The ESPO Management Board met on Wednesday 16 September 2026. The meeting focused on the financial and operational performance of ESPO, with discussions on sales, margins, costs, and future projections. A key decision was made to pause a review of ESPO's constitution, originally intended to address changes related to Local Government Reorganisation (LGR), and to revisit the specific issue of the appointment of the chair at a later date.

Financial and Operational Performance Update

The board received a comprehensive update on ESPO's financial and operational performance. Gary Taff, Commercial Finance Controller for ESPO, reported a positive start to the financial year, with a trading surplus of £5.4 million after the first four months, which was £0.2 million ahead of budget and slightly ahead of the previous year. Despite ongoing financial pressures in the education sector and local government, ESPO has maintained strong sales levels and margins. Total sales, excluding gas, were over £36 million, with store sales performing better than anticipated. Direct sales were slightly behind budget, attributed to schools delaying larger purchases rather than cancelling them. Framework rebate income was also performing well, with a slight timing issue in supplier data submissions.

Expenditure remained well-controlled, with costs £0.1 million below budget despite inflationary pressures and a higher-than-budgeted pay award. The full-year surplus is now projected to be £7.7 million, a slight increase from the approved budget of £7.5 million, reflecting a cautious outlook due to continued uncertainties in school finances, the conversion of discretionary spending, and broader economic factors.

Christian Smith, Managing Director of ESPO, provided an operational update, highlighting the scale of operations with nearly 200,000 order lines picked and dispatched and nearly 20,000 deliveries made. Pick rates were strong at 37 lines per hour against a target of 32. Stock availability was slightly down at 97.27% in July, but has since recovered. A new next-day delivery service was performing well and receiving positive customer feedback. The customer services team handled approximately 5,000 calls in July with an average wait time of 64 seconds and a 92% call answer rate. Customer ratings were high at 96%.

Facilities management included statutory inspections and repairs to the office and server air conditioning system. Health and safety saw one reported injury, and drug and alcohol testing returned negative results. Practical measures were implemented to manage warehouse temperatures during the summer heat, including hydration breaks and the consideration of lighter uniforms. ESPO was awarded ISO 14001 accreditation for environmental management governance. The IT team maintained 100% satisfaction with internal customers, and cybersecurity training was at 95.7%. An update on Artificial Intelligence (AI) included the introduction of user guidance on AI-related risks and opportunities, with staff undertaking AI apprenticeship courses and an AI working group established.

A staffing update indicated eight new starters and seven leavers in the first quarter, with a turnover rate of 1.9%, significantly lower than the national average. Nearly 6% of the workforce had been with ESPO for five years or more, and there was a healthy number of applicants per vacancy. Absence data showed a general reduction in sickness relating to stress, depression, and mental health, with a well-being support program introduced for the year.

The board noted the update on actions and progress made since the last meeting. Councillor Justine Thomas, Cabinet Member with Budget Responsibility at Norfolk County Council, questioned the rationale behind rebates, suggesting that lower initial prices might be simpler. Maurice Campbell, ESPO's Director of Procurement and Commercial, explained that ESPO, as a self-funded trading business procuring on behalf of public bodies, receives rebates from suppliers as its primary funding mechanism, rather than directly consuming goods and services. Councillor Mohamed Jamil, Cabinet Member for Finance and Governance at Peterborough City Council, inquired about the process for health MOTs for staff, which were described as voluntary sessions with public health professionals. Councillor Harrison Fowler, Cabinet Member for Finance, Resources and Investment at Leicestershire County Council, asked about the cost of these MOTs, which was stated to be a small number, a few thousand pounds, paid to Leicestershire County Council's public health team. Councillor Green commended the efforts to manage operating temperatures and inquired about specific AI opportunities. Christian Smith and Gary Ford, Business Development Director for ESPO, outlined potential applications in scanning council papers for leads, evaluating AI-generated tender responses, product recommendations on the website, automating customer management processes, and real-time price scanning. A report on AI risks and opportunities is to be brought to the next meeting. Councillor Tom Catton questioned the top-line sales figures being lower than the previous year, despite a budget surplus. This was explained as a realistic budget reflecting market contraction and reduced school funding, with a commitment to provide further analysis on declining school numbers. Councillor Neil Garland, County Councillor for Warwickshire, Bedworth North, praised ESPO's financial performance and staff retention, and inquired about long-term plans for declining discretionary school spending and the reasons for expenditure being below budget. These were discussed as part of a ten-year financial strategy and ongoing investment in transformation initiatives. Councillor James Butler, Portfolio Holder for Finance and Property at Warwickshire County Council, sought clarification on management priorities for income growth beyond traditional catalogue business, with plans to be discussed in a private session.

Constitutional Review Paused

The meeting addressed the potential amendments to ESPO's constitution, specifically regarding the appointment of the chair of the management board. This discussion had been previously rolled into broader considerations of Local Government Reorganisation (LGR) and wider constitutional changes. Given the recent announcement that LGR is paused, the work undertaken in relation to LGR has become less relevant. Consequently, it was decided that this work would be paused. The original amendment concerning the appointment of the chair has also been deferred as part of this broader pause. The constitutional review as a whole will be kept under active review. However, the specific issue of the chair's appointment was identified as a separate matter that could be discussed later.

During the urgent items section, the chair, Robin Wyatt, Councillor for St Nate's Prairie Park in Little Paxton, Cambridgeshire, explained that the proposed amendment to the constitution regarding the election of the chair, rather than a rota system, could not be formally discussed and voted on that day. This was due to the original report being linked with LGR-related amendments, and the need for formal wording to be presented to members on the agenda. Patrick Taff, Assistant Head of Law Services, confirmed that while draft wording existed, it had not been formally tabled. Councillor Justine Thomas noted that as the impact of any decision would not be felt until after May, the item might not meet the criteria for urgency. It was agreed that the matter of electing a chair and vice-chair would be brought back as a separate report to the next meeting in March, with the intention that any decision would take effect after the annual council meeting in May. The proposed amendment includes a qualification that a chair can only serve for two consecutive years, with a maximum of four years in total.

Future Meetings

The dates and times for future scheduled meetings were noted. Management Board meetings are set for 17 March and 1 September of the following year. The Finance, Audit and Risk Subcommittee meetings are scheduled for 7 October, 24 February, and 6 October of the following year. All meetings will commence at 11 a.m.