Agenda item

This report details Part A - BCP FuturePlaces Ltd investigation findings covering scope areas 1 to 4.

The Chair of A&G Committee has determined a second meeting will be arranged in October 2025 to receive Part B and final report, covering scope areas 5 to 8. 

Receiving the report over two meetings will allow the Committee sufficient time to digest and review the findings to determine next steps. It will also allow the investigator more time to conclude findings in scope areas 5 to 8.

At the conclusion of this investigation there may still be gaps in understanding, and the Committee may or may not decide that further investigation through other means is required.

The Chair set out some background to why this meeting was being held and the way she proposed to manage this item.  The Chair also highlighted that as this was an interim/draft report, no recommendations should be made at this meeting, but it was an opportunity to seek clarity and discuss whether further information was required when the final report was published.

 

Finally, the Chair suggested that members might choose to provide individual summary reflections at the conclusion of the next meeting, to offer varied perspectives to the public. Participation would be voluntary, and no judgement would be made on those who opted not to contribute.

 

The Head of Audit and Management Assurance (HAMA) presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

 

The report detailed Part A - BCP FuturePlaces Ltd investigation findings covering scope areas 1 to 4.

 

The Chair of A&G Committee had determined a second meeting would be arranged in October 2025 to receive Part B and final report, covering scope areas 5 to 8. 

 

Receiving the report over two meetings would allow the Committee sufficient time to digest and review the findings to determine next steps. It would also allow the investigator more time to conclude findings in scope areas 5 to 8.

 

It was highlighted in the report that at the conclusion of this investigation there may still be gaps in understanding, and the Committee may or may not decide that further investigation through other means was required.

 

The Committee discussed the report breaking down each section of the scope to consider them one at a time.

 

Scope 1. Timeline and key decisions:

 

1.1Produce the timeline of key decisions in respect of BCP Future Places Ltd (as per MO report to A&G Committee 20/3/25).

 

• The Chair suggested the timeline be used as a reference point throughout the meeting and as a basis for the closing discussion.
• There was an acknowledgement of the significant work by officers in compiling the timeline and some Committee Members advised they had cross checked links and reports and found them to be accurate and consistent.
• The Chair reiterated that the timeline can be added to during the discussion and used to support further lines of enquiry.
• A Committee Member requested the inclusion of the report of the Monitoring Officer (MO) to the Audit and Governance Committee on 20 March 2025 to the end of the timeline.

 

Actions highlighted for this item:

 

• Request HAMA add the MO’s report to the end of the timeline to demonstrate the action which had been taken by the Committee.

 

1.2Find and restate the motivations and considerations behind the decision to create a Urban Regeneration Company (URC) and the environment for decision making in which it was created.

 

• A concern and observation was made that the 'Big Plan' was never formally ratified at Full Council.
• Acknowledgement that the timeline showed the evolution of thinking and the perceived need to expand beyond internal capabilities.
• The Chair questioned the thoroughness of assessing internal capability within BCP Council before deciding external action was necessary.

 

Scope 2. Decision to create BCP Future Places Ltd – Cabinet 26 May 2021:

 

2.1 Review the authority of Cabinet to establish an Urban Regeneration Company was in line with the Council’s Constitution and did the report set out the risks, rewards, pros and cons.

 

• The Chair reflected that the Cabinet report (26 May 2021, page 39 of the Report) set out risks and considerations in detail.
• There was some concerns raised and discussion regarding the procurement of services from Inner Circle Consulting and the recommendation they gave of a Urban Regeneration Company (URC) model
• A Committee Member suggested that had due diligence been undertaken when contracting with Inner Circle Consulting then the Committee should be reassured about the appointment and advice provided.
• The Chair highlighted that the potential risks were detailed and the possible attraction to the URC model, was its flexibility.
• Members discussed the tension between operating as a private company while using public funds and the model chosen.
• In response to a query regarding the less explored options, the Committee was referred to pages 102–103 in the appendix which provided a deeper dive into the options appraisal, which detailed why a strategic partnership model would not achieve the objectives required.
• A Member acknowledged that the risk register supported the URC model and that Councillors likely acted on the best available expert advice.
• Historical context was provided, noting the complexity of regeneration across BCP’s geography.
• General consensus emerged that the URC model was a valid approach, given the professional advice provided at the time.

 

Actions highlighted for this subsection:

 

• Confirm whether due diligence was undertaken in the appointment of Inner Circle Consulting.

 

2.2 Review the approval of the final business case by the Chief Executive and the inclusion of the information as requested by Cabinet.

 

·       A Member raised concerns about the procurement process for Inner Circle Consulting, questioning whether appointments were made through standard procedures and without undue influence.

·       It was noted that Inner Circle Consulting was involved in both the options appraisal and the regeneration portfolio review, prompting questions about independence and transparency.

