Agenda item

To consider a confidential report by the Head of Adult and Business Services (copy enclosed) in respect of Cefndy Enterprises.

                                                                                                     10.10 – 10.45

A copy of a confidential report by the Service Manager Cefndy Healthcare/Business Development, which detailed Cefndy’s past performance and highlighted the need for future investment, had been circulated with the papers for the meeting.

Councillor R.L. Feeley provided the Committee with details of Cefndy’s past and present performance, future targets and the main challenges it would be facing as a result of the elimination of DWP funding.

The Head of Adult and Business Services (HABS) explained that although financial and service performance had been good Cefndy’s delivery of its targets had inhibited the service from investing in its factory infrastructure.  He explained that Cabinet would in July be considering a proposal requesting draw down of the Corporate Plan capital reserve to invest in plant/machinery to replace aged existing plant.  Denbighshire had made a commitment in its Corporate Plan to support its future existence by approving capital investment. 

Attendance at Scrutiny had been requested to consider the organisation’s:-

-               Performance in delivering its Business Plan for 2012/13;      

-               Its Business Plan for 2013/14;     

-               The risks identified with respect to subsidy reduction and DWP funding and the consequential impact on the workforce and Council; and

-               Health and safety matters

Cefndy’s future vision was to be self-sustaining and robust in its governance.  Cefndy Healthcare was a Denbighshire supported business which provided meaningful employment and training to over 60 people, 45 of whom had a disability.  Details of Cefndy’s history and contribution to local employment and training had been included in the report.  During the last 5 years Cefndy had reversed the trend of increasing dependency on Denbighshire’s financial underpinning, by delivering commercial growth and financial efficiencies and a copy of the Business Plan had been included as Appendix 1.

Over the last 5 years Cefndy had:-

·                              Increased sales performance by over £1m to now £3.8m.

·                              Reduced financial dependency on the Council by £225k.

·                              Been on course to deliver the key objective of being at zero cost to the Council.

·                              Had an excellent record of H&S management, working with Corporate H&S and through robust internal processes in line with legal requirements.

The challenges now facing the organisation compromised the sustainability of the business/service and could threaten Cefndy’s viability of existence if not addressed in the near future.  These challenges had been further compounded by recent UK Government welfare reforms.  Three options had been identified for the Committee’s consideration with a view to securing the business’ future.  Members considered the options and resolved to recommend that Option C be supported – which proposed to draw down the capital investment outlined in the Council’s Corporate Plan which would permit the business to invest to address the risks it faced and enable it to become more efficient and able to cope with the loss of Department for Work and Pensions (DWP) funding and eventually lead to financial sustainability without a Denbighshire budget.

The Corporate Director: Modernisation and Wellbeing explained that she had discussed the implications of the withdrawal of ‘Work Choice’ funding with the local MP and the AM.  Officers explained that staff employed at Cefndy came from various areas within and outside the County.  Details pertaining to the business’ advertising and internet sales were provided for the Committee.  Following detailed discussion the Committee:

RESOLVED –

(a)   to note the contents of the report, and

(b)   recommend to Cabinet that Option C – to draw down the Corporate Plan capital reserve to invest in plant/machinery to replace aged existing plant - be approved as the preferred Option, with a view to assisting the business to address the challenges it faces and become a financially sustainable business without Council funding in future.

[SE/PG/DHL to report to Cabinet] 

PART I