Meeting documents

To approve as a correct record the Minutes of the meeting held on 8 March attached as an Appendix.

RESOLVED –

That the Minutes of 8 March, 2016, be approved as a correct record.

Councillor Steve Bowles

Deputy Leader and Cabinet Member for Economic Development Delivery

To consider the information attached.

Contact Officer: Teresa Lane (01296) 585006

(a)       Decision(s)

(1)          That the input from the Economy and Business Development Scrutiny Committee be acknowledged.

(2)          That the AVE business Plan insofar as it relates to the refurbishment of commercial properties in Rabans lane, Aylesbury, be approved.

(3)          That approval of the remainder of the Plan be deferred for three months to enable the asset managers to address a number of issues raised by Cabinet.

(b)       Reason(s) for Decision(s)

            The partnership business plan provides the framework within which the board will operate and requires the Council’s approval.  Cabinet felt that in view of the increased income generation potential, that part of the Business Plan relating the refurbishment of commercial properties in Rabans Lane (scheduled to take place during the period covered by the Plan), should be approved.  Cabinet challenged robustly a number of the assumptions made in the remainder of the Plan concerning which it was felt that additional details should be provided, and felt that further information should be provided for Cabinet to review the position in three months time.

            To facilitate the discussion it was necessary to resolve to exclude the public for this part of the meeting in accordance with the provisions of the Local Government Act, 1972, because of the commercially sensitive nature of the business.

(c)       Alternative Option(s) considered

To approve the Plan in its entirety, but Cabinet felt that additional information was necessary before formal approval. 

(d)       Relevant Scrutiny Committee

            Economy and Business Development.  That Committee considered the draft business plan at its meeting on 15 March, 2016, and the Committee’s views, which were elaborated upon by the Committee Chairman, were taken fully into account in reaching the above decisions.

(e)       Conflicts of Interest / Dispensation(s)

None.

Members were aware that the Council and the Akeman Partnership had set up Aylesbury Vale Estates (AVE) in 2009, following a competitive dialogue procurement to manage, improve and develop the Council’s commercial property portfolio and provide an income stream to the Council.

At its meeting on 15 March, 2016, the Economy and Business Development Scrutiny Committee had received a report on AVE’s draft business plan, a copy of which was attached to the Cabinet report.  The Scrutiny Committee report had included a copy of the draft business plan (which had been attached to the confidential section of the Cabinet report).  The Chairman of the Scrutiny Committee, Councillor Strachan, elaborated upon the Committee’s deliberations.  Mr Graham Cole and Mr Philip Ingman of Akemman Asset Management also attended.

Cabinet was advised that the Scrutiny Committee had sought further information and in response to a number of specific questions, had been advised as follows:-

·         That AVE compared their performance against the Investment Property Databank (IPD) which was the standard benchmark for investors to analyse performance of property in the UK market.  AVE’s performance was consistently better than comparably managed properties.

·         The Committee had received details of the work and measures that AVE was taking to mitigate market uncertainties.

·         That broadband had been upgraded to Rabans Close, with a view to attracting more higher end users.

·         That while AVE had not externally benchmarked its performance, there was no reason why this could not happen in the future, subject to shareholder agreement.

·         That AVE would be interested in investing/managing centres and general convenience facilities in Aylesbury, should the opportunity arise.

·         That AVE would look to identify investment opportunities to grow/diversify the portfolio and enhance its value, in particular, opportunities that might arise from the emerging Vale of Aylesbury Local Plan.

Having commented on a number of specific issues relating to the confidential Appendices, the Scrutiny Committee had endorsed approval of the draft business plan.  However, The Committee had asked for a further report on AVE’s performance in six months time.

To facilitate discussion about the detail of the Business Plan, Cabinet resolved to exclude the public from the meeting under Section 100 (A) (4) of the Local Government Act, 1972, on the grounds that the item involved the likely disclosure of commercially sensitive information as defined in Paragraph 3 of Schedule 12A of the Act.  The disclosure of such information might prejudice negotiations for contracts and land disposals or transactions.

