North Lincolnshire Council is to set up a Trading Company to enable it to trade commercially to help generate more income to deliver services.
Last year (April 2015 to March 2016), new business generated through commercial development exceeded £150,000 and resulted in a turnover of £7m.
The Company would operate a an administrative and legal vehicle to direct, source, secure and develop new and profitable commercial income on behalf of the council.
Any profit achieved by the company would be returned to the council in the form of a dividend payment on an agreed basis. Profits would be subject to Corporation Tax.
The Company will need a board of directors and a company secretary. These directors will not be paid, but will be responsible for managing the affairs of the company and will be bound by a Shareholders Agreement.
The company would trade in the following areas:
- Professional and technical services
- Business management services
- Education support services
- Operational and facilities management services
Cllr Rob Waltham, deputy leader, North Lincolnshire Council, said:
The changing landscape for local government demands innovation in service delivery, and the council is embracing this.
We are a low tax authority and will do everything in our power to keep it that way. That is why we are pursuing the commercial avenue to explore ways we can generate more income so we can continue to deliver high quality services to our residents.
We are always looking at innovative ways of working and rightly so. We need to develop new and substantial income to support the council’s budget plans and corporate strategy objectives.
We are a forward thinking council and being proactive and looking at how we can generate more income by operating more commercially demonstrates great business sense.