F I F E
C O U N C I L
Policy & Resources Committee
25th April, 2002
Agenda Item No.
SMALL BUSINESS GATEWAY FIFE - PARTNERSHIP LIABILITIES
1.0
PURPOSE
1.1
The purpose of this report is to obtain agreement that the Council funds employee related
liabilities which could be incurred by Small Business Gateway Fife (SBGF).
2.0
BACKGROUND
2.1
The Committee agreed to the establishment of SBGF at its meeting in April 2001. It is a
joint venture company with Scottish Enterprise Fife (SEF) and is a fully integrated single
delivery mechanism for support services for small businesses in Fife and has been
operational for one year. It is proving successful and has met its annual targets for
2001/2. The joint venture has been established through a Partnership Agreement and the
funding is controlled through separate annual contracts agreed between each partner and
the company. A report was approved by the Environment and Development Committee
at its meeting on 15th April to agree funding for 2002/3 based on SBGF’s Operating Plan
and to finalise the Partnership Agreement.
2.2
The company has agreed terms and conditions for its staff, including pension
arrangements, through admission to the Council’s pension scheme which was agreed by
this Committee on 25th October last year. Although not a TUPE transfer, the approach
has been to ensure that staff transferring from the partners do so on similar terms and
conditions and in the case of the 5 former Council staff employed there is continuity of
benefits. Consequently, the company will have liabilities should it make decisions leading
to redundancy or early retirement.
2.3
In the event of early retirement or redundancy there would be a one off lump sum cost
and continuing liability for added years pension. These liabilities would arise from a
Board decision, which in turn would follow on a decision by the Council or SEF to change
service delivery or funding levels. In both these situations there would be a liability to the
company. The extent of the liability would be dependent on factors such as length of
employment, age and salary of the individual or individuals involved.
2.4
The Council will have responsibility to fund any such payments for its former employees
and a proportion of the costs of new employees joining the company who were neither
Council employees nor staff who transferred and who were the responsibility of SEF. The
ratio to be funded by each Partner will be set out in the Partnership Agreement. It is not
anticipated that such additional funding liability would be significant other than resulting
from any major restructuring of the company. Should this eventuality arise then the
funding would be expected to be met from within the Economic Development Service’s
revenue budget.
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3.0
RECOMMENDATIONS
3.1
It is recommended that,
(a)
The Council agrees to fund any future employment related liabilities incurred by
Small Business Gateway Fife as set out in the report;
(b)
The Head of Law and Administration in consultation with the Strategic Manager
(Environment and Development) and Head of Economic Development be
authorised to finalise the funding arrangements with Scottish Enterprise Fife in the
Partnership Agreement
Peter Day (CRPD123)
Head of Economic Development
Harry Tait
Head of Law & Administration
Fife House
North Street
GLENROTHES
Author:
Peter Day
Head of Economic Development
Date: April 2002
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