Agenda item

     Report by Executive Director Terence Herbert.

Cllr Philip Whitehead, Leader of the Council, presented a report seeking consideration of the detailed arrangements to establish three companies owned by Wiltshire Council.

The Leader summarised the structure and governance arrangements associated with the three companies, which included the Council being the sole shareholder for each of the companies, the council retaining strategic control functions over the company’s activities through its role as shareholder, business plans being monitored by Cabinet, the appointment of Directors and the company’s purchasing services from the Council under separate resourcing contracts.

The Leader indicated that the Cabinet at its meeting on 15 January 2019 had initially nominated him as one of the company Directors. However, since that time Cllr Whitehead had been elected as Leader of the Council and was therefore excluded from becoming a Director.  He reported that Cllr Bridget Wayman, Cabinet member for Highways, Transport and Waste, was now nominated as his replacement to become a Director.  

In response to a question from Cllr Pauline Church about how transparency is assured for the three new companies, the Director of Housing and Commercial Development referred to the shareholders agreement and the monitoring of the company’s Business Plan by Cabinet. 

In response to an additional question from Cllr Alan Hill about the involvement of Scrutiny in the overall process, the Leader of the Council welcomed this proposal.

The Cabinet noted that the Financial Planning Task Group considered the report at its meeting held on 22 July 2019.  The Task Group raised a query about the proposed level of remuneration for Independent Directors was sufficient to attract those with the required skills and expertise. They also welcomed the overall direction of travel and congratulated those involved on the amount of work undertaken.

Resolved:

1.    To agree to the shareholder agreements as set out at appendix A of the report.

2.    To agree to the articles of association of the companies as set out at appendix B of the report.

3.    To agree to the business plan for the companies as set out at Appendix C of the report at minute 114

4.    To agree to appoint Hazlewoods LLP as auditors of the companies for the financial year 2019/20.

5.    To agree loan finance of £ 9.550m in 2019/20 to Stone Circle housing company on terms set out at appendix D of the report.

6.      To agree a virement of £7.3 million from Commercial Investment approved 2019/20 budget to Local Development Company to create a total budget of £12.3 million. To re-profile the revised budget to show £0.8 million in 2019/20, £11.1 million in 2020/21 and £0.4 million in 2021/22 so that it is in line with the Local Development Company Business Plan.

7.    To agree loan finance of £ 0.670m in 2019/20 to Stone Circle development company on terms set out in appendix D of the report.

8.    To agree to the transfer of New Zealand Avenue, Ashton Street resource centre and Marlborough resource centre sites subject to Stone Circle development company providing a project plan as required in the shareholder agreement.

9.    To agree to the equity investment required for each development to achieve at least 40% equity based on the value of the sites and cash equity investment in line with the agreed business plan assumptions.

10.To agree that subject to provision of project plan the terms of transfer of sites and cash equity investment will be delegated to an Executive Director other than the Executive Director of Growth Investment and Place, the Director of Finance and Procurement in consultation with the Cabinet member for Finance, Procurement and Economic Development.

11.To agree an annual £ 2,000 remuneration for Directors who are independent of the Council or where a Special responsibility allowance is paid to Councillors that does not cover their role on the companies.

12.To agree that Director’s expenses can be reimbursed in line with the Council’s expenses policy.

13.To agree to delegate the appointment of independent board Directors and Council Director nominees to an Executive Director other than the Executive Director of Growth, Investment and Place in consultation with the Leader of the Council

14.To agree to enter into a nomination agreement with Stone circle housing company.

15.To agree to provide the following services to the Stone Circle housing company; housing management, accountancy, company secretary, conveyancing, property procurement and valuation services and delegate authority to enter into the resources contracts to Director of Housing and commercial development.

16.To agree to provide the following services to the Stone Circle development company; development management services, company secretary, accountancy and delegate authority to enter into the resources contracts to Director of Housing and Commercial Development

17.To agree that authority to finalise detail of documentation and to enter into agreements is delegated to the Director of Housing and Commercial Development in consultation with Director of legal, electoral and registration services and Director of Finance and procurement.

18.To note that Cllr Bridget Wayman, Cabinet member for Highways, Transport and Waste, be nominated as the replacement for Cllr Philip Whitehead, Leader of the Council and Cabinet member for Finance, Procurement and Economic Development, as a Director to the boards of both companies.  

Reason for Decision:

The proposals aim at implementing the decision taken by cabinet in January 2019 to establish a local housing company to meet housing needs in the County as well as a development company to develop council owned sites to maximise the value of Council assets.

(Note: Cllr Richard Clewer, Cllr Ian Thorn and Alistair Cunningham, Executive Director, took no part in the discussion on this matter and left the meeting room during its consideration).