East Cambridgeshire District Council (ECDC), which established its trading company with a £4.62million loan, has seen £1.7million of it repaid 15 months ahead of schedule.
East Cambs Trading Company (ECTC) was established by ECDC in 2016 and manages the district’s city market, open spaces and the development of new homes.
ECTC was set up with working capital provided by the council through a loan of up to £5million, which is due for repayment in March 2021. To date, ECTC has drawn down on £4.62million of the loan. With the recent repayment, the outstanding loan amount has reduced to £2.92million.
A £1.7m loan repayment from ECTC was received by the council, 15 months ahead of schedule in December 2019.
On top of the repayment, the council has also collected £1.6million from the trading company in financial benefit to date.
The main financial benefits have come from the trading company’s property development through Palace Green Homes.
Palace Green Homes has already paid the council £725,000 in land receipts, more than £143,000 in Community Infrastructure Levy developer contributions and in excess of £73,000 in Section 106 contributions.
Councillor Anna Bailey, Leader of ECDC, said: “We know our residents want us to be more commercial, but they want us to be reasonable about it, and that is exactly what we are doing – being commercial for community benefit.
“Having the trading company has allowed us to deliver really high quality and genuinely affordable homes in partnership with Community Land Trusts. Any profit from housing and commercial services is retained and invested for the benefit of our residents in the taxpayer’s purse and helps the council protect its priority services. In fact, the trading company has contributed to the council’s ability to freeze council tax.”
The trading company also oversees Ely Markets and the district’s open spaces.
Emma Grima, Director at East Cambs Trading Company said: “Ely Markets promotes local producers, provides a hub for small local businesses and contributes to the local economy. It also attracted a royal visit in 2018 and was named Market Team of the Year by their peers.”
Emma Grima continued: “Where open spaces are concerned, the ongoing high-quality service provided to the district council has contributed to two prestigious green flags continuing to fly high at Ely Country Park and Jubilee Gardens.
“What’s more, any profit made by working with other organisations is ploughed back into local services.”
Growth opportunity in grounds maintenance brings potential £100k benefit for council contract
The efforts made by ECTC’s ground maintenance team to extend their services to other organisations such as academies and parish councils, has provided the company with an opportunity to potentially reduce its fees to the council by £100,000 in 2020/2021. This proposal is included within the trading company’s 2020/2021 business plan, which will be discussed at the council’s Finance and Assets Committee on 6 February.
Councillor Bailey continued “The opportunity to negotiate this reduction in management fees has only been made possible by allowing the grounds maintenance service to grow and be a commercial service in its own right through the trading company.
“To be in a financial situation where this option is even on the table, just shows how far the grounds maintenance team has come in three years. This growth provides a strong outlook for the future and as sole shareholder of the trading company, the council will be looking to use these savings to benefit the delivery of its services to residents.”