To consider a report of the Chief Executive providing Cabinet with a 5 year Business Plan.
The Cabinet had before it a * report of the Chief Executive providing Cabinet with a 5 year Business Plan.
The Cabinet Member for Housing and Property Services introduced the 2 new directors that had joined the company:
· Mr Bill Yardley – Non Executive Director
· Mr John Riley – Finance Director
and welcomed them to the meeting.
A Member posed a series of questions which were answered by the Deputy Chief Executive (151) at this point in the meeting:
With regard to interest received, the Deputy Chief Executive (S151) stated that all the interest was shown in the top part of the table, monies were earned and recharged and the money came from cash balances not the PWLB.
With regard to MDDC recharges – these amounts related to costs of MDDC officer time, office accommodation, IT support etc, and whether the council recharges the company at cost, the Deputy Chief Executive (s151) stated that the Councillor was correct, all amounts were recharged at cost, but that it was a financial benefit to the Council.
With regard to loans advanced - clarity was sought with regard to the loan figures and a statement by the Chief Executive which differed in amounts and whether the loans were properly secured– the Deputy Chief Executive (S151) stated that – this has nothing to do with working capital, the loan was £9,611,100 – the difference was the timing difference on the VAT on Knowle Lane and with regard to securing the loan – this was in hand at the present time.
Repaid – if the VAT refund was £550,000 would this not have allowed 3RDL to pay the Council back the single working capital loan it was using to fund its normal operations. The Deputy Chief Executive (S151) stated that the overall loan request for the Knowle Lane site initially included the £550k VAT charged on the land purchase. This sum was fully repaid by the company once they had recovered the VAT from HMRC.
How the working capital loan had been paid off? – the Deputy Chief Executive (S151) to provide this information. (Answer supplied - The working capital advance(s) are being recharged back to the company over a 4 year period which is based on the estimated breakeven timetable).
Why impairments had been considered a direct financial benefit to the Council – The Deputy Chief Executive (S151) stated the report did not state impairments were a financial benefit, but there was a financial benefit in the table – loans and impairments could be signified at the bottom of the table.
Discussion then took place with regard to:
· impairments and how they were reported
· the need for proper scrutiny of the business plan prior to a decision of the Cabinet
· The presentations made to the informal workshop for the Scrutiny and Audit Committees and the work that was taking place to include the Audit Committee in the risk aspect of the business
· Whether there should be more information within the business plan with ... view the full minutes text for item 307