Decision details

To set up InvestSK as a Company Limited by Guarantee

Decision:

1.               The Cabinet agrees Option 4, as set out at clause 6.5 in this report iSK002, to establish InvestSK as a private company limited by guarantee, with the Council as the sole member.

2.               The Company, as a company limited by guarantee, will not have a share capital. Rather, as sole member, the Council will guarantee the liabilities of the Company up to the amount of £1.

3.               The following be appointed as Directors of the Company:

3.1         Councillor Matthew Lee, the Leader of the Council (Chairman).

3.2         Councillor Kelham Cooke, the Deputy Leader of the Council

3.3         Aidan Rave, the Chief Executive of the Council

4.               The Board determines who should be nominated to become the Company Secretary.

5.               The Board appoints an interim Chief Executive.

6.               Delegated Authority be given to Councillor Mike King, Cabinet Member for Economy and Development, to put in place the proposed Memorandum of Understanding, to determine membership of the Advisory Committee, agree the Articles of Association for InvestSK and to agree an initial award of seed funding to allow the incorporation process to take place.

Considerations/Reasons for decision

1.    Report number iSK002 of the Leader of the Council on the formation of InvestSK as a company limited by guarantee

2.    A current economic worth for the district of £2.7bn and aim to add a further £1.2bn

3.    An announcement made by the Leader of a series of projects to achieve the first £400m of this growth through a £40m investment

4.    Key benefits of InvestSK including:

a.    A business-focussed approach encouraging the private sector to bring forward land, property, investment and business growth

b.    Being distinct from the local planning authority

c.    Making introductions between confirmed business enquiries and the Council and supporting the business through formal procedures

d.    It is already recognised as a named brand in the District

e.    It is developing wider initiatives to grow economic and community wellbeing        

5.    The Companies Act 2006

6.    Provision for InvestSK was included in the 2018/19 Budget

7.    S1 of the Localism Act 2011 which gave local authorities a general power of competence

8.    A letter received from the Burghley Preservation Trust and the response given

Other options considered:

The following options were considered for the longer-term solution for InvestSK:

Option 1: Continue, 'as is', supported by Opportunity Peterborough

This would involve a core team of officers from the Council, supported by the team from Opportunity Peterborough who would be contracted to the Council.

Pros: This approach is tried and tested, and the engagement with businesses and progress on projects has been positive.

Cons: Whilst InvestSK acts as – and is perceived by businesses as – an arms-length company to the Council, there are certain constraints placed on InvestSK by virtue of it being a 'rebranded' economic development team. If InvestSK is to reach its full potential, this will need to be as a separate entity to the Council.

Whilst the current formation of InvestSK allows strong business-to-business performance, the credibility of InvestSK will be further-enhanced, and it will be able to deliver at a greater pace, by it being a separate company. This option has therefore been rejected.

Option 2: Continue, 'as is', but unsupported by Opportunity Peterborough

This option is similar to Option 1 above, but without the expert support and advice that is currently contracted through Opportunity Peterborough.

Pros: InvestSK would move towards a potentially more sustainable model, with its economic support being provided in-house, or even by an alternative provider.

Cons: The Opportunity Peterborough team bring a wealth of knowledge and experience in terms of economic development and to change this whilst InvestSK is relatively 'young' may negatively impact on the good progress achieve to date. This option would also fail to capitalise on the benefits of InvestSK being a separate company (as described in option 1, above).  

This option has been rejected because it would undermine current progress and fail to build on the full potential of InvestSK.

Option 3: De-brand and revert to in-house only

This option would see a reversion to a traditional form of economic development support, similar to what was in place before InvestSK was created.

Pros: There are not considered to be any benefits to this approach.

Cons: This option would waste the momentum and credibility already established by InvestSK with external partners, particularly in the private and third sectors.

This option was rejected because it was considered to be a retrograde step, for the reasons set out above.

Option 4: Set-up InvestSK as a separate company

There are various types of company that can be set up. It is normal for local authorities to set-up companies that are wholly-owned by the Council and which are limited by guarantee, or by shares. Although InvestSK will initially be funded by the Council the intention is that, through its activities, it will gradually become self-sustaining. The intention is to run InvestSK as a "not for profit" organisation, with any income being reinvested and not being returned to the Council. This aim is broadly in line with establishing InvestSK as a company limited by guarantee.

Pros: This option would build on the credibility of InvestSK, as a brand, within the business sector and provide freedoms to make decisions, at pace, in-line with the expectations of the business community.

Cons: There are not considered to be any dis-benefits to setting-up InvestSK as a separate company.

This option is favoured because it builds on the momentum and credibility already established by InvestSK in its current guise.