Issue - meetings

Following a report of the Deputy Chief Executive (S151), the Scrutiny Committee made the following recommendations:

1.    That the Cabinet refer the matter to full Council

The Audit Committee made the following recommendations:

1.    That the Audit Committee recommend to the Cabinet that more detail of the risks and various options going forward be sought from the S151 Officer.

2.    That the other options be included in the business plan and consequences of not supporting it need to be highlighted.

3.    That the Audit Committee feeds back to Cabinet that it recommends that the business plan in its current form is not supported due to the level of risk to the Council from the likelihood of needing to impair loans on those projects with very narrow rates of return.

The Cabinet received a *report from the Deputy Chief Executive which asked Members to review the business plan of 3 Rivers Developments Ltd.  As well as 2 reports from items 12 and 13  which provided Cabinet with  a business case for a second development scheme at Bampton and a business case for a 6 unit residential development scheme in Tiverton which were included in the 3 River’s Developments Ltd company’s recent Business Plan.

The meeting returned to open session.

It was therefore RESOLVED that

1. The 3 Rivers Developments Ltd 5 year business plan 2023 – 2028 be referred to an extraordinary meeting of Full Council for a decision.

2. The paper regarding 3 Rivers Developments Ltd Project Plan for the Park Road Development to an Extraordinary Meeting of Full Council for a decision.

3. The paper regarding 3 Rivers Developments ltd Project Plan for the Bampton 2 Development to an extraordinary meeting of Full Council for a decision.

(Proposed by Cllr R Deed and seconded by Cllr C Eginton)

Reason for Decision: Cabinet agreed with the Scrutiny Committee’s recommendation. But Scrutiny did not recommend that the developments in Bampton and Park road be referred to Council?

To receive the 3 Rivers Development Business Plan

The Group had before it and NOTED, a report from the Deputy Chief Executive providing the 3 Rivers Development Ltd – Business Plan 2023 -2028.

In response to questions asked the Deputy Chief Executive (S151) responded:

• When the company was established it was likely to be funded by a mixture of internal borrowings from surplus cash flow holdings and therefore there was no cost. No medium or long term borrowing had occurred. 
• Various officer were recharged into the company in its inception, officers had fully moved to the company, therefore the company costs had increased and the recharge decreased. 
• More could be done to highlight the Council’s risk and this would be made clearer in the Cabinet report due for January’s Cabinet meeting.
• This should be considered as an investment, there had been £2.2m direct benefit to the Council, with £790,000 worth of transactions that had been impaired.
• The table shown at 2.4 was the revenue transactions of the authority, dividends would be received by the Council once the company becomes profitable.
• Would not conduct medium to long term borrowing on projects that had a lifespan of 1 to 2 years.  Would be financial advantageous for temporary cash flows. There was a total loan envelope of £17.3m and that gross value would not exceed £20.9m.

RESOLVED: that under Section 100A(4) of the Local Government Act 1972 the public be excluded from the next item of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 3 respectively of Part 1 of Schedule 12A of the Act, namely information relating to the financial or business affairs of any particular person (including the authority holding that information) (Proposed by the Chairman) Members then reviewed the 3 Rivers Developments Business Plan 2023-2028.

On returning to open session the Chairman confirmed that the following recommendations had been made:

1. That the Audit Committee recommend to the Cabinet that more detail of the risks and various options going forward be sought from the S151 Officer.

2. That the other options be included in the business plan and consequences of not supporting it need to be highlighted.

3. That the Audit Committee feeds back to Cabinet that it recommends that the business plan in its current form is not supported due to the level of risk to the Council from the likelihood of needing to impair loans on those projects with very narrow rates of return.

To receive the 3 Rivers Developments Business Plan

The Group had before it and NOTED, a *report from the Deputy Chief Executive providing the 3 Rivers Developments Ltd – Business Plan 2023 -2028.

In response to questions asked the Deputy Chief Executive (S151) responded:

·         The Company had been set up with a number of priorities including as an investment for the Council and to provide the delivery of social housing

·         The Company was funded through a mixture of PWLB borrowing and surplus funds and that the Business Plan in front of Members covered the period 2023-2028

·         The figures provided in the report had been audited and were correct

·         The risks associated with the Company had been explained in the Business Plan, however there was risk with any investment and that the Scrutiny Committee were able to make recommendations to the Cabinet if they felt that these had not been explained

RESOLVED that under Section 100A(4) of the Local Government Act 1972 the public be excluded from the next item of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 3 respectively of Part 1 of Schedule 12A of the Act, namely information relating to the financial or business affairs of any particular person (including the authority holding that information)

(Proposed by the Chairman)

Members then reviewed the 3 Rivers Developments Business Plan 2023-2028.

On returning to open session the Chairman confirmed that the following recommendations had been made:

1.    That the Audit Committee recommend to the Cabinet that more detail of the risks and various options going forward be sought from the S151 Officer

2.    That the Cabinet refer the matter to full Council

Note: *report previously circulated and attached to the minutes