Minutes:
The Members of the Council were presented with the recommendations of the Executive which sought to modernise the Council’s governance arrangements with respect to its oversight of its wholly or part owned companies. The recommendations had been drawn up following a review of the governance of the Council’s subsidiary companies as part of the medium term financial resilience assessment produced by the professional services firm EY.
The proposed arrangements, based on guidance prepared by the Chartered Institute of Public Finance and Accountancy(CIPFA), would improve openness and transparency, address conflict issues by removing Councillors from company boards, and formalise provision of Council services to group companies. The Leader would be appointed as the Council’s Shareholder Representative, and a Shareholder Advisory Group (SAG) with the Leader of the Council and members of the Executive would be established. There would be a key role for the Chairman of the Overview and Scrutiny Committee, who would be invited to attend meetings of the SAG.
The Council debated the proposals at length, with concern expressed over the democratic deficit that would result and suggestions that cross party representation should be included. Councillor Brown moved and Councillor Dorsett seconded an amendment which would see a new (ii) added to the recommendations as follows:
“(ii) openness and transparency are vital to this council and to ensure it is upheld in all matters related to our arms length companies.
The creation of the Shareholder Advisory Group be politically proportional, to ensure that its companies act in the interests of the Council as shareholder and contribute to the Councils objectives.”
Before the matter was debated, the Director of Legal and Democratic Services advised that the amendment would have significant implications on the wider proposals, including the Terms of Reference of the SAG and the role of the Overview and Scrutiny Committee. It was made clear that, should the Council support the amendment, further work would need to be undertaken to redraft the proposals before being brought back to the Council.
The Leader of the Council responded by making clear that the proposals were based on the Council’s Strong Leader arrangements and the Executive structure, with the scrutiny function provided through the Overview and Scrutiny Committee. It was reiterated that the model was based on best practice issued by CIPFA and that the amendment would require significant changes to the proposed governance model.
Following the debate on the amendment, the Mayor advised that, in accordance with Standing Order 10.8, a vote would be held and the names of Members voting for and against the amendment recorded.
In favour: Councillors A Azad, J Brown, K Davis, S Dorsett, G Elson, C Kemp, M I Raja and M Whitehand.
Total in favour: 8
Against: Councillors H Akberali, T Aziz, A-M Barker, A Caulfield, G Cosnahan, W Forster, P Graves, I Johnson, D Jordan, A Kirby, R Leach, L Lyons, L Morales, J Morley, S Oades, D Roberts and J Sanderson and T Spencer.
Total against: 18
Present not voting: The Mayor, Councillor S Hussain.
Total present not voting: 1
The amendment was therefore lost by 8 votes in favour to 18 votes against.
The Mayor directed the Members of the Council to the substantive recommendations following a closing statement by the Leader of the Council. In accordance with Standing Order 10.8, the names of Members voting for and against the recommendations were recorded.
In favour: Councillors H Akberali, T Aziz, A-M Barker, A Caulfield, G Cosnahan, W Forster, P Graves, I Johnson, D Jordan, A Kirby, R Leach, L Lyons, L Morales, J Morley, S Oades, M I Raja, D Roberts and J Sanderson and T Spencer.
Total in favour: 19
Against: Councillors A Azad, J Brown, K Davis, S Dorsett, G Elson, C Kemp and M Whitehand.
Total against: 7
Present not voting: The Mayor, Councillor S Hussain.
Total present not voting: 1
The recommendations were therefore carried by 19 votes in favour to 7 votes against.
RESOLVED
That (i) the Leader of the Council be appointed as the Council’s Shareholder Representative;
(ii) the creation of a Shareholder Advisory Group be approved, as detailed in the report, to ensure that its companies act in the interests of the Council as shareholder and contribute to the Council’s objectives;
(iii) the Terms of Reference of the Shareholder Advisory Group, as set out at Appendix 2 to the report, be approved;
(iv) Directors to the Group Companies, as outlined in Appendix 3 to the report, be appointed;
(v) the Shareholder Liaison Service be established to lead on managing contractual arrangements with the companies and in holding of the companies to account;
(vi) the establishment of Head of Shareholder Liaison Service at Grade W8 and Project Officer on Grade W5 be approved;
(vii) delegated authority be given to the Director of Legal and Democratic Services to approve final terms and enter any Service Level Agreements where corporate functions provide support services to group companies;
(viii) delegated authority be given to the Director of Legal and Democratic Services to approve final terms and enter any Data Protection or Information Sharing Agreement; and
(ix) the Constitution be updated accordingly.