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:
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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;
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.