The council is to take advantage of a break clause in the contract and consider other, more cost-effective, means of running the centre following a review of the existing management contract.
The Shropshire Food Enterprise Centre is owned by Shropshire Council and has been managed by Heart of England Fine Foods on a six-year contract since 2010.
One of only 10 food and drink incubators throughout the UK, it comprises 12 purpose-built production incubator units, plus offices, conference and meeting facilities, a small-scale distribution centre and food store, alongside a demonstration kitchen.
A review of the management contract has found that Shropshire Council is paying an excessive amount of money for it, and a scheduled three-year management review by an independent consultant has also found room for improvement.
The break clause comes into effect on 18 February 2014, with Shropshire Council giving HEFF six months’ notice from early August.
The decision was made by Councillor Steve Charmley, Shropshire Council’s Cabinet Member for business growth, in his portfolio holder decision making session.
Councillor Charmley said:
“The Shropshire Food Enterprise Centre is seen as a national example of best practice in the incubation of small food and drink companies and we are committed to ensuring its future success, and that it is run as effectively and efficiently as possible.
“The current contract is a very costly way of running the Shropshire Food Enterprise Centre and we have a situation that we are paying an excessive amount of money for a management contract that only covers part of the role of running the centre. In effect the council is subsidising HEFF.
“The two major advantages of alternative management arrangements are that Shropshire Council would save a lot of money and, secondly, that the management suite of offices can be let out commercially – thus covering many of these costs and also providing more rental income than HEFF are paying.
“Over the next few months we will be looking at a range of options for the future management of the centre, including bringing its management in-house, or re-tendering the contract.”
“Karen Davies, Chief Executive of HEFF, plays a hugely important role in helping the council in its work to support local businesses and strengthen the local economy.
Though we are now looking at a different way of managing the Shropshire Food Enterprise Centre, I very much hope that we will continue to work closely with her in the future.”
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