By Tash Shifrin
16 July 2009
Kent County Council has staunchly defended the trading companies launched by its commercial services arm in the face of complaints from local businesses.
It says a forthcoming Audit Commission review – requested by the council – will vindicate its stance. Kent has a reputation for pushing at the boundaries of traditional local government activity and powers, and other councils will be watching the outcome of the review with interest.
The council’s arm’s-length companies include recruitment agency Kent Top Temps and the Kent Top Travel bus fleet.
But Mike Richards, director of employment agency Kings Hill Recruitment, said there was a lack of transparency over whether the council was cross-subsidising its trading activities.
His firm was at a disadvantage in competition with Kent Top Temps, which was able to share overheads with the council, he claimed. ‘It’s a business built up with my [council tax] money and facilities not available to me – that’s a problem,’ he told Public Finance.
John Burch, deputy director of operations at the Confederation of Passenger Transport, which represents private bus operators, said: ‘The simple problem is there’s not an even playing field. The rules are different. [Kent Top Travel] operate from sites that are existing council sites, with facilities such as payroll. Their advantage over other operators is very significant.’
But the council’s Cabinet member for corporate support services, Roger Gough, insisted the companies were totally separate from the council. ‘They are at arm’s length... independent companies within commercial services [the council’s trading arm].’
The council understood that the businesses’ complaints ‘had not been upheld in any way’ in the Audit Commission’s investigation, Gough said.
A spokesman for the Audit Commission confirmed it had examined the council’s legal compliance ‘in the area of commercial trading and to evaluate concerns expressed by sections of the public over alleged cross-subsidisation of the trading activities’.
Nick Chard, who was Cabinet member for finance until the June election, said the recruitment and transport firms had been set up because ‘there didn’t seem to be a very competitive market’. Setting up the companies had brought down the prices on offer from private companies ‘substantially’.
He said: ‘While there are companies who feel we’ve taken some profitability from them... we have to serve Kent taxpayers as a whole. The contribution commercial services gives back to the county council each year is equivalent to 1% or 1.5% of the council tax.’
A final draft of the Audit Commission report was due to go to Kent this week and will be considered by councillors in September.
16 July 2009
Kent County Council has staunchly defended the trading companies launched by its commercial services arm in the face of complaints from local businesses.
It says a forthcoming Audit Commission review – requested by the council – will vindicate its stance. Kent has a reputation for pushing at the boundaries of traditional local government activity and powers, and other councils will be watching the outcome of the review with interest.
The council’s arm’s-length companies include recruitment agency Kent Top Temps and the Kent Top Travel bus fleet.
But Mike Richards, director of employment agency Kings Hill Recruitment, said there was a lack of transparency over whether the council was cross-subsidising its trading activities.
His firm was at a disadvantage in competition with Kent Top Temps, which was able to share overheads with the council, he claimed. ‘It’s a business built up with my [council tax] money and facilities not available to me – that’s a problem,’ he told Public Finance.
John Burch, deputy director of operations at the Confederation of Passenger Transport, which represents private bus operators, said: ‘The simple problem is there’s not an even playing field. The rules are different. [Kent Top Travel] operate from sites that are existing council sites, with facilities such as payroll. Their advantage over other operators is very significant.’
But the council’s Cabinet member for corporate support services, Roger Gough, insisted the companies were totally separate from the council. ‘They are at arm’s length... independent companies within commercial services [the council’s trading arm].’
The council understood that the businesses’ complaints ‘had not been upheld in any way’ in the Audit Commission’s investigation, Gough said.
A spokesman for the Audit Commission confirmed it had examined the council’s legal compliance ‘in the area of commercial trading and to evaluate concerns expressed by sections of the public over alleged cross-subsidisation of the trading activities’.
Nick Chard, who was Cabinet member for finance until the June election, said the recruitment and transport firms had been set up because ‘there didn’t seem to be a very competitive market’. Setting up the companies had brought down the prices on offer from private companies ‘substantially’.
He said: ‘While there are companies who feel we’ve taken some profitability from them... we have to serve Kent taxpayers as a whole. The contribution commercial services gives back to the county council each year is equivalent to 1% or 1.5% of the council tax.’
A final draft of the Audit Commission report was due to go to Kent this week and will be considered by councillors in September.
