Agenda item

Reporting Person: Councillor D Hughes

8.         Woking Football Club & Associated Developments Task Group Report OSC20-011

9.         Chief Executive Comments on Woking Football Club Task Group Report OSC20-011A

[NOTE:  Following a reference made during the debate to Harrington Place, a project completed by Thameswey, the Chief Executive, Ray Morgan, declared a disclosable personal interest (non-pecuniary) in any items concerning Thameswey companies of which he was a Council-appointed director.  The interest was such that he could advise the Council on those items.]

The Chairman introduced the report of the Woking Football Club & Associated Developments Task Group, and it was agreed that Agenda Item 9 – Chief Executive Comments on the Report – would be taken at the same time.

The background to the Task Group’s report was summarised, including the objectives of the Task Group.  The Chairman emphasised that the Task Group had not been established to scrutinise the Football Club or the development proposals, nor to criticise Council Officers or to influence the planning application.  The objective had been to ensure due processes had been followed during the Council’s consideration of the proposed development and to provide assurance to residents.

The Task Group had concluded that there were examples of weakness in due process and had produced 16 recommendations to Council to ensure better practices were adopted for future consideration of major developments.  The Officers and Members were thanked for their hard work in supporting the work of the Task Group.

It was noted that recommendation (xv) had been withdrawn in light of the advice received by the Council through leading Counsel’s opinion, the details of which had been circulated to all Councillors on 10 March 2020, and was set out in appendix 1 to the report by the Chief Executive.  Leading Counsel had advised that neither deferral on the basis of a further Site Allocations DPD consultation nor refusal on prematurity grounds could be justified.

The Members discussed the recommendations and expressed concern over the conclusions of the Task Group that there had been a lack of due diligence and transparency.  Whilst Members acknowledged the complex nature of such commercial transaction, it was felt that some information had been kept out of the public domain.  Members emphasised their frustration that some meetings held during the development of proposals had not been minuted or documented.

The Chairman questioned the distribution date of Leading Counsel’s opinion, which appeared to have been circulated before the final version of the Task Group’s report.  The Chief Executive informed the Committee that the advice had been sought for the Members of both the Planning Committee and the Task Group, and had been circulated in the wider context to all Members.

The Chief Executive introduced his report which recommended that the Council’s Internal Auditor should be requested to undertake a review of the Governance arrangements for the developments, with the Auditor’s report to be considered by the Standards and Audit Committee.  The Overview and Scrutiny Committee would then be able to consider the Task Group’s report at a future meeting with the benefit of the Audit Report and the views of the Standard and Audit Committee.

The Chief Executive expressed his concern that Members were not content that the correct processes had been carried through, as two of the key officers had been Statutory Officers of the Council and had acted in the Council’s best interest.  The report requested that the recommendations were not taken to Council and that an independent review should be conducted.  The Chief Executive added that resources had been provided to the Task Group and was not aware that the Committee had requested a budget which had been refused.

The Chief Executive acknowledged that the Members of the Task Group had clearly set out their discomfort over the Council’s governance measures in the dealings around the Woking Football Club development.  His report therefore recommended that the Council should commission an independent audit review.

Some members felt confused by the suggestion that the recommendations of the Task Group should go to the Standards and Audit Committee as opposed to Full Council.  Members also felt that Council should have the opportunity to agree which independent body would conduct the review, questioning the independence of the Internal Auditors for the Council.

It was explained that the report had been delayed as a result of the COVID-19 outbreak and the subsequent cancellation of Committee meetings in March, April and May.  The Chief Executive explained that the internal audit of the Council was undertaken by an external firm which was accordingly referred to as the Council’s Internal Auditor. If the Committee sought as it suggested a law firm, it would similarly be referred to as the Council’s law firm.  The term should not be used to imply that the Company would not be impartial.

The Chief Executive reminded the Committee that further information would need to be gathered as to how Members envisioned pursuing the recommendations, some of which could affect future opportunities for the Council.  It was also explained that his recommendations were to be read together, starting with the report being noted for now, followed by the independent review, and further consideration of the points raised by the Task Group’s report.

