Agenda item

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report, the Head of Community clarified that the first of the two timetables was produced by the consultant and is now out of date, which means that the latter table is correct and should be the one referred to.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 who is guaranteeing the money for the loans the company may borrow. However it was noted that there is currently no plan to borrow money. The Executive Councillor informed Members that the cash flow projections would be contained in the Full Business Plan and the Directors would guarantee the borrowing.

In response to the question, what is the partner is getting out of it, the Panel was informed they would be getting access to a stable service. Members expressed concern that they can’t see why a business would want to get involved. The Panel was given reassurance that the interested businesses know that the shared service would not be included in the joint venture.

A Member asked at what point is there a point of no return, to which the Executive Councillor informed the Panel that once the tendering process is complete, a Full Business Case will be produced however the Council would not be committed to anything at that stage.

The Panel expressed concerned with the business case however they added that they are content that the process continue so long as Members can view the Full Business Case before it is approved.