Agenda and minutes

Companies Committee - Tuesday, 25th January, 2022 2.00 pm

Venue: Council Chamber - South Kesteven House, St. Peter's Hill, Grantham. NG31 6PZ. View directions

Contact: Democratic Services 

Items
No. Item

31.

Apologies for absence

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    Minutes:

    Apologies for absence were received from Councillor Susan Sandall.

32.

Disclosure of interests

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    Members are asked to disclose any interests in matters for consideration at the meeting

    Minutes:

    There were none.

33.

Minutes of the meeting held on 2 November 2021 pdf icon PDF 163 KB

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    Minutes:

    The minutes of the meeting held on 2 November 2021 were proposed, seconded and AGREED as a correct record, subject to the following amendment:

     

    ·       That the appointment of Councillor Paul Wood as a Director of Environment SK Ltd be clarified as personal, based on his abilities rather than on behalf of the Independent Group.

     

     

34.

Updates from the previous meeting pdf icon PDF 103 KB

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    To consider updates on Actions agreed at the previous meeting.

    Minutes:

    Members noted the updates on actions agreed at the previous meeting.

     

    An enquiry was made regarding the outcome of the relaunch of the Stamford Business Club.  It was noted that Grantham, Bourne and Deepings meetings had been re-launched previously.

     

    The Leader of the Council clarified that the meetings had not taken place yet but were to begin within the next couple of months.

35.

Gravitas Housing Ltd - verbal update

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    A business update presented verbally with respect to Gravitas Housing Ltd.

    Minutes:

    Members were presented with a verbal update with respect of Gravitas Housing Ltd.

     

    Richard Wyles (Director of Gravitas Housing Ltd) informed the Committee that a further report would be brought to the next Companies Committee meeting in a written capacity so as to confirm an updated financial position.

     

    Members were informed that approximately £964,000 in total had been delivered to the Council as a result of the housing development through Gravitas Housing Ltd.  Of the 20 apartments and 5 townhouses, 19 apartments and 2 townhouses had been sold.   The Director continued that since the relaunch, interest in the apartments had accelerated and offers were made but had not been viable for the company to consider.

     

    The Director of Gravitas Housing Ltd informed the Committee that the private market would not have undertaken this scheme as profit margins were so narrow – a sub-5% return.  Further clarification was given that the Council had intervened to stimulate growth in the Bourne area which brought clear benefits to the area both financially and encouraging in-town living. 

    Members raised the following points:

     

    ·        The Committee had recognised that the financial overview was consistent with previous updates .

     

    ·                          Would Gravitas Housing Ltd carry on as a company?

     

    ·        Would Gravitas Housing Ltd have been required to post tax earnings for the year end?

     

    Richard Wyles (Director of Gravitas Housing Ltd) confirmed that there may be a requirement for the continuation of the company and Members would have the opportunity to consider this following the completion of all property sales and a project closure report.

     

    ACTION 1

    That a further update report from Gravitas Housing Ltd would be provided to the Committee at the next meeting.

     

36.

Environment SK Ltd - Appointment of Directors pdf icon PDF 229 KB

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    This report proposes the appointment of a new director and an up to one-year interim Non-Executive Director for Environment SK Ltd and Environment SK Commercial Services Ltd.

     

    Minutes:

    The Committee received a report of the appointment of Director arrangements for Environment SK Ltd and Environment SK Commercial Services Ltd.

     

    Ken Lyon, Assistant Chief Executive, was stepping down as director, following resignation to take up a new post and was to leave in March 2022.

     

    Councillor Robert Reid, Cabinet Member for Housing and Property was also stepping down as a director of Environment SK Ltd and Environment SK Commercial Services Ltd in order to focus on his Portfolio responsibilities including the Housing Revenue Account and General Fund grounds maintenance function.

     

    It was proposed that Alan Robinson, Deputy Chief Executive was appointed as a director of Environment SK Ltd and Environment SK Commercial Services Ltd. 

     

    It was also proposed that an interim Non-Executive Director be appointed for up to one year.  The appointment would support the review of Environment SK Ltd’s business plan and would inform the future direction of the company.

     

    It was confirmed to the Committee that the recommendation was to approve the appointment of Alan Robinson and approve in principle the appointment of an interim Non-Executive Director.

     

    The Committee raised the following points during discussion:

     

    ·       What was Alan Robinson’s role on the Board and what would he bring to the company?

     

    ·       What was the expected timescale of appointing an interim Non-Executive Director?

     

    ·       Was a conflict of interests considered to play a part in the decision for Councillor Reid to step down as a Director?

     

    ·       A Member raised a concern that the Cabinet Member for Finance may experience a similar conflict as he was responsible for Grounds Maintenance also.