The Chairman emphasised that the Task Group’s recommendations had been drawn up to help support officers in their roles, and were not aimed at individuals. The Chairman summarised the key points of the proposals and moved to the vote on the recommendations within the report of the Task Group.  It was noted that Councillor Raja was no longer present in the meeting. 

In accordance with Standing Orders, the names of Members voting for and against were recorded.

In favour:                           Councillors J Bond, G Chrystie, D Hughes, J Sanderson and M Whitehand.

Total in favour:                  5

Against:                             Councillor R Mohammed.

Total against:                     1

Present not voting:            S Hussain and C Rana.

Total present not voting:   2

The recommendations were therefore carried by 5 votes in favour to 1 vote against.

The Chairman then moved to the vote on the recommendations within the report of the Chief Executive and in accordance with Standing Orders, the names of Members voting for and against were recorded.

In favour:                           Councillors S Hussain, R Mohammed and C Rana.

Total in favour:                  3

Against:                             Councillors J Bond, G Chrystie, D Hughes, J Sanderson and M Whitehand.

Total against:                     5

Present not voting:            None.

Total present not voting:   0

The recommendations were therefore lost by 3 votes in favour to 5 votes against.

RECOMMENDED to Council

That  (i)      WBC in its future business dealings maintains minutes and notes of all meetings in which development contracts and finance are discussed and decisions made.

(ii)     Decisions regarding disclosure of Part II items should be more transparent and under regular review.

(iii)    Officers not agree confidentiality clauses which prohibit the Council from public disclosure following the signing of contracts.

(iv)    Definition of what constitutes ’material’ changes to be clarified. This would support Officers when using their delegated authority, and not open the Council to any challenge of changes which may be of a material standing.

Clarity over some Officer roles

(v)     That Officers who hold various positions by virtue of their employment in the Council and its companies, are released from some actions in which they act in these multiple roles, especially where there are also personal declarations of interest and associated directorships. It is recommended this be referred to the Standards and Audit committee. Their consideration for a protocol by which Officers, by virtue of their appointment, can be guided on what is appropriate would be helpful. This would ensure that Officers are not put in positions where there can be a challenge of a conflict of interest.

Business Cases

(vi)    For all significant and complex developments or investments a business case should be submitted to Council at the out-set, to provide the context, the justification of the case for change and promote discussion on available options.

(vii)   Members should be more careful in accepting information without reasonable evidence, and unsubstantiated statements should be more rigorously tested prior to agreement of Council (Officer) recommendations.

(viii)  Elements of the future sustainability and self-sufficiency of WFC should be more fully tested for clarity and accuracy. As the prime rational for the development is that of ensuring the on-going sustainability of the club. It would be prudent to ensure that this is achievable in all the various and on-going iterations of the proposals. Any changes of proposals should be brought back to the Council for consideration.

Due diligence

(ix)    In all projects the process of due diligence needs to be as full and broad as possible and not limited to the narrow scope of a Special Purpose Vehicle (SPV). WBC must adopt a similar comprehensive due diligence perspective as that of a lending bank.

(x)     A rigorous risk assessment is required on the whole scope of this development to protect the Council. The project risks and those associated with the loan facility should be regularly reviewed.

(xi)    Risk assessments should be undertaken for all future developments and investments.

Council as landowner and also Planning Authority

(xii)   In developments where WBC has dual roles and interests these need to be transparent, and any conflicts clearly identified.

(xiii)  Consideration of Core Strategies and the Site Allocations DPD should be clearly distinct from any undue influence by an impending development.

(xiv)  Council purchase price of property and land should always be supported by at least one and preferably two valuations and survey reports.

Further independent scrutiny review     

(xv)   Given the scale and gravity of findings within this report a further independent and fully resourced investigation into the processes behind this development should be commissioned.

RESOLVED

That the recommendations set out in Agenda Item 9 – Chief Executives Comments on Woking Football Club Task Group Report be not supported.