The purpose of this report is to provide an update on Hoople from the Managing Director of the company.  In addition, it outlines the approach being taken to jointly review the future approach to commissioning services currently delivered by Hoople beyond the current contract term.

The Assistant Director Place Based Commissioning introduced the item with the following comments: the Joint Venture Company had been established in April 2011; it represented one of the council’s most significant strategic service delivery partnerships; Hoople delivered ‘back office’ services, including human resources, finance and IT; the council currently owned 74.7% of Hoople, with the remaining 25.3% owned by Wye Valley NHS Trust; in addition to the savings already delivered, a recently renegotiated Service Level Agreement (SLA) had achieved further savings in excess of £1.2 million for 2014/15; the council’s current contract with Hoople would come to an end on 31 March 2016; a joint review had been commissioned to examine the options available to the council for future service delivery arrangements, with a report due to be presented to Cabinet on 3 July 2014; and the committee was invited to comment on the proposed criteria, as detailed in paragraph 8 of the report.

Mike Dearing, the Managing Director of Hoople, was invited to give an overview of the Three Year Update document; this was appended to the report.  The principal points of the presentation included:

a.         The independent non-executive directors of Hoople, Nigel Sellar (Chairman) and Jill Youds, and the council nominated non-executive director, Councillor CNH Attwood, in attendance at the meeting were introduced.

b.         The business case for Hoople was based on achieving £11 million cumulative savings over ten years for Herefordshire Council.  It was now forecast that savings of £12 million would be achieved by end of the current five-year service contract.

c.         The company made no profit from the SLA services it provided to the shareholders.

d.         Hoople worked as a flexible partner, maintaining strong working relationships which enabled the company to understand the needs of the council and to identify new solutions to meet the on-going changes and challenges.

e.         With the recent renegotiations, the council spend on corporate services with Hoople was now 50% less than when the contract started.

f.          Acknowledging the financial challenges for the shareholders, the company continued to grow profitable business with a range of other customers to support and supplement the existing service range and to maintain and enhance resilience.

g.         Hoople sought to maintain employment opportunities locally and staff were developing new service options and seeking new business to support the vitality and viability of the company.

h.         It was anticipated that there was the potential for dividends to be paid to the shareholders in future years.

i.           Other key successes included: the establishment of a high street recruitment agency; new terms and conditions had been rolled out across the company, helping to drive performance and outcomes; staff culture was now focussed on delivering strong customer service; and Hoople had achieved an excellent balance of public sector values and private sector expertise.

j.           It was noted that there were three layers of governance which were used to monitor contractual service performance with the council.

k.         Attention was drawn to the principal areas of change in the council  ...  view the full minutes text for item 83