Issue - meetings

This report sets out the action taken to ensure appropriate and effective governance of Council owned companies including the independent governance review undertaken by DLUHC, a self-assessment review of Council-owned companies undertaken by the Council’s internal audit team, and the governance review undertaken by the Interim Chair of BCP FuturePlaces Ltd which considered lessons learnt over the first year of operation.

Following the work undertaken above and the subsequent closure of BCP FuturePlaces Ltd, a review of shareholder governance arrangements for all Council-owned companies was undertaken by the Interim Corporate Director for Resources in November 2023.

The review recommends changes designed to provide clearer understanding of the respective roles, decision-making arrangements, and improved accountability along with next steps for implementation should these recommendations be approved.

RESOLVED that Cabinet: -

(a)            Approved the shareholder governance model set out at Appendix 1 for adoption by the Council in relation to all Council companies with immediate effect, subject to the amendment of the third red box on the right, replacing the words “Company has no role at scrutiny –“ with “Company may be requested to provide evidence to support scrutiny as required .”;

(b)           Noted that the future arrangements for Council companies will be based on the Local Partnerships best practice model, Local Authority Company Review Guidance;

(c)            Noted that a review of all Council companies will be undertaken based on the work started by internal audit and actions plans completed to ensure that the company arrangements comply with the best practice model. This review will be completed by 31 March 2024 with progress and subsequent action plans reported to Cabinet in July 2024;

(d)           Noted that the review of council companies will also consider in each case whether the original reason for establishing the company still applies and appraise the future options for delivering the function performed by the company, taking into account the cost benefits, the benefits to residents, the potential for accountability and transparency, and the avoidance of potential conflict between the aims of the council and those of the council company; and

(e)            Noted that although the scope of this report is limited to companies where the council is a shareholder, a second phase that will be the subject of a future report will consider council control and representation on the boards of other organisations such as charities, associations, community interest companies, and societies.

Voting: Unanimous

Portfolio Holder: Transformation and Resources

Reason

To ensure that all Council owned companies operate within effective and transparent governance.

The Portfolio Holder for Transformation and Resources presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'H' to these Minutes in the Minute Book.

Cabinet was advised that the report set out the action taken to ensure appropriate and effective governance of Council owned companies including the independent governance review undertaken by DLUHC, a self-assessment review of Council-owned companies undertaken by the Council’s internal audit team, and the governance review undertaken by the Interim Chair of BCP FuturePlaces Ltd which considered lessons learnt over the first year of operation.

Cabinet was informed that following the work undertaken above and the subsequent closure of BCP FuturePlaces Ltd, a review of shareholder governance arrangements for all Council-owned companies was undertaken by the Interim Corporate Director for Resources in November 2023, and that in relation to this the review recommended changes designed to provide clearer understanding of the respective roles, decision-making arrangements, and improved accountability along with next steps for implementation should these recommendations be approved.

In presenting the report the Portfolio Holder moved amended recommendations to that presented in the report which sought to take account of the debate at the recent Overview and Scrutiny Board where the report was discussed.

The Chairman of the Overview and Scrutiny Board addressed the Cabinet highlighting the comprehensive discussion which had taken place on this item at the recent meeting of the Board and thanked the Portfolio Holder and Corporate Director for reflecting on the comments from the Board and for the amended recommendations. In addition, the Chairman advised that the Board had welcomed the report.

RESOLVED that Cabinet: -

(a)            Approved the shareholder governance model set out at Appendix 1 for adoption by the Council in relation to all Council companies with immediate effect, subject to the amendment of the third red box on the right, replacing the words “Company has no role at scrutiny –“with “Company may be requested to provide evidence to support scrutiny as required .”;

(b)           Noted that the future arrangements for Council companies will be based on the Local Partnerships best practice model, Local Authority Company Review Guidance;

(c)            Noted that a review of all Council companies will be undertaken based on the work started by internal audit and actions plans completed to ensure that the company arrangements comply with the best practice model. This review will be completed by 31 March 2024 with progress and subsequent action plans reported to Cabinet in July 2024;

(d)           Noted that the review of council companies will also consider in each case whether the original reason for establishing the company still applies and appraise the future options for delivering the function performed by the company, taking into account the cost benefits, the benefits to residents, the importance for accountability and transparency, and the avoidance of potential conflict between the aims of the council and those of the council company; and

(e)            Noted that although the scope of this report  ...  view the full minutes text for item 88