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06
Jan
North Yorkshire Council to set up another company
North Yorkshire Council looks set to create a new council-owned company to provide digital services.
Called NYNet Public Sector Ltd, the firm would provide area network solution services and other digital services to the council.
As part of the plan, the company would adhere to “Teckal” exemptions — meaning the council could directly award it contracts without open procurement.
The move comes as the council plans to make NYNet Ltd, its broadband company, a commercial entity.
The council said NYNet had expanded its commercial offer and the reach of its network, including a contract to provide services to North Yorkshire Police.
However, the authority added that the growth in income could result in the loss of of the ability for the council to rely on its Teckal exemption.
According to a report due before an executive meeting today (January 6), NYNet would operate “a commercial basis by providing services to external clients” while NYNet Public Sector Ltd would continue to provide services directly to the council.
It added:
All the existing commercial contracts would remain with NYnet Limited and it would become a non-Teckal company that operates on a commercial basis by providing services to external clients.
NYnet Limited would continue to be a wholly-owned company limited by shares. Whilst NYnet Limited will operate on a commercial basis, it will still be subject to council oversight via the shareholder committee, reserved matters and control of the board of directors.
The report also recommends that the new company be provided with a £5 million loan facility, which would be repaid with a commercial rate of interest, to cover cashflow.
Meanwhile, a current £10 million overdraft facility provided to NYNet would be replaced with a £5 million loan facility.
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