Glasgow markets could be set to rake in £5 million worth of finance after Glasgow City Council agreed to form a limited liability partnership (LLP) to run its market services.
The new arrangement for the retail, wholesale and farmers’ markets was agreed by the council’s Executive Committee last week.
The formation of City Markets (LLP) at arm’s length from the council will enable it to secure funding on the strength of its income.
The much-needed investment will be used to improve facilities and bring operations into line with European directives for the distribution, storage and sale of fresh produce and foodstuffs.
The move follows a review by the council in 2006, which concluded that the development and growth of the market service, including the fruit and flower units at Blochairn, could be substantially enhanced if the service was to operate on a commercial basis at arm’s length from the council.
This view was supported by the Market Traders’ Association, which represents the wholesale market tenants at the Blochairn site.
Accountancy firm Grant Thornton was commissioned to review a range of alternatives. It was recommended that the formation of an LLP was the most viable option, as it would allow members to benefit from limited liability, while retaining flexibility and tax advantages.
The £5m investment needed over the short term to safeguard the markets’ operations can be obtained through a loan under prudential borrowing, which is a funding mechanism only available to councils.
It is envisaged that, if the proposal is agreed, the 26 employees involved with market services will transfer their existing terms and conditions to the new company.
Councillor George Ryan, executive member for development and regeneration, said: “Glasgow markets play a crucial role in local and regional food chains, delivering and supplying fresh produce to homes and businesses, not to mention providing more than seven hundred jobs across the city. Creating a new company to run the service will mean operating surpluses can be ploughed back into the business, and new sources of funding sought to expand current operations and capitalise on new opportunities for growth.
“Glasgow Wholesale Market consistently outperforms its closest comparator markets in Birmingham and Manchester, and has the potential to be a profitable commercial business. This is the best way forward for the markets to fulfil their potential while also providing jobs and contributing to the city’s health.”
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