     

    ·       Would the new interim Non-Executive Director be a Legal Officer of the company, therefore registered at Company House?

     

    The Deputy Leader of the Council confirmed to the Committee that Alan Robinson was a very experienced Local Government Officer and was to take on the role of HR for the company.

     

    The Chief Executive clarified that the interim Non-Executive Director process was to be the same as for when Leisure SK Ltd appointed a similar role – by application then selection for interview.

     

    Councillor Reid informed the Committee that he wished to put his position as Cabinet Member for Housing and Property first and could no longer carry out both roles alongside each other while the Grounds Maintenance Contract was undertaken.

     

    The Leader of the Council further clarified that the Council set the budget for Grounds Maintenance, not Councillor Adam Stokes as the Cabinet Member for Finance.

     

    Richard Wyles, as Director of Gravitas Housing Ltd informed the Committee that the interim Non-Executive Director would not be a Legal Officer and would impartially advise the Board of the company.

     

    A Member raised a concern that the Monitoring Officer considered no conflict of interests were recognised and requested that the legal advice on conflict of interests was to be shared with all Committee Members.

     

    ACTION 2

     

    That written confirmation of all current Directors of SK companies be circulated to Committee Members.

     

    ACTION 3

     

    That the Monitoring Officer share the legal advice  ...  view the full minutes text for item 36.

37.

Environment SK Ltd - Finance Update pdf icon PDF 258 KB

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    This report presents a financial update for the Council owned company Environment SK Ltd and includes the 2020/21 final accounts. 

     

    Additional documents:

    Minutes:

    The Committee received a report presented by the Deputy Leader of the Council on a financial update for Environment SK Ltd. 

     

    The Committee were informed the report set out a proposal to increase the budget for Grounds Maintenance for the approaching year due to a significant increase in cost pressures and operational challenges expected. 

     

    The Cabinet Member for Housing and Property confirmed that these challenges had effected the practicalities of delivering the service leading to a perceived drop in standard of service.

     

    A Member asked if the Directors of ESK had similar concerns.

     

    The Assistant Chief Executive confirmed that there had been problems within Environment SK Ltd around the recruitment and retention of staff but the company had been keen to address these issues.  It was clarified that the company had a positive relationship with the client.

     

    The Director of Commercial and Operational Services added that the company has been flexible and adaptable when responding to any issues, especially when deploying to waste collection from other areas during the height of the pandemic.

     

    Exclusion of Press and Public

     

    Members considered excluding the press and public, following a vote it was

    agreed unanimously.

     

    DECISION

    That under Section 100(a)(4) of the Local Government Act 1972, the

    press and public be excluded from the meeting on the grounds that if

    they were to be present, exempt information could be disclosed to them

    as defined in paragraph 3 of Schedule 12A of the Act.

     

    (The Committee moved back into public session at 15:20)

     

    Members were offered an opportunity to arrange a visit to Environment SK Ltd.

     

    A Member asked if other options around the scope of work for the company had been fully considered.

     

    The Director for Commercial and Operational Services informed that a review of the grounds maintenance specification was being undertaken.  There was a complex specification in place and it was only right that it was fully reviewed and updated so as to seek further improvement and value in the work undertaken.

     

    A Member asked if the company was still advertising for additional work.

     

    The Assistant Chief Executive confirmed that the company was consulting like-minded organisations such as Parish Councils.

     

    AGREED:

     

    That the Companies Committee noted the 2020/21 final accounts for EnvironmentSK Ltd.

     

     

    RECOMMENDATION:

    That Companies Committee is asked to recommend to Cabinet that the budget proposals for 2022/23 includes an additional £160,000 to the contract fee in respect of the Council’s grounds maintenance service.

     

    The recommendation of the report was proposed but not seconded.

     

    The Deputy Leader of the Council expressed his disappointment.

     

    The Chief Executive informed the Committee that if the recommendation was not approved, the company would struggle to bring forward the workforce to deliver the specification that was currently in place.  It was further confirmed that Environment SK Ltd would struggle to meet rising fuel costs for transport requirements.

     

    Upon further consideration, the recommendation of the report was proposed and seconded, following a vote it was NOT AGREED.

     

     

38.

Future Ways of Working for InvestSK Ltd pdf icon PDF 311 KB

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    To present options and recommendations to Cabinet, relating to efficiencies and financial considerations of insourcing InvestSK Limited.

    Additional documents:

    Minutes:

    Members were presented with a report that presented options and recommendations relating to efficiencies and financial considerations of insourcing InvestSK Ltd.

