Agenda item

Group Company Structure

(Interim Strategic Director) To consider the attached report.

Minutes:

The interim Strategic Director presented a report on the progress with the establishment of the proposed Group Company structure.

 

The interim Strategic Director reported that the Cabinet had recently agreed the proposed approach to the development of the Council-owned land in Epping and Waltham Abbey. Qualis Commercial would undertake these development projects directly, which would provide the Council with additional capital value and a long-term revenue source. It had also been identified that it would be beneficial for the Council to consider the sites in Epping as a package rather than individually, as this would enable greater flexibility in achieving commercially viable schemes.

 

The interim Strategic Director stated that a six-year business plan had been completed for the Qualis Management service company, setting out the strategy, implementation requirements, performance management and the phasing of the additional work required to create a successful management company. The Committee was reminded that the initial service to be provided through the management company was the existing repairs and maintenance service for the Council’s housing stock, but additional services could be included in the future if appropriate or beneficial.

 

Finally, the interim Strategic Director highlighted that the key governance documents to provide the framework for control of decision making, levels of authority and powers of delegation had been completed and would be submitted to the next meeting of the Cabinet for approval. It had been proposed that the composition of the Group company board should consist of Council Officer appointees, Council Members and independent non-executives. Members had been invited to attend a workshop on 3 February 2020 to hear a presentation from the Council’s legal advisors on the governance arrangements for the Group companies. The Chairman added that the Cabinet agenda had been published that afternoon.

 

Cllr S Murray commented that he, along with Cllr R Brookes, were accountable for the Council in his ward, and enquired what mechanism(s) had been put in place for the wider Council to influence the decisions made by the Group companies? The Chief Executive explained that the mechanism was the Shareholders Agreement, which listed every control, and this would be explained in more detail at the forthcoming Member workshop. The business cases for each company had been adopted and Qualis Management could operate within the scope of its business case, but anything outside of this scope had to be referred to the Council for a decision.

 

Cllr S Neville asked what measures were being implemented to keep the planning process at arm’s length from the management of Qualis? The Chief Executive agreed that this was an important point and it was relevant to discuss the disclosure of interests, especially pecuniary interests. The public perception point was also important, but the issue regarding the Council progressing development opportunities already existed. Senior Officers were already in discussions with Planning Officers about this issue, and advice had also been taken; this issue would also be covered in more detail at the forthcoming Member workshop. Cllr J Philip, as Planning Services Portfolio Holder, added that Qualis Commercial would deal with sites that were already in the Local Plan, and the usual constraints would apply in these circumstances - regardless of who the developer was. The process would be very transparent.

 

Cllr Wixley commented that the Housing Repairs staff were originally TUPE’ed to Mears, and asked if they would now be TUPE’ed to Qualis? The interim Strategic Director reminded the Committee that it was only the management of the Housing Repairs Service which was outsourced to Mears, everything else remained in the ownership / employ of the Council. Thus, all of the staff in the Repairs Service were Council staff and they would TUPE’ed to Qualis, but would remain in the Local Government Pension Scheme. Qualis would have its own management, but the new company would have further opportunities to invest in the service, which could bring significant benefits – including the possibility to perform additional private sector work in the future.

 

Referring to the earlier point concerning the declaration of interests at Planning Committee meetings, Cllr Y Knight reminded the Committee about the public perception of a pecuniary interest and that even a perceived pecuniary interest could also be subject to an investigation. The Councillor felt that this issue should be taken seriously and Members and Officers should be treated equally across the board. The Chief Executive concurred with Cllr Knight’s comments.

 

            Resolved:

 

(1)        That the progress with the activities undertaken to date to establish a Group of companies wholly owned by the Council be noted.

Supporting documents: