EMBC is the highly successful building control service for South Kesteven District Council (SKDC), Rushcliffe Borough Council (RBC) and Newark and Sherwood District Council (NSDC). It is hosted and delivered by South Kesteven District Council via a partnership agreement between the 3 authorities. It is not based on a company model, instead all employees and associated responsibilities reside with SKDC. All income and costs are shared with partners as per the agreement, on a 3-way equal share. The purpose of this report is to support the Companies Committee in keeping an oversight of the partnership.
Appendix 1 to this report is exempt under paragraph 3, Schedule 12A of the Local Government Act 1972 (as amended) because it contains information relating to the financial or business affairs of an individual or organisation. Should Members wish to discuss to contents of the appendices, a resolution to exclude the press and public will be required.
It is likely that the press and public will be excluded during discussion of the following agenda item because of the likelihood that information that is exempt under paragraphs 1 and 2 of Schedule 12A of the Local government Act 1972 (as amended) would be disclosed to them.
The Strategic Director for Commercial and Operations introduced the report and the abridged Business Plan which was appended to the report. It was noted that the Business Plan contained commercially sensitive information, therefore, if Members wanted to discuss it in more detail, then the meeting would have to go into closed session.
The Chairman noted that although it was referred to as a Business Plan it was more a Co-operation Partnership Agreement.
The Assistant Director Commercial and Operations gave a background to building control which was a statutory service provided by a local authority. Building regulations set the standards for design, construction and alterations to virtually every building. Previously this would have been done by the local council, however, the Government created a market where building regulation approvals could be sought by application to a local authority or an Approved Inspector, creating a commercial market. East Midlands Building Consultancy (EMBC) Inspectors had to complete in the market place with other Approved Inspectors which was why the Business Plan appended to the report was exempt as it contained commercial information.
When the Government created the market, individual authorities struggled with deficits. In 2014, South Kesteven District Council’s deficit was over £100,000. The EMBC partnership was formed with Rushcliffe Borough Council in 2014 and Newark and Sherwood District Council joined in 2015/16. Benefits of the partnership included shared costs, overheads and expertise.
The Assistant Director of Commercial and Operations then explained about the two different types of works, one was “fee earning” the other was “non-fee earning”. Fee earning works were when the EMBC Inspectors competed with the Approved Inspectors in the commercial arena and costs had to account for with the fee earning competition and a breakeven position achieved.
Non-fee earning was where the local authority had to maintain registers of all building control approvals awarded in its area, whether this was issued by itself or by an Approved Inspector, this was classed as ‘non-fee earning’ work. Other non-fee earning work included general advice to the public and work associated with dangerous structures. The cost of non-fee earning work fell to the General Fund of each local authority.
There were two elements within the Partnership:
· to compete, to offer services at the right fees to breakeven, and
· to provide Best Value for Money for the costs that fell on the Council Tax payer. More detail was contained in the Business Plan.
Details in relation to furloughed staff were given and Members were referred to Chart 1 of the report. When Covid-19 had hit in April 2020 there had been a significant fall in the level of work activity and 12 staff had been furloughed. However, as work activity had resumed staff had gradually returned until all staff were back by mid-August 2020, details were shown within the Business Plan at Table 7. Work activity had rebounded and from September 2020 onwards it had been significantly higher than the previous year. One reason for this could be the change in working habits due to Covid-19 with more home extensions and similar types of building work being carried out which had benefitted the EMBC Partnership.
The financial performance for the EMBC partnership was detailed within the report at 3.16. A small surplus from fee earning work was split three ways equally between the three partners, the cost for non-fee earning work was also split equally between the three partners. The partnership worked well and covered a large area. South Kesteven was the lead authority with the other two partners paying a management fee of £20,000.
Members then debated the report before them and the following points were raised:
· Geographical area covered and those areas not covered, were there any proposals to extend the partnership. It was noted that there was a potential opportunity to work in partnership with South Holland District Council and Rutland County Council.
· Were there similar types of arrangements elsewhere in the country – South Cambridgeshire and Derbyshire.
· Benchmarking work carried out with other partnerships.
· Opportunities to work in partnerships with larger organisations, such as CNC Building Control Norfolk.
· Market kept under review.
· Current market share 50%.
The Committee asked to receive an update on the EMBC partnership in due course.
The Committee to receive an update on EMBC in the future.
The Committee congratulated the Assistant Director Commercial and Operations on the detailed report. As this was the last meeting of the Committee that the Assistant Director Commercial and Operations would be attending in this role, he was thanked for all his hard work over the long period of time that he had worked for the Council and he was wished a happy and healthy retirement.