Agenda and minutes
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Media
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Apologies for absence
Additional documents: Minutes: Apologies for absence were received from Councillor Crawford who was substituted by Councillor Johnson and Councillor Knowles who was substituted by Councillor Bisnauthsing.
The AllianceSK vacancy on the Committee for this meeting was taken by Councillor Baxter.
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Disclosure of interests
Members are asked to disclose any interests in matters for consideration at the meeting Additional documents: Minutes: None disclosed. |
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Minutes of the meeting held on 7 October 2022
Additional documents: Minutes: The minutes of the meeting held on 7 October 2022 were proposed, seconded and AGREED. |
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Updates from the previous meeting
To consider updates on Actions agreed at the previous meeting. Additional documents: Minutes: The update requested at the previous meeting of the Committee in respect of InvestSK Ltd would be dealt with at agenda item 5. |
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InvestSK Ltd - Presentation of Accounts 2021/2022
The purpose of this report to Companies Committee is twofold, to:
(a) Present the audited accounts for InvestSK Limited up to March 2022
(b) Provide an overview of the successes, lessons learned, total spend and return on investment ahead of the dissolution of the Company.
Additional documents: Minutes: The Leader of the Council and Chairman of InvestSK Limited presented the report which dealt with the final audited accounts of InvestSK Limited for the fiscal year 2021/2022. The Audit Finding report and additional details requested by elected Members at the previous meeting of the Committee were appended or contained within the report.
The accounts for InvestSK Limited for the financial year 2021/2022 were publicly available under the InvestSK Limited Companies House registration (11413907). The accounts had been audited externally by Duncan and Toplis. The financial statements gave a true and fair view of the state of the company’s affairs as at 31 March 2022. They had been prepared in accordance with United Kingdom Generally Accepted Accounting Practices and in accordance with the requirements of the Companies Act 2006.
Successes and achievements of the company had been well documented with external funding of £11.77m being secured during the period September 2018 to March 2022. This demonstrated a return on investment in external funding of £3.77 leveraged for every £1 spent.
A summary of lessons learnt had been asked for at the last meeting of the Committee and these were found at 1.12 of the report. Members were asked to endorse the recommendation that the audited accounts were a true and accurate record of the expenditure incurred by InvestSK Ltd during the final operational year 2021/22. Tribute was made to the staff and officers of InvestSK Ltd for the work they had done and it was hoped that they would continue to secure investment as part of the Economic Development Team.
The content of the report was praised by Members, specifically the lessons learnt and it was stated that the reasons given suggested that there were inherent disadvantages to setting up an arm’s length company. Going forward there had to be overwhelming evidence to support this route in the future. Reference was made to the University Centre funding figure shown and an update requested and also whether the funding could have been secured by the Council rather than the arm’s length company and whether that would be a problem now that InvestSK was in house.
The Leader of the Council and Chairman of InvestSK Limited thanked the Member for the comments made and stated that an honest discussion of the lessons learnt was necessary. It was acknowledged that some of the processes had caused Member’s anxiety or frustration in the way that the company had worked. When the company had been set up there had been opportunities in respect of economic regeneration which neighbouring authorities had also seen.
In respect of the University Centre there were on-going discussions with the Enterprise Partnership and a revision in terms of the repayment of the grant. Most funding now came from central Government and the in house Economic Development team would continue to bid and secure funding for the area.
Further discussion on the content of the report and the original set up of the company followed with one Member expressing his views ... view the full minutes text for item 74. |
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To present to Companies Committee the draft financial accounts for LeisureSK Ltd up to 31 March 2022 and request consideration of the level of management fee being sought by LeisureSK Ltd from the Council for financial year 2023/2024.
Additional documents: Minutes: The Chairman reminded the Committee that if they wished to discuss the exempt papers attached to the report then the meeting would have to go into private session.
At the October meeting of the Committee, Members were presented with the accounts for LeisureSK Ltd to March 2021. The report before Members dealt with the draft financial accounts for LeisureSK Ltd up to 31 March 2022 and a request for the Committee to consider a management fee of up to £500,000 for the financial year 2023/24 from the Council.
The report detailed the areas that LeisureSK Ltd were currently reviewing and this included the condition surveys as outlined within paragraphs 1.8 to 1.13 of the report and included guidance on the remedial work categorised into four groups:
· Works required which pose a health and safety risk or where items were at end of life · Works to resolve operational and building issues · Works which are affecting the income potential of LeisureSK Ltd, and therefore increasing the Council’s subsidy · Works which if undertaken now, would limit further costs in the future
Paragraph 1.13 of the report detailed the works required and paragraph 1.14 detailed the works to support the request for the management fee for 2023/24. Budget pressures included the two significant areas of expenditure for LeisureSK Ltd which were staffing and utility costs. Reassurance was given that the Board of Directors were committed to exploring a range of opportunities to help mitigate the rising costs in respect of staffing and utilities. The Committee were asked to agree the recommendations contained within the report.
