Agenda item

The Commission considered a report of the Director of Corporate Resources which provided an update on the performance of Leicestershire Traded Services during 2021/22 taking account of the impact that Covid 19 restrictions have had on these services.  The report also sought the Commission’s views on future plans for recovery and growth.  A copy of the report marked ‘Agenda item 11’ is filed with these minutes.

Arising from discussion, the following points arose:

(i)              Whilst performance had been disappointing, this was not unexpected.  The Council’s traded services were not immune to the effects of Covid and subsequent cost and inflationary increases, like so many other businesses across the country.

(ii)             It had been thought that Services might begin to recover more quickly, but this had not been the case due to staff pressures (both in terms of Covid sickness absence and retention and recruitment issues), the changing global and geopolitical situation which was putting enormous pressure on the cost of food and fuel and continued reduced demand.

(iii)           Regarding future plans for recovery and growth, Members noted that this would include reconfigured menus to reduce costs and wastage, as well as improved profit margins in its cafes including the renegotiation of contracts with suppliers to respond to the increased cost of goods.  Members requested that the Services recovery and growth action plan be shared with the Commission outside the meeting for information.
  

(iv)           There were some promising signs starting to emerge as demand had been rising at the cafes at Beacon Hill and Tithe Barn.  Beaumanor Hall had, however, been slower to recover but figures were now starting to reach pre-pandemic levels. 

(v)            A member questioned, given how competitive operations at Beaumanor Hall had always been, whether it was being run as a truly commercial operation.  Members noted that services run from the Hall were being considered along with other traded services, but that Beaumanor was a particularly expensive asset to hold and operate given the nature of the building itself.  Members commented that this was a recognised, valuable and well liked asset and so consideration of how to make it more profitable would be looked at, but this had to be balanced against the need for potential investment and repairs.  The Lead Member provided reassurance that all options were currently being looked at. 

(vi)           Demand for the Council’s School Meals Service had increased in April and May which gave confidence that this was returning to normal, pre-pandemic levels. 

(vii)         A member questioned the viability of supplying school meals to one-off sites outside the County.  It was noted that some schools were just over the County boundary and so did not incur any additional costs to those being supplied in Leicestershire.  The provision of services to areas such as Cambridge and Birmingham were being provided by existing teams and Members noted that none were being subsidised by the Council.  The Director explained that out of County schools supplied by the Council’s School Meal Service were clustered together in each area which provided efficiencies and an opportunity to grow across these localities.  Members were reassured that all out of County school meal contracts were profitable, but that these were still monitored and reviewed where necessary.

(viii)        Members noted that in order to limit environmental impacts, the Council’s School Meal Service delivered food provisions direct to site.

(ix)           A Member questioned whether losses seen by the School Meals Service as a result of Covid should be borne by schools rather than the County Council.  Members noted that school meal contracts had been modified to transfer risk away from the County Council and so the losses seen were already much reduced.  Members noted that the Council’s losses related to staffing costs and product cost increases.

(x)            A Member queried the disparity in the location of country parks and related cafes owned by the Council across Leicestershire and questioned what action was being taken to provide a broader County wide hospitality offer.  It was noted that this was a historical issue outside the control of the Council and the geography of the Councils country park hospitality offer aligned with its country park estate which it had owned for some considerable time.

(xi)           Members noted that the viability of the café at Snibston had been reviewed as it had made significant losses.  Work was underway to outsource the café. 

(xii)         In order to determine the true profitability of the Council’s traded services, a Member requested that full details of the capital and running costs for each service be included in future reports. Members were concerned that continued focus on the Services’ overall turnover was not sufficient to fully understand how it was performing.  It was acknowledged that some financial information would be commercially sensitive, but the Director undertook to consider how best to present this to Commission Members in the future to provide a better overall picture of the Services performance and profitability.

RESOLVED:

(a)  That the update now provided on the performance of Leicestershire Traded Services during 2021/22 taking account of the continued impact of Covid 19 on these services, be noted;

(b)  That a copy of the Services recovery and growth action plan be circulated to all members of the Commission for information;

(c)   That the Director of Corporate Resources be requested to provide more detail in future reports to the Commission on the Services capital and running cost, include the provision of commercially sensitive information, where relevant, in an appropriate way.