Councillor A McLachlan introduced a report by the Director of Children’s Services which reminded the Cabinet that on 6 November 2014, the Cabinet and the Executive of Cheshire West and Chester Council (CW&C) had approved a series of recommendations for the establishment of a Community Interest Company to provide services to schools and improve the lives of children in the local area.  It was agreed the company would be jointly owned by the Council and CW&C Council. (Minute No. 89 refers)  Appendix 1 to the Director’s report set out the Cabinet’s resolutions in respect of this.

The Cabinet was informed that the establishment of the company had had clear strategic and operational benefits for both Councils and schools.  As a not-for-profit company it maintained a public sector ethos with all profit invested into improving outcomes for children.  Schools would benefit from receiving better quality services with both a commercial approach and improved value for money.  The Councils had retained a strategic role in the shaping and delivering of high attainment in schools.  The new company supported the local economy through the creation of a thriving local business generating employment and skills.  These outcomes supported priorities identified in the Council Plan 2015-20: A 2020 Vision. 

The Cabinet’s decision had been based on a business case which had been developed in collaboration with the Cabinet Office, Price Waterhouse Coopers (PWC) and both Councils as part of the National “Delivering Things Differently” Programme.  The Business Case had demonstrated that the company could be successful, would grow and be able to reinvest profits into the wider education sector over a five year period. 

Following the decision, an implementation team had been mobilised, jointly resourced by both councils to develop the Business Plan for the new organisation.  The development of the Business Plan had required an intensive analysis of the market, services and costs, together with product and brand development.  The Business Plan had been a major milestone as it had set out how the company would operate including its growth plan, delivery plan, brand platform and the new organisation’s name: ‘Edsential’. 

The Business Plan had demonstrated a string, viable business going forward.  There had been some material updates to the original Business case and in line with approvals given at that time; these had been being brought back to the Cabinet for approval for a final go-live decision. 

The report identified the key changes, their impact on both the Business Plan and on both Councils along with any residual links.

The Key changes for the Council had been:

·  The initial financial support that the company had required.  The company would take longer to clear initial deficits, which were covered by cash flow loans from each council

·  The No Worse Off Principle.  The value of support services provided and strategic payments received from the company would not match the current support costs, leading to a shortfall in the region of £100k p.a.

The Key Changes for the Company were:

·  Additional costs  ...  view the full minutes text for item 47