Cabinet Members challenged robustly some of the assumptions made in the Plan, both in specific and general terms.  In particular, the following issues were raised:-

·         The need for asset rental values to be updated to reflect the CBRE 2016 valuation.

·         The need for greater clarity around the actions proposed to meet the voids targets and clearer presentation of information concerning voids activities.

·         The need to be confident that suitable risk assessments had been undertaken in relation to AVE’s commercial activities over the period covered by the Business Plan.

·         The need for greater clarity around the  ...  view the full minutes text for item 2.

Councillor Howard Mordue

Cabinet Member for Finance, Resources and Compliance

To consider the attached information.

Contact Officer: Andy Barton (01296) 585430

(a)       Decision(s)

(1)          That the Audit Committee be thanked for its input to the principles of the guide.

(2)          That the guide entitled " Companies in which AVDC has a Financial Interest Guide" attached as an Appendix to the Cabinet report, designed to clarify the roles, responsibilities and relationships between the companies it owns and AVDC, be approved and adopted.

(3)          That nominations of shareholder representatives for AVDC companies be delegated to the Chief Executive, after consultation with the Leader of the Council.

(b)       Reason(s) for Decision(s)

            To ensure the good governance of AVDC’s financial interests in companies

(c)       Alternative Option(s) considered

To do nothing but this would fail to recognise the Council’s commercial approaches and the need to maintain good governance, transparency and accountability.

(d)       Relevant Scrutiny Committee

            None.  However, the Audit Committee was given an opportunity to comment on the guide and saw no objection to its adoption.

(e)       Conflicts of Interest / Dispensation(s)

None.

Cabinet appreciated that as the approaches of the Commercial AVDC programme, and in particular, the formation and ownership of companies had the potential to become more commonplace to fulfil the Council’s innovative and enterprising way in which to react to its financial challenges, there was a need to ensure good governance so that the Council’s actions and those of its companies were clear and transparent and accorded with the overall aims of AVDC.

To this end a guide had had been produced which set out how the relationships between any company in which AVDC had a financial interest and the Council as a corporate body, should be conducted.  The guide also covered in broad terms the way in which new companies should be developed.  The guide should be viewed within the context of the already existing control mechanisms for companies that Cabinet and Council had already agreed, such as the company business plans, articles of association and shareholders’ powers.

The governance of any company owned or invested in by AVDC was important as there was a need to:-

·         Ensure that it was clear for staff, the public, Members and company staff who was responsible for what, when and why.

·         Ensure that AVDC and the relevant company was clear on its roles and responsibilities.

·         Ensure that nothing was developed that conflicted with AVDC, or which placed AVDC in an unlawful position.

·         Ensure that any and all legal or contractual issues were complied with.

·         Ensure that the relevant company was operating ethically and that transparency accorded with the Council’s legal responsibilities.

Good corporate governance was aimed at ensuring that all the above were adhered to in order to maintain and improve the image of the company and that AVDC ensured overall that the company delivered against the reasons for which it had been created, and its business plan. It was also important that there was consistency across all companies that AVDC might own or relate to, so that there was a common understanding for all partners involved in oversight and management.

The aim of any company owned or part owned by AVDC was to produce overall benefits for the residents and businesses within the Vale.  This might be through investment, commercial opportunity, a host of other reasons, or simply by generating income for the Council through divided payments funded from profit.  This also might be through purchasing or re-selling elements of Council services which might result in an overall better position for the Council.  This overarching aim should be at the heart of all decision making, and the guide sought to assist in developing these approaches.

The guide set out a number of principles wholly or partly owned companies should deliver.  It was recognised that companies created prior to the publication of the guide might not be fully compliant, or those which were not 100% owned by AVDC.  However, where possible these should be transitioned over the medium term to align with the guide wherever practicable.  AVDC’s current financial interests were as  ...  view the full minutes text for item 3.