Newco: Local Authority Trading Company Eqia

Appendix 1

EqIA for Newco to become a Local Authority Trading Company under section 95 Local Government Act 2003

Assessing impact on equality is a process which develops along with your policy. You must complete the table below to ensure that the EqIA process can be tracked.

1. Management of the EqIA

This EqIA is owned by William Grosvenor, Head of Business & Social Enterprise, Business & Social Enterprise Group, Operations Directorate, and the management team at Newco. It has been prepared for the consideration of Newco to become a wholly owned trading company – Newco Enterprises Ltd - in April 2012.

1. Identification of policy aims, objectives and purpose

Newco has been operating as a Direct Labour Organisation manufacturing a range of products including kitchen units and UPVC windows and doors. It is a supported Business with 60% of its staff being disabled thus providing employment and training for this protected group.

Historically Newco has supplied LBN with products for the ongoing refurbishment of Council housing stock and to meet the decent homes programme. It is recognised that this work is diminishing to such a level as to jeopardise the future of Newco and the continued employment of its staff unless new markets are found for its existing products and new products developed to diversify and strengthen its manufacturing base.

The products that Newco offer have a market outside of the Local Authority and changing its legal status to become a local authority trading company will allow these products to be marketed and sold to a wider range of customers. Staff would be protected byTransfer of Undertakings (Protection of Employment)TUPE regulations when transferred to the new company. If Newco were to remain fully embedded within LBN, it would not have the legal powers to trade across both public and private sectors, which would mean year on year reduction in available work resulting in the eventual closure of the business. The objective of becoming a trading company is to have the freedom to win new work, whilst still retaining the support of LBN.

Newco’s ethos of employing more than 50% of disabled staff will be fully embedded within its new legal status thus retaining all the existing criteria and social impact.

1. Scope / focus of the EqIA

This EqIA focuses on the implications for its staff of setting it up as a Local Authority trading company.

There will be no change to the ethos of Newco. It will maintain over 50% of disabled staff. This proposal will give Newco the opportunity to make the future of the business more sustainable hence retaining the employment of disabled people in the long term.

It is expected that this proposal will allow Newco to sustain and grow its existing business. This will allow the increase of staff thus increasing its social outcomes and opportunities for protected groups.

This proposal will allow Newco to widen its customer base and this will in turn increase the understanding of disability employment strategies to a wider audience.

Newco is a good employer which cares about its staff and its customers, and will offer quality outcomes to both thus developing a good reputation in the construction industry.

1. Relevant data, research and consultation

Using the employment statistics for existing staff we can see that our mission of employment over 50% of disabled staff is maintained.

The gender profile of this group is:

Male = 78%

Female = 22%

The age profile of this group is:

Up to Age 24 = 5%

Age 25 to 39 = 26%

Age 40 to 49 = 28%

Age 50 to 59 = 32%

Age 60+ = 9%

The ethnicity profile of this group is:

Asian or British Asian = 11 %

White/Black African = 6%

Caribbean = 13%

Mixed Heritage = 1%

White/British = 59%

White Other = 8%

Not declared = 2%

The declared Disabled status of this group is:

No declared disability = 44%

Disabled = 56%

The declared religion of this group is:

Christian = 70 %

Hindu = 0%

Muslim =10 %

No religion = 3%

No specified = 12%

Prefer not to say = 5%

Sikh = 0 %

Unknown = 0%

The gradeof this group is:

Scale 1 - Scale 6 = 73%

SO1 – SO2 = 11%

PO1 – LOP8 = 14%

Hays Grade = 2%

The demographics for disabled people of working age are the same for Newham as the rest of London at 16.15% of the population. However, the percentage not in employment in Newham is 65.11% compared to a London average of 47.69%.

The need to continue with a business like Newco in Newham is therefore proven.

DWP currently recognise 63 supported businesses nationwide. Community Union and British Association of Supported Employers (BASE) and Department for Work and Pensionsall report that there is a decline in the numbers of supported businesses which has escalated in 2011. It is usual for one business per year to close, in 2011 there were six. Examples of businesses closed due to lack of funding or the ability to be commercial are Action for Blind workshops (Charity), Speedwell enterprises (Slough Borough Council) and Wigan (Metropolitan Authority).

Newco has increased its product range whilst maintaining the quality standards that are required by the industry thus allowing it to provide products that are of marketable quality at the right price.

Pricing of products has been tested via tendering exercises which has resulted in work being won in open competition demonstrating that there is business available to Newco outside of LBN.

• Value of Estimates submitted in 2011-2 exceeds £15.3m. This is 82% up on the whole of 2010-1
• Number of enquiries received in 2011-2 currently stands at 473. This is 9% up on 2010-1
• Percentage of enquiries from NH/RMS has dropped 9.56% in 2011-2
• We are now receiving enquiries directly from other Councils.
• Percentage of enquiries directly from Contractors is up 8.49% on 2010-1
• Enquiries directly from Housing Associations have almost doubled but still remain a small percentage of the overall at 0.42%
• Trade enquiries have more than tripled.

Newco has already obtained over £1.4m worth of external sales in 2011/12.

London Borough of Newham

1. Assessment of Impact and outcomes

1. Formal agreement
2. Divisional Director
3. Head of Strategy & Partnerships

1. Publication of results
2. Date EqIA published on Council website (full or summary version): to be confirmed

1. Monitoring and review

The EqIA will be reviewed on a six monthly basis by the Newco board

London Borough of Newham