This report recommends to Cabinet and seeks approval that the Joint Agreement be varied to update the formulae for the distribution of the accumulated surplus each year.

The proposed new method ensures that if one Member Authority decides to adjust their margin compared to the other Member Authorities, then the impact is solely on the Member Authority making the change.

The Joint Agreement includes the provision that accumulated surpluses identified for distribution are allocated to Member Authorities each year.

That:

a)    the West Mercia Energy Joint Agreement be varied to update the formulae for the distribution of the accumulated surplus each year; and

b)    the interim Director for Economy and Place be authorised, following consultation with the Solicitor to the Council and S151 Officer to finalise and execute the variation.

1.             Do not agree the new distribution formulae. This option is not recommended because the current method was set up on the basis where all Member Authorities adopt the same margin approach. Should this not continue to be the case in the future then an alternative method is required to ensure an equitable distribution. Should a member wish to reduce their margin the current method would negatively affect all Members rather than just the member wishing to reduce their margin.

2.             The proposed new method ensures that if one Member Authority decides to adjust their margin compared to the other Member Authorities, then the impact is solely on the Member Authority making the change.