THE future of a company which provides back office services was questioned at a council meeting.

Hoople Ltd was set up in 2011 as a joint venture between Herefordshire Council and the county's NHS to save money over the provision of back office support services such as human resources, recruitment and training.

But at a recent cabinet meeting of the council, Cllr Bob Matthews asked what impact there would be on the council if Hoople closed.

Hoople Ltd has a pensions liability of £4,928,000, which mainly relates to previous council staff.

The company's latest accounts show that Hoople made a loss of £2.72m at the end of the tax year in 2017 which meant that the reserves are in a deficit of £3,798,384.

As a result, the liabilities, including the pension liability, are greater than the assets of the company.

However, Geoff Hughes, director for economy, communities and corporate at the council, said: "In terms of the overall position of Hoople. It is a jointly owned armed-length company started in 2011 between the council and the NHS.

"It operates a number of services for the local authority - HR, ICT, etc.

"Over the period of its life it has delivered a lot of shareholder value. The cost of us delivering these services have reduced by 50 percent."

He said there have also been further savings made.

He said the deficit relates to the local government pension scheme, which was transferred to Hoople and added: "Should Hoople never have been created this pension deficit would still be with us."

Andrew Lovegrove, chief finance officer, said: "If Hoople stopped trading, as the councillor suggested, the pension liability would transfer back to the council.

"The rules around valuing pension liability are quite complex. There are different assumptions that have to be used based on studies of cover."

The accounts read: "Hoople’s shareholders present over 80 percent of Hoople’s revenues. The shareholders have given an ongoing commitment to continue to purchase services from Hoople and indicated that they expect to conclude SLAs (service-level agreements) for 2018/19 before the commencement of that financial year. Hoople’s cash position remains strong and cash flow is good in respect of future years’ operations."