Issue - decisions

Buckinghamshire Council had a number of mainly property based subsidiary companies and limited liability partnerships in place (Buckinghamshire Advantage, Consilio Property Ltd, London Road Business Park Management Ltd and Aylesbury Vale Estates).  It was timely to review overall all governance arrangements to ensure continued visibility and reinforce best practise to deliver statutory arrangements.

An audit report on Nottingham City Council’s arrangements relating to its company, Robin Hood Energy, had stressed the need to ensure that “sufficient checks and balances were in place and in particular that risks were appropriately recognised and managed, that there was an effective scrutiny function and that challenge of political priorities by both members and officers was seen as a positive. This provided an important message that all councils establishing commercial entities should be alive to what is referred to as “institutional blindness”.  The Council was also aware that external auditors, such as Grant Thornton, had issued public interest reports where local authority companies had performed poorly and where it was found that governance arrangements were not adequate.

Buckinghamshire Council was committed to maintaining strong and robust governance to ensure that decisions were taken in the best interests of the communities it served.  As part of this commitment, the Council constantly reviewed its governance arrangements alongside learning best practice with other authorities to ensure the Council continues to meet its statutory obligations in the best way.

Oversight of the Council’s companies and limited liability partnerships was currently in place with visibility of Board Minutes and supporting papers being sent to the relevant Cabinet Members, Cabinet Member for Finance, Resources and Property & Assets, and senior officers: Director for Property and Assets, Head of Legal, Section 151 officer, and Head of Finance. Business plans of subsidiaries were scrutinised by Cabinet and the Finance and Resources Select Committee. Finance officers regularly attend board meetings of Consilio Property Ltd and Buckinghamshire Advantage.

The proposal for a shareholder committee was consistent with the best practice advice in the recent Local Authorities Companies Review Guidance.

RESOLVED –

(1)          That the creation of a Shareholder / Member Committee, as detailed in the Cabinet report be approved,to ensure that companies and limited liability partnerships act in the interests of the Council as shareholder, Member and/or lender and contribute to the Council’s objectives.

(2)          That the draft Terms of Reference be noted, and authority be delegated to the Service Director – Property and Assets, in consultation with the Cabinet Member for Finance, Resources, Property and assets to approve the final Terms of Reference.

(3)          That authority be delegated to the Service Director – Property and Assets, in consultation with the Shareholder / Member Committee, to agree final terms and enter into each Memorandum of Agreement with the relevant company and/or Limited Liability Partnership.

(4)          That authority be delegated to the Service Director – Property and Assets, in consultation with the Shareholder / Member Committee to approve final terms and arrange to enter into any Service Level Agreements where corporate functions provide support services to the relevant company and/or Limited Liability Partnership.