The ESPO ¹ Management Committee met to discuss the Chief Officer's progress, business development, the 2025/26 budget, and a merger between ESPO Trading Limited and Eduzone. Councillor Trevor Bridgwood from Lincolnshire County Council was nominated to be Chairman for the Municipal Year ending 2026. The committee also reviewed the minutes from the previous meeting held on 19 March 2025.

Chief Officer's Progress Update

The Chief Officer's Progress Update report provided an overview of the actions and progress made since the last committee meeting.

Financial Performance:

The report indicated a positive financial performance with a surplus of £5.3 million, which is £0.5 million better than budgeted and £0.9 million better than the previous year. However, it also noted that trading conditions had worsened since the development of the 2025/26 budget due to the contraction of the educational supplies market.

Trading conditions worsened since the development of the 2025/26 budget due to the significant contraction of the educational supplies market in Q3 and Q4 driven by constraints on school funding and other inflationary pressures for schools including pay and energy costs.

To address this, ESPO reforecast the budget for stock sales by reducing sales volumes but increasing margin percentage, which enabled ESPO to maintain the same overall pound margin value and trading surplus budget (£7.3 million) for the year.

Sales and Margin:

Total sales to July 2025 were £36.8 million, £1.4 million behind budget but £0.1 million ahead of last year. Stores sales were £26.0 million, £1.3 million behind budget but in line with the reforecast. Direct sales were £6.0 million and in line with budget. Rebate income was £4.8 million, in line with budget and last year.

Expenditure:

Total expenditure was £9.8 million, £0.8 million lower than budget, reflecting a focus on cost control. Staff costs included an assumption for a 3.5% 2025/26 Local Government pay award, which was confirmed as lower at 3.2%, providing a budgetary saving of £0.06 million across the year.

ETL/Eduzone:

Total sales for ESPO Trading Limited (ETL) and Eduzone were £703,000, £69,000 worse than budget, mainly due to delays in international ordering. ETL serves international and private sector customers, while Eduzone focuses on early years in the UK. Overall, a £88,000 surplus was generated, £21,000 ahead of budget and £11,000 ahead of last year.

Full Year Expectation:

Guidance for the full year had improved above the budgeted level, to a £7.5 million - £7.7 million surplus.

Operational Progress:

In July, ESPO's distribution centre picked and despatched 223,208 order lines valued at £8.387 million, and the transport fleet made 20,322 deliveries with a combined weight of 1.96 million kilograms. Stock availability averaged 98.1% in July, and the stock value was £11.248 million with a stock turn of 4.97. ESPO took delivery of 10 new large goods vehicles from DAF, displaying the new ESPO livery.

The Customer Services Team handled 5,892 calls and processed 28,385 customer orders valued at £9.280 million. ESPO received a customer rating of 98% from FEEFO and was awarded Supplier of the Year at the Education Resources Awards 2025.

Facilities Management ensured that all statutory inspections and repair and maintenance services took place on their relevant due date. Pedestrian warning lights were installed in the warehouse extension, and new CCTV cameras were installed in the office stairwells.

There were no reported injuries in July. A series of drug and alcohol tests were made on safety critical roles, and all donors returned negative results.

The Information Technology (IT) helpdesk handled 666 ticket enquiries with a 100% satisfaction rating from internal customers. ESPO continues to enhance the ESPO intranet site using Sharepoint and configured and installed a replacement firewall.

Sickness Absence:

The three primary causes of sickness absence during Q4 of 2024/25 were stress, mental health & depression (27.99%), other musculo-skeletal problems (22.21%), and cough, cold & flu (12.92%). Leicestershire County Council has a target of 7.5 days sickness per FTE, and ESPO maintained an average of 8.13 days per FTE, less than the average for LCC.

Risk Management:

The report included a risk review extract, which identified several key risks and the controls in place to mitigate them. These risks included major systems failure, failure to meet customer expectations, increased competition, energy management system failure, Amazon's presence in the public sector market, driving under the influence of alcohol or drugs, supply chain risk, IT cyber security, and the Procurement Bill.

Business Development Update

The ESPO Chief Officer Group (external officers) were scheduled to provide a business development update. This discussion was expected to remain private, as it concerned the financial or business affairs of particular individuals or organisations.

Budget 2025/26

The Chief Officer of ESPO and Consortium Treasurer were scheduled to present the 2025/26 budget for approval, as well as provide an update on the 2024/25 financial outturn. This discussion was expected to remain private, as it concerned the financial or business affairs of particular individuals or organisations.

ESPO Trading Limited and Eduzone Merger - March 2025

The Chief Officer of ESPO and Consortium Treasurer were scheduled to discuss a proposed simplification of the company structure for Eduzone Limited (Eduzone) and ESPO Trading Limited (ETL). The report also sought Management Committee Shareholder representative formal approval to integrate Eduzone into ETL as a single company through a merger of the companies. This discussion was expected to remain private, as it concerned the financial or business affairs of particular individuals or organisations.