     

    The Cabinet Member for Corporate Governance and Licensing explained that InvestSK Ltd was established four years ago.  However, since the introduction of the Corporate Plan of 2020 and accounting for the Pandemic, the business model had changed.

     

    The report illustrated the advantages and disadvantages of the considerations and the review concluded that the current business model was not sustainable and had failed to make the best use of the skills sets within the business staffing structure.  Three potential options were detailed within the report.

     

    During debate, Members raised the following points:

     

    ·       Had staff been consulted on the potential impact to them?

     

    ·       What had been the added value of setting up InvestSK Ltd rather than keeping the services in-house?

     

    ·       Who is the Cabinet Member responsible for Economic Development?

     

    ·       The report noted some vacancies.  Are there any areas of service that aren’t being provided?

     

    The Director of Growth and Culture confirmed that the staff had been consulted on the potential impact of insourcing InvestSK Limited.

     

    The Leader of the Council, Councillor Kelham Cooke confirmed that he was the Cabinet Member responsible for the Economic Development Service and that InvestSK Ltd had created a successful economic development team, delivering over £50 million to local businesses.  He added that many business events had taken place, increasing positive engagement with businesses within the local area.  It was explained that lessons had been learnt with economic development being a higher priority and the Council sought to build a team with an excellent skills set to take the service forward.

     

    Exclusion of Press and Public

     

    Members considered excluding the press and public, following a vote it was

    agreed unanimously.

     

    DECISION

    That under Section 100(a)(4) of the Local Government Act 1972, the

    press and public be excluded from the meeting on the grounds that if

    they were to be present, exempt information could be disclosed to them

    as defined in paragraph 3 of Schedule 12A of the Act.

     

    (The Committee moved back into public session at 16:14)

     

    A Member raised concern that a debate was required as to how SK companies money was spent.  It was noted that accounts were available on the Company House website and closing accounts would be brought before the Companies Committee once they were available.

     

    The recommendations of the report were proposed and seconded, following a vote they were AGREED.

     

    DECISIONS:

     

    1.    That InvestSK Limited as a company is dissolved and the activity is transferred to the Council’s Growth and Culture Directorate for implementation at the earliest opportunity.

    2.    That the successful InvestSK brand is retained.

    3.    That the annual funding allocated to InvestSK Ltd is included in the Council’s Growth and Culture Directorate, and the remaining InvestSK Ltd financial reserve, is utilised to fund the additional pension costs that will be incurred by the Council.

    4.    That a communication plan for both external and internal announcements is developed by the  ...  view the full minutes text for item 38.

39.

LeisureSK Ltd Budgetary Outlook 2022/23 pdf icon PDF 240 KB

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    This report provides an update on the financial performance of LeisureSK Ltd for 2021/22 and provides early sight of the Business Plan to cover the period April 2022 to March 2023.

    Additional documents:

    Minutes:

    The Chairman confirmed to the Committee that the LeisureSK Business Plan was highly complex and detailed and was therefore to be heard at the next Companies Committee meeting in April.  The budgetary element only was to be heard today.

     

    This report, presented by Councillor Barry Dobson, provided an update on the financial performance of LeisureSK Ltd for 2021/22 following one year of trading, extended to 15 months to place it in line with the Council’s annual budgeting process.

     

    Councillor Dobson informed the Committee that trading conditions had been challenging due to extended lockdown periods during the pandemic and the restrictions on activities.  It was explained that LeisureSK Ltd had to adapt to the change in behaviour patterns of its customers.

     

    A Member queried why the recommendations had been brought before the Companies Committee when the item had been heard previously at the Joint Scrutiny meeting.

     

    The Assistant Director of Finance confirmed that proposals were heard at the Joint Scrutiny meeting but no decisions were made at that point.

     

    The recommendations of the report were proposed and seconded, following a vote they were AGREED.

     

    DECISIONS:

     

    1.    That Companies Committee noted the budgetary outlook for LeisureSK Ltd for the current financial year.

    2.    That Companies Committee supported the funding proposals for 2022/23.

    3.    That Companies Committee agreed to be more detailed analysis of the Business Plan for 2022/23 at the next meeting of Companies Committee scheduled for 26 April 2022.

40.

Work Programme 2021 - 2022 pdf icon PDF 90 KB

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    Minutes:

    On reviewing the Companies Committee work programme the following enquiry was made:

     

    A Member asked for clarification on when INvestSK Ltd’s financial accounts would be provided to members for consideration.

     

    The Committee was informed that the accounts would be brought to the next meeting after full completion.

41.

Any other business which the Chairman, by reasons of special circumstances, decides is urgent

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    Minutes:

    There were no other items of business.

42.

Close of Meeting

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    Minutes:

    The Chairman closed the meeting at 16:26.