To receive any public questions, statements or petitions submitted in accordance with the Constitution. Further information on the requirements for submitting these is available to view at the following link:-
https://democracy.bcpcouncil.gov.uk/ieListMeetings.aspx?CommitteeID=151&Info=1&bcr=1
The deadline for the submission of public questions is 3 clear working days before the meeting.
The deadline for the submission of a statement is midday the working day before the meeting.
The deadline for the submission of a petition is 10 working days before the meeting.
Minutes:
The Committee was advised of the receipt of three public questions and three public statements, all in relation to Agenda Item 8:
Public Questions from Mr Alex McKinstry (Agenda Item 8)
Question 1.
In the officer's report on the governance of Council companies, paragraph 2.3 states there were initially going to be six Council representatives on the "shareholders team" of FuturePlaces, but this was reduced to two because of "budgetary pressures". I have to admit this is the first I've heard of a shareholders team on FuturePlaces. Who, then, were the original six; who were the ultimate two; and how did "budgetary pressures" have an impact, exactly - were the original team going to be remunerated, for instance?
Response:
The Cabinet Report approved on 29 September 2021 entitled ‘Accelerating Regeneration and Investment in the BCP area’ set out the need for a Delivery Team to provide oversight of all regeneration and development activity undertaken by BCP FuturePlaces Limited, the Bournemouth Development Company, and the Boscombe Towns Fund Board. This was to be a Council officer team consisting of six posts including a Service Director. However, not all posts were initially recruited to, and were subsequently deleted. In April 2023, the Service Director left the Council, and the post was taken as a saving. Since then, a further post has been made redundant. The remaining posts will form part of the new Investment and Development directorate which is being created following the closure of FuturePlaces as set out in Cabinet paper entitled ‘The Future of BCP FuturePlaces Ltd, Investment and Development’ which was approved on 27 September 2023.
Question 2.
Paragraph 2.10, meanwhile, states that the reason no commissioning agreement was ever finalised between the Council and FuturePlaces - nor any resource agreement - was "differences between the parties". What were these differences, and how come they weren't resolved during the two and a half years that the company was operating?
Response:
When FuturePlaces was created it was envisaged that a contract would be put in place setting out the working procedures for the delivery of services to the Council along with a Resource Agreement which would set out the provision of support services back to the company. Both these documents were complicated and required substantial information, including process mapping, to be collated. These processes inevitably evolved as the new company began to operate. There were no major ideological differences between the parties on the approach to be taken, however, the time required to align the detail of the contractual arrangement was substantial and officers from both the council and the company were unable to dedicate the time and resources required. As a result, although the documents were never finalised, the parties entered into the two agreements by conduct and adhered to the practical working arrangements set out.
Question 3.
Finally, the governance aspirations listed in Annexes B2 and C include the following: "C10. There should be evidence of ongoing assessment of value-for-money and quality offered by the entity through an adequately resourced monitoring function." To underscore the importance of this ambition, can you confirm:
i) The total amount of rent paid by FuturePlaces for its premises in Exeter Park Road, which it occupied between August 2022 (the signing of the licence agreement) and 31 October 2023 (its termination)
ii) The total amount of bonus payments paid to FuturePlaces staff in 2022 (said to be 10% of their base salaries) and in 2023 (said to be 12.5%). Can you also confirm what mechanisms were in place to ensure that these payments, i.e. the rent and the staff bonuses, constituted value for money?
Response:
i) The agreed rental was £54,000 per annum paid in advance. The rental amounts paid were £54k (Aug 2022 – July 2023) & £27k (August 2023 – January 2024), a total of £81k.
ii) The total amount of bonus payments paid to FuturePlaces staff in 2022 (said to be 10% of their base salaries) and in 2023 (said to be 12.5%):
FY22 Directors bonuses = £9,700 Other Employees = £6,907 (10.0%)
FY23 Directors bonuses = £36,875 Other Employees = £56,994 (12.5%)
As with any other company, it was the responsibility of the board of directors to ensure the rental costs represented good value for money. The board of directors is accountable to the shareholder for the performance of the company.
The bonuses were determined by the FuturePlaces Limited Remuneration Committee, which consisted of the non-executive directors of the company.
Public Statements from Mr Alex McKinstry (Agenda Item 8)
The figures in Statement 3 are taken from this FOI https://www.whatdotheyknow.com/request/funding_of_bcp_futureplaces_ltd#incoming-2063819 plus the paper at September's Cabinet, "The Future of FuturePlaces", and I'd be glad to provide references for any other assertions if needed.
Statement 1.
When FuturePlaces was formed, the Council paid external consultants to devise a commissioning plan for this outfit, and the result was a six-stage "gateway process" that would chart each project from inception phase to delivery; a commissioning team would be appointed, and a "project management office" established to manage the said gateways, monitor key milestones, and assess risk. That process was then refined, and the finessed procedure approved by full Council on 12 July 2022. Yet we find in tonight's report that KPIs were "absent" from FuturePlaces; there were "unclear and informal routes for operational decision-making", and the company was even initiating work "without a clear commission". This really is scandalous, and the Committee should drill into how and why the company's governance protocols were bypassed in such a way, as the eleven short paragraphs in tonight's report do the matter scant justice.
Statement 2.
The report also reveals, at Paragraph 2.11, that there were "differences in understanding between the Council and the company in relation to how the financial model works". This is incredible, not least because the then-Leader of the Council (and then-Portfolio Holder for Finance) was one of the executive directors. The finance model was the Aristotelian flaw in this company: my concern was that a political group with a majority could whip any scheme through full Council - regardless of its defects - to pay the company a success fee and thus get its loan repaid. Conversely, there was a risk that if schemes were not approved, the company would continue chomping through its loan facility - and it was this, indeed, that appears to have scuppered the company. The finance model was in short encircled with risk, and should not be repeated in any subsequent Council venture.
Statement 3.
Finally there is the matter of the company's costs, which aroused residents' concerns from the beginning. A working capital loan of £400,000 was advanced to the company in 2021 and drawn down in full. The company was then allocated £3.024 million from the revenue budget, of which £1,329,063 had been spent by June 2022 when the company was transitioning to capital. £647,000 transitional funding was then made available, followed by the £8 million loan facility of which £4.75 million had been spent by September 2023. That expenditure alone tots up to £7.1 million. Given the cryptic line on p. 91 of tonight's report - that company payments should not be approved "on the nod" - this Committee should request a full, forensic accounting of the expenses incurred by this company, including the costs of its imminent dissolution.