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 midday on Friday 22 November [midday 3 clear working days before the meeting].
The deadline for the submission of a statement is midday on Wednesday 27 November [midday the working day before the meeting].
The deadline for the submission of a petition is Thursday 14 November 2024 [10 working days before the meeting].
Minutes:
Public Questions received from Mr Alex McKinstry in relation to Agenda item 6 – Statement of Accounts 2022/23
Question 1
Did Grant Thornton receive any extra payment for the feedback it provided relating to the 2022 budget (and in particular, the beach hut scheme that underpinned it)? If so, what was the amount paid? Can you also confirm whether GT's advice was presented in a report or paper of any description, and if so, what was the date of any such document?
Response:
Grant Thornton’s 2020/21 Audit Findings Report finalised on 2 March 2023 included a final fee for the audit. Within this it included additional fees for value for money work for the year totalling £20,000 which covered a whole raft of additional value for money work undertaken in the year based on a number of risks identified by the auditor. This additional work included work on the proposed beach hut scheme and discussions with DLUHC on BCP’s proposal, but also included significant work on numerous other areas to conclude their work. There was not an individual amount for the beach hut scheme work in isolation. In terms of Grant Thorntons advice, they cannot provide advice to the Council as this would compromise their independence. If they had concerns about any potential decision, they would raise it with officers, but it is ultimately a decision for the Council. The 2020/21 VFM report of the 28 September 2022 details their consideration of the potential beach hut scheme.
Question 2
Regarding the controversial 2023 budget amendment, which was never in fact put forward: what exactly was this proposal, and what were the elements that made it "innovative and high-risk"? We know the then-Leader had a specific scheme in mind because it is described, on p. 60 of tonight's reports pack, as "a proposed income strip of a Council-owned asset" that would have generated a capital receipt and revenue stream. Was any file note or memorandum made of the meeting between Peter Barber, Graham Farrant and Adam Richens on 13 January 2023 where this scheme was discussed; and were any concerns relayed to Lee Rowley, Minister of State at DLUHC, who rang Drew Mellor at 1.30 pm on 19 January 2023 (seemingly out of the blue) and wrote to him six days later cautioning against a "commercial scheme that carries risk"?
Initial response:
This question is not straight forward and will take longer than the relatively short period of time between the submission of the question and this meeting to prepare a response. The intention is to include a detailed response with the minutes of this meeting.
Full response:
As set out in the 2022/23 Value for Money report of the External Auditor the proposal which was not formally put forward was a possible income strip of a Council-owned asset. In an income strip, a Council typically sells a long leasehold interest in an asset while retaining ownership of the freehold. The Council receives a substantial upfront payment, normally as a capital receipt, and then leases back the property, making annual lease payments indexed to inflation. Such agreements typically include a buy back option at the end of the lease period for a nominal sum and allow a Council to swap its future income for an upfront capital receipt. The then Leader of the Council was proposing to use some or all of the upfront payment on an income strip to support the revenue budget for 2023/24. No detailed business case had been presented to Cabinet or Council in support the proposal. The Council was at that time part of the Government’s Exceptional Financial Support programme and had given the Ministry of Housing, Communities and Local Government (MHCLG) assurances that it would produce its 2023/24 budget based on traditional and conventional approaches to local government finance. The Council Director of Finance issued a warning in a presentation to all Councillors on 18 January 2023 that he would not sign off the budget if this proposal was put forward by the administration as an amendment to its own proposed budget for 2023/24. The External Auditor, Peter Barber, had been previously notified on the 13/1/23 of the proposal by the Director of Finance and Chief Executive, and MHCLG were also informed of the proposal by the Chief Executive on 13 January 2023 in a Teams meeting. It is understood that both a minister of MHCLG and the External Auditor then made direct contact with the then Leader of the Council setting out their own concerns with the proposal.
As a footnote can I remind the committee that this proposal was never implemented and does not relate to the current 2024/25 approved budget or the developing proposals for the 2025/26 budget of the Council. Can I also remind the committee that they have already received and accepted the 2023/24 Value for Money report of the External Auditor (A&G Committee 25 July 2024) which brought their assessment up to date and set out the improvement from that reported for 2022/23.
Question 3
This relates to the Council's sale of assets in 2022-3, though it also overlaps Item 9, matters of governance concerning land disposals. Is there anyone still around who can explain why the Airfield Industrial Estate at Christchurch was divided into lots prior to being approved for sale by full Council on 10 January 2023, whereas the Wessex Trading Centre and the trading estate at Willis Way were not? Just in case the answer involves value for money considerations: the guide price for "Lot 54" on the Airfield Estate (as the agent dubbed it) was reduced from £510,000 to £275,000 in the week prior to the auction; and since this was an auction, bidding would have presumably started much lower.
