of Resources confirmed that this capital was financed within the approved capital programme.

Concern was expressed that the business case does not contain cash flow projections and state  ...  view the full minutes text for item 21