Agenda item

Context:

To receive an update on Y Prentis activities and the benefits it has brought to the wider South East Wales region.  To consider the dissolution of CMC².

Key Issues:

Y Prentis was established by CMC2 and Melin Homes as a not for profit company limited by guarantee in September 2012.  Y Prentis delivers a Shared Apprenticeship Scheme across South East Wales in partnership with the Construction Industry Training Board (CITB).  Its vision is to ‘provide long term sustainable employment opportunities to help young people maximise their potential and gain fruitful future employment’.

Y-Prentis has been a success story for CMC2. It is profitable, supported by a levy from the construction sector and enabled more than 160 young people into sustainable living wage apprenticeships. Moreover, the potential now exists for the continued development and expansion of the company, in light of the City Deal and major infrastructure developments and opportunities such as the Critical Care Centre in Torfaen. Aside from Y-Prentis, CMC2 has created benefits for Monmouthshire communities with broadband exploitation, MonmouthpediA, digital inclusion and tourism. In terms of its contribution to the Council, the work undertaken by CMC2 on the development of the replacement social care system (FLO/PLANT), has saved the Council in the order of £150,000 annually in licence fees.

With the conclusion of the software development work and other than the continued operation of Y-Prentis, CMC2 has ceased trading and has been engaged in completing live projects since July 2015 when Cabinet approved reserve funding for its accumulated losses. However it was not dissolved at this time as it formed part of an options appraisal to consider a suitable delivery structure for the Alternative Delivery Model (ADM) being considered for Tourism, Leisure and Culture Services.  This analysis has now concluded that CMC² is not the correct vehicle for the ADM so it is now proposed that the company is formally dissolved.

In doing so, it is proposed that one outstanding account of £90,000 relating to software development services for Skutrade is novated to the Council.  The Council had separately engaged with Skutrade to determine whether it could support the competitiveness of Monmouthshire businesses. The recovery of the Skutrade account is considered to be a separate matter to this and we are working with the company to settle the account.

As CMC² is the registered co-owner of Y Prentis, with Melin Homes, it is proposed that following dissolution, ownership of the company transfers to the Council which becomes co-owner of this not for profit company limited by guarantee, which is successful in its own right. Accumulated surpluses of £240,000 (expected to reach £260,000 by 31^st March 2017) are now held by the company. The significant additional future growth potential with major infrastructure investment schemes in the region, now coming to pass must also be considered given the remit of Y-Prentis to work on a regional scale.

Member Scrutiny:

·         The Business Plan for Y Prentis to be brought to a future meeting of the Select Committee.

·         In response to a Select Committee Member’s question regarding Y Prentis being in the ownership of CMC2, it was noted that at the inception of CMC2, it was seen as a perfect opportunity for CMC2 and Y Prentis to align. And a decision was made to do so.  However, there is a need to re-house Y Prentis due to the dissolution of CMC2.

·         Part of the focus of CMC2 included sustainable energy but was not the single focus. The articles of the companies were in renewable and training skills.  CMC2 always had the flexibility to operate in many areas.

·         In response to a Select Committee Member’s question regarding its success, it was noted that there has been an enthusiastic apprenticeship scheme and new software developments.  Now seems to be the time to bring it back in-house.

·         In response to a Select Committee Member’s question regarding the intellectual property of the system, it was noted that with regard to FLO / PLANT, things have been protracted where strong relationships have been developed with other software houses and providers who have taken a keen interest in what has been produced.  However, changes in the market has led to some of these companies being taken over which has meant that the platform is in the process of being sold on.  A valuation is being sought from the District Valuer.  The IP address and the code is owned by the Authority.  In respect of development work taken for the Authority, where contracts were written that the IP address was held by the Authority. For any software development works that were undertaken with private companies, the holder of the IP address varied.  There is no intellectual property that is held by CMC2 other than one software development project.  With regard to who owns this intellectual property, this will need to be ascertained via legal process. Therefore, the company would not be dissolved until this matter had been clarified.

·         A Select Committee Member had expressed his disappointment and questioned the purpose of CMC2. It was noted that there had been a number of examples highlighted in the report that had outlined the good work that had been achieved. However, the point had been reached where it had become necessary to curtail activities and dissolve the company.

·         The Cabinet Member stated that purpose of CMC2 was to take forward areas of interest for the community and to bring people into the Community Interest Company (CIC) who had skills and were able to take forward issues the Authority would like to do but were not in the general remit of the Council.  Therefore, developing benefits to the community that would not have been delivered.  The company has been successful during its time of operation.

·         In response to a Select Committee Member’s question, it was noted that Cabinet received the CMC2 business plan annually and at each point that it was presented to Cabinet, pre-decision scrutiny had been undertaken by the Select Committee.