Response:
The units at Airfield Industrial Estate were divided into lots because they are separate buildings/ plots spread out over the estate served by an adopted highway and the recommendation from the valuer that undertook the Red Book valuation was to dispose of them separately to realise the highest aggregate price. Wessex Trade Centre on the other hand is an industrial estate where the 57 units in 8 terraces are intrinsically physically linked to each other being served of a private service road system. They share the same access and the common parts are managed via a central service charge.
Public statement received from Susan Stockwell in relation to
Agenda item 9 – Governance surrounding Disposal of Council land and property
Could disposal include entering into contracts for options to purchase as well as outright disposal.
Public statement received from Philip Gatrell in relation to Agenda Item 7 – Review of the Council’s Constitution
Agenda Item 7 includes the following Constitution Review Working Group Recommendations:
(d) Appointment of Committee Member to … Review Working Group
The Recommendation has complementary practical merit, given the precursory nature of Review Group input regarding this Committee’s Constitutional regulatory function “… to consider any issue of Council non-compliance with its own and other relevant published regulations … “.
(e) “ … necessary and consequential … updates and revisions … delegated to … Monitoring Officer”
This highlights a continuing misleading oversight in the Constitution concerning misstatements of the Monitoring Officer’s reporting duties under Sections 5 and 5A of the Local Government and Housing Act 1989 (1989 Act).
Any residual doubts are dispelled by this resident’s progressive public statements to the Committee on 11 April, 25 July and Council on 20 February, 23 July, 15 October 2024.
The correction is mandatory not delegated. Nor is it contentious in view of the unambiguous legislation and Ms Berry’s conformity as stated in Birmingham Council’s Constitution during her tenure.
Public statement received from Philip Gatrell in relation to Agenda Item 8 – Transparency of officer decision making and accountability to Councillors
Ensuring the transparency and accountability stated at Agenda Item 8 is the responsibility of the “1989 Act” triumvirs comprising Chief Executive, Monitoring Officer and Director of Finance.
Since 1 April 2019 those Officers’ statutory and contractual responsibilities have been skirted by:
• Resisting correct and full statement in the Constitution concerning Monitoring Officers’ 1989 Act reporting of contraventions of law; maladministration; service failures. Those immutable duties require the minimal text explained in my previous public statements.
• Obscuring Councillors’ awareness of Officers’ defective decision making thus also their performance and accountability. When, for example, 1989 Act reports have hitherto been omitted - with the single exception of a “Section 5” report arduously coaxed out by this resident.
The current Monitoring Officer appointed in December 2023 will naturally - by statutory duty without fear or favour - action without delay the correct practices identified above.
Accordingly, systemic weaknesses must not continue unbridled by Councillors aware of accruing significant failings.
Public statement received from Alex McKinstry in relation to Agenda Item 6 – Statement of Accounts 2022/23
I was disappointed at Grant Thornton's refusal to issue a public interest report following the failure, by officers, to provide accounting records during the 2022 and 2024 statutory inspection periods. This in turn deprives an elector of his right to examine, query, or object to the accounts, rights conferred by Sections 26 and 27 of the Local Audit and Accountability Act. These rights, moreover, are valuable, as an auditor cannot study every transaction made by a local authority; and especially valuable against the backdrop of 2020-3, the abyssal period of BCP's governance. (The incarnadine caveats swathing page 35 of tonight's paperwork - "Value for money arrangements: Auditor judgment" - support this.) I do note however Grant Thornton's concession, in their letter to me of 8 November, that "were the issue that you have identified ... to persist in future years, then we may consider it appropriate to investigate further."
Public statement received from Alex McKinstry in relation to Agenda Item 9 - Governance surrounding Disposal of Council land and property
The committee heard on 17 October that leaks of exempt information, and associated risk management, might be incorporated into tonight's presentation. Further information has emerged since then. There is no doubt, for instance, that the leak to the Echo concerning Wessex Fields came from a councillor, not an officer; this is supported by the MO's email to all members sent on 1 May (11.44 am) in the wake of that divulgence. There is no doubt either that the Echo's initial claim, that the site was being sold at an undervalue, was totally untrue. This is supported by other correspondence including a stinging email to Tobias Ellwood from the Chief Executive on 25 May, obtained under FOI). Let's get these facts out there. The Wessex Fields leak was clearly a malicious attempt to taint the administration via misinformation, and the culprit is unfit for office.