Cabinet Recognises MCG Key Achievements in Cabinet Report

In discussion of yesterday's Medway Commercial Group (MCG) Limited’s six monthly report to Cabinet, members warmly welcomed this update - detailing the company's key achievements and performance over the past six months, as well as its plans for future growth and development.

Introduced by Councillor Andrew Mackness, one of the directors of MCG, the report detailed vast benefits to taxpayers delivered by the LATCo, both in terms of the services that continue to be provided and the income that is generated for Medway Council. The company is 100% owned by Medway Council and forms an innovative response to protecting a non-statutory but greatly valued service, by creating a commercial legal entity with the flexibility to respond quickly to opportunities for growth.

Councillor Andrew Mackness said:

"The report presented to Cabinet makes clear the excellent progress made by MCG in the last 6 months. Financially MCG continues to exceed its expectations with the diverse services it provides. It has taken difficult decisions and restructured in areas, continuing to reduce costs and looking to improve the quality of staff where necessary to operate in a commercial and competitive world.

All of this comes despite recent suggestions to the contrary and mischief making by the Labour Group and their attempts to undermine the organisation itself and individuals within it. It saddens me that I have come to expect little more from the opposition Group, whose total lack of commercial acumen leaves their membership unable to understand the concept of any company. The Labour Group's recent objection to the proposal by MCG and Children’s services, cumulating in their frankly disgusting and unjustifiable stance against the building of an Independent SEN school and residential facility for Medway children and families, was nothing but a cynical politically motivated move and a step too far."

Cabinet Members praised MCG for its consistent financial delivery - For the last financial year (2017/18), MCG exceeded its budgeted return to the Council by approximately £43,000, amounting to a total £286,000. For the current financial year (2018/19), MCG will again meet the budgeted income contribution to the Council and therefore MCG will thus have exceeded its agreed accumulated savings for the last two financial years.

Several other key financial benefits, amounting to more than a further £500 K this financial year of additional benefits include:

  • An 18% reduction in recruitment costs for every temp employed since MCG took over the service in 2017 delivering a saving of over £123K to Medway Council since Dec 2017
  • 197 Temps placed from external agencies at no agency cost to Medway Council since Dec 2017
  • Reduction in temp costs with 88 temps converted into permanent positions because of MCG taking on this role delivering a saving of approx. £243K to Medway Council
  • Recruitment, Schools and Governor services transferred with no salary or on costs for SLA’s. Salary costs of approximately £263K and an income at the time of £188K gave a further net saving to the Local Authority of £75 K
  • A R and D tax rebate not claimable by a Local Authority for 17/18 in the region of £37K
  • An increase in private pay telecare connections by over 30%
  • Direct payment of interim professionals saving more than £250 k to Medway Council