The Chief Executive & Head of Paid Service has decided to approve a new council as an equal shareholder in Ubico Ltd.

URL: https://meetings.westoxon.gov.uk/ieDecisionDetails.aspx?ID=442

Decision Maker: Chief Executive & Head of Paid Service - Giles Hughes

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Purpose: To consider the Ubico Growth Opportunity business case, and confirm approval (or otherwise) by 31 July 2025 to enter into a Written Resolution at the appropriate time (likely to be December 2025) to approve the matters detailed within the business case

Content: West Oxfordshire District Council (WODC), as a shareholder of Ubico Ltd, is asked to approve the business case for admitting a new council as an equal shareholder. This follows a 2024 review by the prospective council and shareholder agreement in principle at the July 2024 forum. Ubico has since been invited to formally submit a bid for the council’s services, with a decision due by December 2025.   Ubico’s growth strategy focuses on opportunities that align geographically and operationally, offering shared benefits across the partnership. Expert legal advice based on Local Government Reorganisation (LGR) plans have confirmed the current model is suitable for expansion.   Five options were considered. Option 4.1 – Equal Shareholder is recommended as it meets all seven critical success factors, including improved resilience, cost efficiency, and long-term growth. Other models were discounted due to complexity, cost, or risk.   Benefits to WODC include: Enhanced capacity through TUPE of skilled staff, strengthened leadership and Long-term financial benefit, including a joining fee and increased Teckal headroom. Option 1 – Do Nothing This option maintained Ubico’s existing shareholding structure, excluding the new Council from joining. It avoided any change, cost, or risk, allowing the company to focus entirely on current shareholders. However, it also meant forgoing the opportunity to expand services, increase resilience, or realise efficiencies through growth. As a result, while it offered short-term stability, it limited long-term strategic potential and was rejected.   Option 2 – Regional Model Under this model, the new Council would have joined via a regional subsidiary, with existing shareholders retaining control of a parent company. Although this preserved the current shareholder group, it introduced complex governance arrangements, increased administrative costs, and reduced control. With Local Government Reorganisation (LGR) expected to simplify structures, this model would quickly become outdated and was therefore rejected.   Option 3 – Joint Venture Teckal (JVT) This option involved creating a new joint venture between Ubico and the new Council, allowing growth without altering Ubico’s core governance. While it offered a clear pathway for expansion, it carried significant setup and ongoing costs and required early investment before any contract award was secured. In light of the high risk and diminishing rationale post-LGR, this option was rejected.   Option 4.1 – Equal Shareholder The new Council would join Ubico as an equal shareholder, paying a royalty fee to reflect the value of joining an established Teckal company. This model met all seven critical success factors, offering operational efficiencies, economies of scale, improved resilience, and long-term growth. Although adding a ninth shareholder will create short-term governance complexity, this will be resolved through LGR. This option is the most sustainable and strategically aligned and is therefore recommended.   Option 4.2 – Differentiated Shareholder This model allowed the new Council to join with ‘B’ shares that excluded rights to external trading profits, preserving income for existing shareholders. While it protected commercial returns, it disconnected financial benefit from decision-making power, making the new Council less likely to support investment in growth. This misalignment undermined the partnership model and limited Ubico’s ability to scale commercial activity, so the option was rejected.

Date of Decision: July 15, 2025