Issue - meetings

Joint report of the Director and Consortium Treasurer.

The Committee received a joint report of the Director and Consortium Treasurer outlining the proposed changes to the method used for calculating the dividend distribution. A copy of the report, marked ‘Agenda Item 8’, is filed with these minutes.

Arising from discussion the following points were raised:-

  (i).        The current calculation method had been inherited by the ESPO Management Team at a time when Leicester City Council had been a member of the consortium. Subsequently, following discussions with officers, it had been decided to review the appropriateness of the calculation method used;

 (ii).        The basic principles underpinning any revision to the calculation method were ensuring that 80% of the retained surplus was distributed to members, using a method with encouraged the use of ESPO services, and reflected the previous usage of ESPO services by each member authority;

(iii).        A number of models had been trialled and tested with the intention of finding a model which would minimise any possible impact (up to a maximum of a £30,000 swing) on dividend distribution compared to the previous method of distribution. However as the Medium Term Financial Strategy was aimed toward increasing the surplus over the next four years. No member authority would receive less money as a result of these changes;

(iv).        The proposals as set out in the report had been supported by the Finance and Audit Subcommittee.

RESOLVED:

a)    That the proposed method of changing the dividend distribution be approved;

b)    That the calculation method be reviewed in two years time.

Joint report of the Director and Consortium Treasurer.

The Subcommittee received a joint report of the Director and Consortium Treasurer outlining the proposed revised methodology for calculating the dividend distribution. A copy of the report, marked ‘Agenda Item 5’, is filed with these minutes.

Arising from discussion the following points were raised:-

  (i).        The current calculation method had been inherited by the ESPO management team at a time when Leicester City Council had been a member of the consortium. Subsequently, following discussions with officers, it had been decided to review the appropriateness of the calculation method used;

 (ii).        The basic principles underpinning any revision to the calculation method were ensuring that 80% of the retained surplus was distributed to members, using a method which acknowledged the risk of membership, encouraged the use of ESPO services, and acknowledgement of the previous level of engagement with ESPO by each member authority;

(iii).        A number of models had been considered using a number of variables with the intention of finding a model which would minimise any financial impact (up to a maximum of a £30,000 swing) on dividend distribution compared to the previous method of distribution. However as the Medium Term Financial Strategy was aimed toward increasing the surplus over the next four years, members were reassured that no member authority would receive less money should these changes be approved and implemented for the 2015/16 distribution, and ESPO achieved the increased surplus;

(iv).        The proposals as set out in the report were supported by the Subcommittee and commended officers for finding a new balanced method of calculation.

RESOLVED:

That the proposed new method of calculating the dividend distribution be recommended for approval by the Management Committee at its meeting in December.