One Member asked why a business plan was not included. The Assistant Director of Leisure and Culture replied that the business plan was agreed annually and the business plan for 2023/24 would come to the Committee in January 2023. Reference was made to the previous business plan which had contained Deepings Leisure Centre. Following the decision that had been made at the recent Council meeting, it was felt that the current business plan was redundant and LeisureSK Ltd was not delivering what it had said it would. It was also asked whether the Leader and Deputy Leader had resigned from the Board of Directors, because they no longer had confidence in the company.
The Leader stated that Members needed to be clear about the difference between LeisureSK Ltd and the Council. LeisureSK Ltd delivered the leisure services that the Council provided. The Council had made a decision to no longer proceed with the refurbishment of the Deepings Leisure Centre. Following legal advice, the Leader and the Deputy Leader had resigned from the Board of Directors for LeisureSK Ltd, so that there was no conflict of interest in the decision made by Council at its meeting on 24 November 2022. Further discussion followed in respect of the decision taken at Council, the resignation of two Directors and the current business plan for LeisureSK Ltd. It was requested that an updated business plan for LeisureSK Ltd be added to the agenda ... view the full minutes text for item 75. |
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Gravitas Housing Ltd Project Update Report
This report provides an update with respect to the Wherry’s Lane Bourne development project.
Additional documents: Minutes: Members received a report from Gravitas Housing Ltd which provided a progress position in respect of the Wherry’s Lane, Bourne development.
Before the report was presented one Member asked about why the report was not in the name of a Cabinet Member as with all the other reports received. It was noted that the report was from the Directors of Gravitas Housing Ltd not a Cabinet Member.
In presenting the report it was noted that that it could be the last report to the Committee, if the Committee recommended that the Company be dissolved. A brief background history of Gravitas Housing Ltd was given. The company was the first arm’s length company of the Council and had been established in 2016 prior to the Companies Committee being formed.
Only one scheme had been identified and was known as the Wherry’s Lane, Bourne Development. It was adjacent to an existing development being undertaken under economic regeneration activity creating shops with living space above.
The project was funded between the Council and the Company through an equity investment and loan structure. Funding had been agreed in March 2017 and no additional funding had been agreed since that date. Discussion on whether to progress the scheme had taken place and in 2019 it was agreed to proceed with the scheme using the original funding structure.
Twenty-five housing units had been completed, 20 apartments and five town houses. The units had been marketed right at the start of the Covid pandemic in March 2020. Elements to the scheme included affordable housing which had been met through a significant 106 Agreement and also four help to buy properties which had an 80% of market price discounted price for first time buyers.
The Committee had received previous reports on the progression of sales. Due to the pandemic and the volatility of the market, the sale of the units had been protracted which had resulted in increased costs including empty property council tax fees, standing service charges and marketing expenditure.
Indirect benefits to the Council had included the £173,000 interest charged on the loan to the Council and the New Homes Bonus in place during the creation of the units which had credited £188,000 to the Council.
The total return on the investment was £672,000, however, expenses had significantly increased due to the duration of the project which had exceeded the original project timetable due to the pandemic and the unstable housing market which had resulted in a loss. Reference within the report to Appendix B referred to the Meadow Lane, Bourne Housing Revenue Account (HRA) new build which had been previously to Committee.
The recommendation before the Committee was to note the update on the Wherry’s Lane Bourne Development and to recommend to Cabinet that Gravitas Housing Ltd was dissolved upon the completion and auditing of the profit and loss account.
It was noted that the expected profit margin for the development had only ever been very small at 5% which, due to unforeseen costs and ... view the full minutes text for item 76. |
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Work Programme 2022 - 2023
To consider the Committee’s Work Programme for 2022 – 2023. Additional documents: Minutes: The Chairman confirmed that the following items would be added to the Work Programme:
· LeisureSK Ltd report appointing Board Directors – January 2023 · LeisureSK Ltd report on an updated Business Plan – January 2023 · Gravitas Housing Ltd report on the final accounts – March/April 2023 |
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Any other business which the Chairman, by reasons of special circumstances, decides is urgent
Additional documents: Minutes: None. |
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Close of meeting
Additional documents: Minutes: The meeting closed at 11:50am. |