·       Officers confirmed that the procurement process had not yet been reviewed in detail and agreed to investigate whether one or two separate procurement processes were used.

·       The complexity of contract aggregation was acknowledged, with officers noting it was often difficult to foresee future work at the outset.

·       A Member emphasised the need to understand the decision-making responsibility, distinguishing between operational delivery of officers and strategic choices.

·       A change in the funding model from revenue-based to a working capital loan was discussed, with confirmation that increased funding was drawn from the Financial Resilience Reserve and was agreed through the normal constitutional process.

·       In response to a query regarding the £2 billion gross development value cited in reports, it was confirmed that the figure originated from the Inner Circle report dated 26 May 2021.

·       Officers confirmed that the URC setup plan was clearly outlined in the officer decision record and followed through accordingly.

·       A discrepancy was noted between £2 billion and £3 billion figures cited in different meetings, prompting calls for clarification and transcript review.

·       The Chair highlighted a comment made by a Councillor who was not on the Committee that noted that the URC was preferred over the Bournemouth Development Company model due to the ability of a Teckel comany to be fully within Council control as the only Shareholder.

·       The Chair advised that while the process appeared thorough, follow-up questions remained which needed to be considered further.

 

Actions highlighted for this subsection:

 

·       The HAMA to investigate the procurement process for Inner Circle Consulting, including whether it involved one or two separate procurements.

·       Verify the discrepancy between £2 billion and £3 billion cited in different meetings, including checking transcripts and impact on decision-making.

 

Scope 3. Establishment and operation of BCP Future Places Ltd.

 

3.1 Identify the process for the appointment of the company’s Executive and Non-Executive Directors and other staff (was an appropriate open and transparent process followed).

 

·       Members expressed serious concerns over the recruitment process for the Managing Director (MD) and other senior roles at FuturePlaces, noting apparent pre-selection and lack of open competition.

·       Concerns were raised about the high salaries and consultancy fees paid, including £900/day consultancy rates and Members discussed whether such salaries were appropriate for a Council-owned company.

·       The HAMA clarified that salary levels were set having been job evaluated, aligned with Council corporate director roles and was a Council decision.

·       Members discussed the lack of governance structures at the inception of FuturePlaces, noting that recruitment protocols were established only after initial appointments had been made.  The tension between a private start up company using public funds was highlighted by the Chair.

·       The HAMA advised the Committee that the Council was only responsible for the recruitment of the FuturePlaces Managing Director, will all other appointments being their responsibility.

·       It was highlighted as a possible recommendation that governance and recruitment expectations should be clearly defined from the outset for any future Council-owned companies,

·       The Chair advised she would welcome further investigation into the required qualifications and experience to fulfil the directorship roles appropriately.

·       A Member stressed the need for the Committee to remain impartial and avoid language that could reflect negatively on the former FuturePlaces Directors.

·       There was some debate and expressed concerns about the balance of input from former FuturePlaces officers and the former Chief Executive, with calls for equal opportunity to provide evidence. 

·       In response to a query, the HAMA confirmed that Scope 8 was an aggregation of lessons learnt and changes which had been implemented as a result.

·       Some Committee Members highlighted they had already submitted questions to the HAMA or would like to and it was confirmed they would be considered as part of the final report.

·       A Member expressed concern regarding the costs incurred to date for this investigation and stressed the Committee needed to be mindful of Officer resource.

·       The Chair concluded the discussion by acknowledging the differing views presented, however, felt that targeted questions to relevant key personnel would help the Committee deepen its understanding of the situation.  It was also highlighted that the ex-Managing Director of FuturePlaces had contributed some information which was included in the report.

 

Actions highlighted for this subsection:

 

·       The HAMA to consider how it would be possible to investigate the legality and appropriateness of the recruitment process for the MD and senior officers.

·       Invite former FuturePlaces officers to respond to targeted questions  following the conclusion of consideration of the HAMA’s full report.

·       Clarify how consultancy rates and salaries were determined, including any market comparisons or procurement procedures.

·       HAMA to consider questions sent from Committee Members.

 

3.2 Consider the adequacy of the governance arrangements put in place by the Council for the operation of BCP Future Places Ltd.

