Council awards its 'ABS' contract ahead of licence

Topics: Alternative business structures,In-house,Local Government

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Kent County Council has awarded its new legal services company a contract for legal work ahead of applying to the Solicitors Regulation Authority for an alternative business structure licence, the Gazette has learned.

The council announced yesterday that its cabinet had approved plans to develop an ABS on its own rather than set up a joint venture with a commercial partner.

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The council today confirmed that, ‘as part of the recent public procurement process, the council has decided to award the company with a contract for its legal work’.

The council said the new company had been formed with the name Invicta Law Ltd, but its trading name is ‘in the process of being finalised’. 

The council will apply for an ABS licence by the end of April. The new company will start trading as an ABS in January 2017.

According to a council report detailing recommendations in relation to the future delivery of legal advice, the ABS will be located at a separate address from the council’s office.

The report states: ‘For reasons of regulatory compliance as well as making a clear cultural and operational shift in emphasis, it is appropriate for the ABS to be separately located from its primary owner.

‘This will require transferring legal services staff from their two current office locations in Maidstone and Canterbury to a single new address that utilises smarter ways of working and reduced space requirements in modern and professional surroundings.’

The Gazette has been told that all but five solicitors will transfer into the new company. The rest will remain as part of the council’s new corporate law and assurance commissioning team.

The post of director of governance and law, which is held by Geoff Wild, will be replaced by a general counsel.

Wild has been asked by the council to become chief executive of the new company.

The GC’s in-house legal team will retain functions such as contract management of the delivery of legal services to the council by the ABS and commissioning legal advice from the ABS ‘or other sources’ that the council may require.

The report states that ‘initial investment’ will be required from the council for start-up costs. The Gazette has been told the figure has yet to be determined.

The start-up costs will include new ICT, a financial management/billing system, separate bank accounts and business banking facilities, accountancy and tax advice, pensions and a ‘transformation, upskilling and culture change programme’.  

‘Key target areas’ identified for potential new clients include public sector joint venture partnerships, mutuals and other local authority ‘spin-off’ ventures, academies beyond Kent and central government entities including probation services.

The company will be ‘wholly owned’ by the council for 10 years. But the report states that ‘clearly, the council is able to consider a downstream partner if it is in the interests of the company or council to do so’.

Readers' comments (9)

  • Oh, that's interesting.

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  • What if someone offers to do it cheaper?

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  • Jumping the gun a bit!

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  • Anonymous22 March 2016 02:06 pm - What if someone offers to do it cheaper?

    Query whether a firm paying council taxes could do it cheaper than one funded out of council taxes...

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  • Ultra vires ?

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  • What's most noticeable is what isn't being said in these briefings to the press. What's been said is just the 'fluffy' stuff. Matters of significance, if they ever make it into the public domain, are being reserved as 'exciting news' for some unspecified time in the future.

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  • David Cairns 22 March 2016 04:48 pm - Ultra vires ? An interesting point and off my patch as a mere insurance lawyer but I suspect it is answered by the Supreme Court decision in Brent LBC v Risk Management Partners Ltd [2011] UKSC 7, which addressed public procurement issues in relation to insurance through the London Authorities Mutual Limited.

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  • D o they not have rules about a tendering process?

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  • Of course, it's that they put the contract out to tender and then award it to PoodleLaw!

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