Shropshire Council to look at new ways of managing Shropshire Food Enterprise Centre

Shropshire Council is to consider an alternative approach to running the Shropshire Food Enterprise Centre (SFEC) following a review of the existing management contract.

The SFEC is owned by Shropshire Council and has been managed by Heart of England Fine Foods (HEFF) 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.

As a result, Shropshire Council has decided to take advantage of a break clause in the contract and consider other, more cost-effective, means of running the centre.

The break clause comes into effect on 18 February 2014 and, to take advantage of this, Shropshire Council must give HEFF six months’ notice, meaning notice will be given in early August 2013.

The decision was made today (Thursday 25 July 2013) 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 SFEC 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 SFEC, I very much hope that we will continue to work closely with her in the future.”

Shropshire Council will work closely with HEFF over the next six months to ensure a smooth transition to the new management arrangements, and ensure that tenants at the centre are kept fully aware of any planned changes.