The ESPO Management Board met on Wednesday 16 September 2026, discussing the organisation's financial performance, operational updates, and future meeting dates. Key decisions included noting the progress update and agreeing to defer a constitutional review item regarding the appointment of the Chair to a future meeting.

Managing Director's Progress Update

The Board received a comprehensive update on ESPO's performance. Financially, the organisation reported a trading surplus of £5.4 million after the first four months of the year, which was £0.2 million ahead of budget and slightly ahead of the previous year. This positive performance was achieved despite ongoing challenges in the education sector and local government finance, with schools prioritising essential spending and delaying discretionary purchases. ESPO maintained strong sales levels and margins, with stores sales performing better than anticipated. Direct sales were slightly behind budget due to deferred purchases of furniture and equipment, but the pipeline remained encouraging. Framework rebate income was also performing well, with collections ahead of last year.

Expenditure was £0.1 million less than budget, demonstrating effective cost control despite inflationary pressures and a higher-than-budgeted pay award. The full-year budget anticipates a surplus of £7.5 million, with current guidance increased to £7.7 million, reflecting a cautious outlook due to continued school funding pressures and broader economic uncertainties.

Operationally, ESPO's distribution centre handled a significant volume of order lines and deliveries, with strong pick rates and on-time performance. Customer service metrics remained impressive, with high call answer rates and customer satisfaction scores. The introduction of a next-day delivery service was performing well and receiving positive customer feedback. Facilities management activities included statutory inspections and repairs, while health and safety saw one reported injury. ESPO was awarded ISO 14001 accreditation for its Environmental Management System. The IT department reported 100% satisfaction from internal customers, with improvements in Microsoft Secure Score and high completion rates for cybersecurity training. ESPO is also exploring the opportunities and risks associated with Artificial Intelligence (AI), with staff enrolled in AI apprenticeship courses and an AI working group established.

Staffing updates indicated a low turnover rate of 1.9% in the first quarter, significantly below the national average, and a strong interest in vacancies. Absence data showed a general reduction in sickness related to stress, depression, and mental health, with a comprehensive wellbeing support program in place.

During the discussion on the progress update, Councillor Justine Thomas, Cabinet Member with budget responsibility at Norfolk County Council, inquired about the rationale behind rebates, questioning why cheaper upfront prices weren't pursued. Kristian Smith, Managing Director of ESPO, explained that ESPO is a self-funded trading business procuring on behalf of public bodies, and supplier rebates are a key funding mechanism. Councillor Mohammed Jamil, Cabinet Member for Finance and Governance at Peterborough City Council, sought further details on the Health MOTs for staff, which Kristian Smith clarified were voluntary health checks offered to support staff, particularly those on night shifts. Councillor Darren Green, Councillor at Peterborough City Council, commended the management for maintaining operating temperatures and inquired about specific AI opportunities, which were discussed in detail, including AI's potential in scanning council papers, procurement evaluation, sales recommendations, and automating manual processes. A report on AI risks and opportunities was requested for a future meeting. Councillor Thomas Catton, County Councillor for Romsey, questioned the top-line sales figures being lower than the previous year, despite being above budget. Kristian Smith explained that the budget was realistic given market contractions and school funding pressures, and that medium-term initiatives were in place to drive growth. Councillor Neil David Garland, County Councillor for Warwickshire, praised ESPO's financial performance and staff retention, and raised questions about long-term plans for declining discretionary school spending and expenditure below budget, which were addressed by Kristian Smith, who highlighted the existence of a 10-year financial plan and medium-term initiatives.

Dates of Future Meetings

The Board noted the scheduled dates for future Management Board and Finance, Audit and Risk Sub-Committee meetings. Councillor Robin Wyatt, Chair of the meeting and Councillor for St Nates Priory Park in Little Paxton, Cambridgeshire, confirmed that meetings would commence at 11 am, not 10:30 am.

Urgent Items - Constitutional Review

An item regarding proposed amendments to ESPO's constitution, specifically concerning the appointment of the Chair of the Management Board, was discussed. This had been deferred from a previous meeting due to its linkage with wider constitutional changes related to Local Government Reorganisation (LGR). Given that LGR is now paused, it was proposed to separate this specific amendment for consideration. However, due to the need for formal wording to be circulated and considered, and the fact that the issue was not deemed urgent as its impact would not be felt until after the next election of a chair in May, it was agreed to defer the discussion to the next meeting in March. Councillor Patrick Taaffe, Assistant Head of Law Services, explained the complexities surrounding the LGR implications and the need for proper constitutional procedure.

The meeting concluded with the exclusion of the press and public for the remaining items, which were understood to involve exempt information.