Agenda item

The Management Committee considered a report of the Chief Officer which provided an update of the actions and progress made since the previous ESPO Management Committee held on 19 March 2025. A copy of the report, marked ‘Agenda Item 8’, is filed with these minutes.

 

Arising from discussion, the following points were made:

 

1. As previously reported, shortfall in sales was attributed to the ongoing contraction in the educational supplies market, driven by school funding constraints and inflationary pressures, notably pay and energy costs. Despite market challenges, ESPO has maintained strong performance, particularly in development areas, supported by competitive pricing and targeted growth strategies, helping to offset declines in traditional segments.

 

2. Stock margin percentage was 0.3% above budget and direct margin was 0.4% higher, reflecting a favourable product mix and improved margin management. Gross profit margin stood at £15.2million, slightly below by £0.3million, primarily due to lower stock sales.

 

3. Framework rebate income totalled £4.8million, in line with both budget and prior year. While some frameworks were impacted by central government budget reductions, ESPO had successfully offset this through growth in other frameworks.

 

4. Expenditure was £0.8million below budget. Cost savings had been achieved through operational efficiencies, vacancies and lower than budgeted pay awards.

 

5. ETL and Eduzone had delivered a combined surplus of £88k, which was £21k ahead of budget, and £11k above the previous year, despite delays in international orders and financial pressures in the nursery sector.

 

6. ESPO had made a strong start to the financial year, with surplus levels at £0.5million ahead of budget at period 4. Despite risks from continued market contraction, ESPO was on track to deliver a full year surplus £7.5million to £7.7million, exceeding both the budget and the uplifted Medium Term Financial Strategy (MTFS).

 

7. The organisation was currently entering the autumn mini-peak, with further performance insights expected at the November Management Committee update.

 

8. Operationally, ESPO had processed and despatched over 200,000 order lines, valued at £8.387million, and had achieved a pick rate of 36 against a target of 32. It had also maintained excellent stock availability, providing service reliability. Also 10 new large goods vehicles had been acquired, enhancing logistics capacity.

 

9. Customer Services call wait times were an average peak time wait of 1 minute 18 seconds, and a 91% call answer rate and FIFO rating of 98% had been achieved, reflecting high customer satisfaction. ESPO had also been recognised as Supplier of the Year at the 2025 Educational Resource Awards.

 

10. For facilities management, all statutory inspections had been completed in July, there had been no reported injuries, and 21 randomised drug and alcohol tests for safety-critical roles had all returned negative.

 

11. The IT helpdesk had achieved a 100% satisfaction rating from customers. A second internet line into Grove Park had been secured to ensure service continuity in the event of a break in service.

 

12. Current sickness averages were just over 8 days, slightly above the 7.5 days target. Initiatives to support staff and to help reduce the sickness rate included a wellbeing programme, on-site flu vaccinations, a monthly HY newsletter for all staff, and a launch of mandatory learning and development training.

 

13. In response to a question on the impact of shrinkage in the educational supplies market, the Chief Officer explained that there had been an approximate 4-5% contraction. Factors contributing included reduced school budgets, early cessation of orders, and shorter school weeks in some regions. This had led to noticeable decline in disposable income available for educational purchases.

 

14. In response to questions about mental health support, it was noted that sickness data was monitored, and mental health first aiders were available. Most stress-related absences were found to be non-work-related. Support mechanisms included access to helplines and fostering strong workplace relationships. Hybrid working was acknowledged, but in-person interaction was encouraged for wellbeing.

 

15. Members praised the average call wait time of 1 minute 18 seconds. In response to a question, it was reported that benchmarking was done via the Institute of Customer Service annual survey, comparing performance to private sector standards like John Lewis. Call trends varied seasonally, with common queries including delivery issues, account setup, and billing questions. A weekly trading pack provided detailed breakdowns of call reasons, and the Chief Officer undertook to share the findings with Members.

 

16. A Member enquired about readiness for the upcoming Employment Rights Bill. It was confirmed that ESPO staff were employed by Leicestershire County Council, and HR-related changes were being managed centrally by the council.

 

It was moved by Cllr. R. Wyatt and seconded by Mr. Harrison that the update provided by the Chief Officer be noted.

 

RESOLVED:

 

a)    That the update provided by the Chief Officer be noted.

b)    That the Chief Officer be requested to circulate a breakdown of call reasons into Customer Services in the form of a pie chart to members.