Minutes:
Sally Burlington (Head of Policy) introduced the report, and provided the Board with a background on the work to establish a Local Government Mutual, which had previously been led by the LGA’s Commercial Advisory Board. There was strong evidence to suggest that establishing a Mutual would be viable and could present an average cost saving of 15% to councils.
The Resources Board were asked to agree that they should lead the LGA’s work on the establishment of the Mutual itself, while the Commercial Advisory Board would lead the development of the LGA’s commercial strategy, including work to establish a joint venture with Regis Mutual Management Ltd to bid to provide support to the Mutual. The Board were also asked to nominate ‘Champions’ to provide a steer on work on the Mutual between meetings of the Resources Board.
Members noted that the Mutual would only be successful if enough local authorities wishes to join. A large number had expressed an interest in principle, and the next step would be to identify a number of founding members to establish the Mutual in shadow form. The current communications work with councils on the Mutual was highlighted, including a draft publicity leaflet to be made available at the LGA Conference and Exhibition in July 2017.
In the discussion which followed Members made a number of comments, including:
· The Mutual had similarities to the Municipal Bonds Agency, but different in that it was easier to explain to local authorities who would be aware of previous Mutuals which had been unsuccessful. This proposed Mutual had a clear business case for market savings, as there was not a very large market choice for local authority insurance.
· In response to a question on the minimum number of founding members, it was highlighted that the LGA hoped to have 10 or 20 different types of council involved at an early stage.
· In principle the Mutual would cover participants for any risks currently covered in the market, but after the procurement process there would be an opportunity to look again at what would be covered.
Decisions
The Resources Board:
a) Noted the background of the Local Government Mutual project;
b) Agreed that the Board would lead work to develop the proposed Mutual on behalf of the LGA as a founding member;
c) Noted the next steps for inviting councils to become founding members; and
d) Agreed that the four political groups would nominate a Member Champion for the Local Government Mutual to provide day to day oversight with officers, who could report back to the Board to seek views on key decisions.
Action
Political Groups to confirm their nominations for a Local Authority Mutual Champion.