The Council’s Executive Committee today approved recommendations to form an arms length company that means City Markets (LLP) can secure funding on the strength of its income. The much-needed investment would be used to improve facilities and bring operations into line with European Directives for distribution, storage and sale of fresh produce and foodstuffs.

Following a review by the Council in 2006, it was concluded that the development and growth of the market service, which includes the fruit and flower units at Blochairn and Scotland’s only inland fish market, could be substantially enhanced if the service was to operate on a commercial basis at arms length from the Council. A view also supported by the Market Traders Association, the body that represents wholesale market tenants.

Grant Thornton was commissioned to review a range of alternatives and prepare a business case which recommended that forming an LLP was the most viable option, allowing members to benefit from limited liability whilst retaining flexibility and tax advantages.

It also means that the £5 million of investment needed over the short term to safeguard the markets’ operations can be financed through a loan obtained under prudential borrowing, a funding mechanism only available to councils.

If the proposal is agreed it is envisaged that the 26 Markets Service employees will transfer on their existing terms and conditions to the new company.

Executive member for Development and Regeneration, Councillor George Ryan, 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 in to 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."

Creating an LLP has worked well for the Council in the past. In 2006 City Building (Glasgow) LLP was formed, evolving from the former Building Services Department of the Council. It operates as an autonomous company, employing over 2,200 skilled employees, enabling the organisation to deliver quality construction and maintenance services across the public and private sectors.

The plan to create City Markets LLP also comes shortly after the announcement that the Council is to join forces with Serco to provide Information, Communication and Technology services for employees, residents and businesses, making a saving of around £70million over the 10 year agreement.

For more information on Glasgow's markets, click here.