 

• Clarification was provided that a commissioning plan existed, but the commissioning contract (detailing payments and milestones) was missing, which could have led to possible operational ambiguity.
• It was confirmed that the Council had initially agreed to pay only upon delivery of a full business case, which FPL found financially risky and sought to renegotiate resulting in the delay in confirming the commissioning contract.
• It was explained by the HAMA that the initial governance setup was intended to be temporary, but recruitment of independent non-executive directors took longer than anticipated.
• In response from a concern regarding the lack of opposition Councillors on the FPL Board, it was noted that the Overview and Scrutiny Board had previously voted on the governance structure, recommending cross-party representation, which was not adopted.
• It was noted that governance issues were regularly discussed at FPL board meetings, but resolution was complex and required external officer involvement.
• The Chair raised a concern regarding ‘scope creep’ as detailed in the report, with projects evolving beyond original plans, possibly due to informal requests and whether further investigation in this area was required, including how it was managed.
• The Big Plan Delivery Board was mentioned by the HAMA as a possible source of project evolution, creating increased scope around already proposed projects.
• A Member questioned whether FPL met its Teckal company obligations, particularly regarding Council control and activity thresholds.
• Ambiguity in governance language (e.g., “the Council”) was highlighted as a concern, especially regarding matters like pay, bonuses, and asset sales and where did the decision-making lie, was it with Officers, Full Council or Cabinet.
• The Chair highlighted a key point referencing an emai from the Commissioning team within the report requesting the need for progress reports and KPIs to monitor the work of FPL.
• Members reflected on the need for clear protocols and transparent decision-making.

 

Actions highlighted for this subsection:

 

·       Add to the enquiry list a request for Future Places’ Directors perspective on the absence of the commissioning contract and resource agreements.

·       Clarify governance terminology in future documents to specify whether decisions lie with Cabinet, full Council, or shareholder representatives.

 

3.3 Consider the adequacy of the governance arrangements put in place by the company executive directors for the day to day operation of Future Places Ltd

 

·       Members discussed the list of HR policies provided, noting they appeared generic and possibly not tailored to the specific needs of Future Places Ltd (FPL).

·       Concerns were raised about inconsistency in applying Council policies, particularly around pay scales and benefits, such as pensions.

·       Members acknowledged the tension between wanting clarity for staff and the practical challenges of applying Council rules to a separate legal entity and the Chair advised that this would need some further consideration.

·       A Member reflected on similar arrangements with other Council-related entities like BH Live, noting that initial setup decisions often evolve and diverge over time.

·       In response to a query, it was confirmed that the Council’s financial regulations were adopted.

·       The Chair noted that it appeared that there were misunderstandings between what the Council expected and what FPL understood its obligations to be, particularly in the early operational stages.

 

Actions highlighted for this subsection:

 

·       Consider a recommendation regarding a clear policy framework for Teckal companies regarding whether Council policies should be fully adopted or selectively applied.

 

With agreement from the Committee, the Chair advised that the following sections of the scope would be grouped together for consideration:

 

3.4 Consider the adequacy of business planning arrangements as applied by BCP FuturePlaces Ltd.

 

3.5 Consider the adequacy of the financial and performance management as applied by BCP FuturePlaces Ltd, and applied to BCP FuturePlaces Ltd by the Council, including consideration of ongoing risk and issues management.

 

3.6 Consider the adequacy of decision making regarding the prioritisation of projects and the deliverability for the Business Plan as managed by BCP FuturePlaces Ltd.

 

·       Members discussed the interpretation and application of project responsibilities, noting ambiguity in management roles and expectations.

·       Members agreed that more information was needed about the relationship setup and expectations between parties involved and the Committee was advised that this information would need to be sought from the FPL Directors.

·       The Chair highlighted Section 3.5.11, acknowledging the submission of ongoing work lists by FPL’s MD, which illustrated significant activity beyond initially commissioned projects.

·       A footnote in Section 3.3 was also noted by the Chair, commending staff efforts but highlighting Councillors lack of understanding of actual achievements.

·       A Member raised concerns about changes to monthly management accounts and suggested questioning the Chief Operating Officer and Managing Director for clarification.

·       The issue of ‘mission creep’ was discussed, with a request to understand its origin and progression during Future Places’ operation.

·       Members debated the use of draft status in documents, noting it was common but potentially used to limit public access and avoid scrutiny.

·       It was suggested that recommendations be made regarding clarity of access to documents and the appropriate use of draft status.

 

Actions highlighted for this subsection:

 

·       FPL Directors to be asked about the items highlighted within this section, including the relationship set up and expectations, the provision of monthly management accounts and ‘mission creep’.

·       Recommendation to be considered regarding the use and implications of the term ‘draft’ and the need to ensure progress could be monitored and scrutinised as appropriate.

 

A Committee Member who was substituting, provided a summary of her opinion on Part A of the draft report.

 

It was highlighted that the Committee had received a briefing regarding the financial elements detailed at Section 4 of the report and that this would be considered in detail at the next meeting.

 

The Chair thanked Officers and the Committee and concluded the meeting by confirming that Scope 4 would be considered alongside the rest of the final report at the next meeting and should anyone have information relating to the investigation they wished to be considered by the HAMA and Committee, please do make contact.