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

Reasons for the decision

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.

Alternative options considered

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structures, this model would quickly become outdated and was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.