Archived decisions

Contact: Kevin Gardner, Head of Legal Practice, ext 7381

1. Summary

This report sets out the background to the recommendations that John Wilkinson, Assistant County Education Officer (Lifelong Learning), is appointed as the County Council's representative on the Board of South Central Connexions Partnership Limited, and that Roger Mead, Assistant County Education Officer (Resources and Planning) be appointed, in place of John Wilkinson, as Alternate Director to VT Southern Careers Limited.

2. Background

2.1 Hampshire County Council owns a share in South Central Connexions Partnership Limited, (SCCP) a company limited by guarantee and set up to provide the Connexions service to young people in Hampshire and the Isle of Wight. Other members of the Company include Southampton City Council, Portsmouth City Council, Isle of Wight County Council and VT Careers Management Limited.

2.2 Hampshire County Council owns a share in VT Southern Careers Limited which provides services to SCCP and from which the County Council receives a dividend each year in the region of £200,000.

2.3 Hampshire County Council also provides services to SCCP under contract at an estimated value of £2m per annum.

2.4 The DfES has required Connexions Partnerships to find savings for 2004 / 05 onwards. The amount that SCCP needs to save is £1.81 million which is over 12% of its total income. Also as from the 1 April 2004 SCCP will begin to incur VAT - related liabilities for which it has no source of income. This would amount to approximately £150,934 per month.

2.5 The Board of SCCP has considered the options available to it and has decided that the only way to fund the savings and avoid the VAT - related liabilities, is to directly deliver the Connexions services itself. The current contracts with VT Southern Careers Limited and Hampshire County Council and other providers come to an end on 31 July 2004 and SCCP propose to bring the service in-house for direct delivery thereafter.

2.6 VT Careers Management Limited have called an Extraordinary General Meeting of SCCP asking the Shareholders of the Company to re-consider the decision made by the Directors. The Shareholders meeting is fixed for the 21 May 2004. On the 13 May 2004, the Executive Member, Education, authorised the County Education Officer, or a nominated deputy, to represent the County Council at this meeting. Following discussion and receipt of legal advice, it has been agreed that Mr Wilkinson will represent the Council at this meeting.

2.7 It is the view of the County Education Officer and his advisors is that the proposals for direct delivery appear to be sound and further information is being obtained from SCCP to ensure that the proposals are subjected to detailed scrutiny in order to be satisfied that the Company would be able to deliver on all aspects. The SCCP Board expressed a clear view in favour of direct delivery and a number of young people who were present at the Board Meeting confirmed that they would prefer the clarity of a single service through direct delivery. The other Directors, representing a wide range of statutory and voluntary agencies, were of the same view. The proposals in the report to the SCCP Board appear to provide good value in terms of both money and a focus on front line services to the young people. Management and overhead costs are relatively low.

2.8 The County Council has an interest in VT Southern Careers through its shareholding and dividends. It is highly unlikely that dividends would be forthcoming in the future, either because the company will not have the business or profits would have been reduced significantly. Some services provided by the County Council under contract would be caught up in the establishment of direct delivery service which could, potentially, create some liabilities in terms of redundancies and premises and IT costs for the County Council.

3. Options

3.1 Until the recent developments outlined above, the interests of both South Central Connexions Partnership Limited and VT Southern Careers Limited have converged. This being the case, there has been no difficulty in the Council's appointed Director to the Boards of both companies being the same person, Andrew Seber. However, now that the interests of the companies are diverging, this places Mr Seber in a difficult position, as decisions which may be in the best interests of one company may not be in the best interests of the other. On receipt of legal advice, Andrew Seber has resigned as Director of South Central Connexions Partnership Limited, but will continue in his role as Director of VT Southern Careers Limited. This being the case, it is important that a fresh appointment is made to represent the interests of the County Council on the Board of South Central Connexions Partnership Limited. Mr Wilkinson, is nominated for this role as the officer with the appropriate background knowledge of the situation and understanding of the needs of relevant service users.

3.2 The appointment of Mr Wilkinson to the Board of South Central Connexions Partnership Limited will mean that, in order to avoid a conflict of interests arising, it is necessary for him to resign his position as alternate Director to VT Southern Careers Limited. Following this resignation, it is recommended that a fresh appointment be made. The Officer with the relevant background knowledge and understanding is considered to be Roger Mead, Assistant County Education Officer (Resources and Planning).

4. Recommendation

The following decisions are sought

4.1 That John Wilkinson, Assistant County Education Officer (Lifelong Learning), be nominated as Director representing the County Council's interest on the Board of South Central Connexions Partnership Limited, following the resignation of Andrew Seber, on legal advice.

4.2 That Roger Mead, Assistant County Education Officer (Resources and Planning) be nominated as Alternate Director representing the County Council's interest on the Board of VT Southern Careers Limited (in the event that Andrew Seber is unable to attend), following the resignation of John Wilkinson, on legal advice.

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

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