Agenda and minutes

To receive any apologies for absence.

Apologies were received from Councillors: R Deed, Miss J Norton, S J Penny, A Wilce and A Wyer.

To receive any questions relating to items on the agenda from members of the public and replies thereto.

A Question was received and read out by the Chairman from Roger Davey:

In April of last year the overspend on the Riverside development of the unsightly blocks of flats and houses which disfigure the riverside, was quoted as just over three quarters of a million pounds.  Given that in September last year the council gave 3 Rivers a further 2.2 million to keep it afloat my questions are :-

No.1

Given the continuing haemorrhage of public funds to 3 Rivers, how many more millions of pounds of council tax payer’s money does the council intend to plough into 3 Rivers?

No.2 Given that it is obvious that the council and some of its officers are incapable of controlling the expenditure on 3 Rivers will the council bring in some forensic accountants or other external body to examine all of the accounts , contracts  and any  other documents associated with this company.

No.3

Of especial concern must be the way in which the original multi million pound contract for the Riverside site was awarded to EBC (who later pulled out) after a cosy chat, without going out to tender. This is a flagrant breach of the public procurement regulations which 3 Rivers are bound by as a company owned by the council. These regulations insist on at least 3 companies being invited to tender. Even if the councils usual contractors do not wish to tender there are many national firms who I am sure would have tendered had they been asked. Instead the contract was awarded "on a design and build contract 2016 following negotiations with a contractor".  This is the response from my freedom of information request to 3 Rivers in 2019. This alone especially as a councillor and a council officer were directors of 3 Rivers at the time, is I believe another breach of the regulations and surely warrants further investigation by an external body. Why was the contract awarded in this way ?

No.4

Given 3 Rivers record thus far how can the council be sure that the costs for the Bampton and Park road developments are realistic and will not lead to the council taxpayers being saddled with yet more debt?

No.5

Given that this meeting is closed to the people who pay, if and when will the council release all of the information regarding 3 Rivers and the ongoing Riverside site fiasco?

The Chairman thanked Mr Davey for their questions and noted that answers would be submitted in writing. 

A Question was received from Paul Elstone:

Question 1

There is an increasing level of public concern over the financial arrangement between the Council and 3 Rivers, including the HIGH debt levels and the impairment of loans. These concerns are borne out by the demonstration outside of Phoenix House this evening and recent press articles, Once more, a meeting about 3 Rivers will be held in secret. For transparency, can the voting tonight be conducted in public with individual votes recorded?

Question 2  ...  view the full minutes text for item 118.

To record any interests on agenda matters.

Cllr R L Stanley declared a Disclosable Pecuniary Interest in that he was a Director of the 3 Rivers Development Company Ltd. And from this it was inferred that should any discussion ensue he would need to leave the meeting.

Cllr Mrs S Griggs declared a non-pecuniary interest in that she worked for Seddons Estate Agents.

To receive any announcements which the Chairman of the Council may wish to make.

There were none.

Discussion with regard to the next items, may require the Council to pass the following resolution to exclude the press and public having reflected on Article 12 12.02(d) (a presumption in favour of openness) of the Constitution. This decision may be required because consideration of this matter in public may disclose information falling within one of the descriptions of exempt information in Schedule 12A to the Local Government Act 1972. The Council would need to decide whether, in all the circumstances of the case, the public interest in maintaining the exemption, outweighs the public interest in disclosing the information.

Recommended 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)

The following was discussed:

-       It was raised that item 6 should be discussed in public.

-       The validity of the agenda.

-       There was confusion whether Council were to advise or make a decision.

-       That the Part 1 elements of agenda item 6 should be discussed in public.

The District Solicitor and Monitoring Officer confirmed that the decision making responsibility for 3 Rivers Developments Ltd rested with Cabinet and could not be vested elsewhere. The Council could not agree or disagree the business plans and cases presented, however, the Council could make its views known to the Cabinet by formal recommendation or could request that Cabinet notes the discussion of Council.

In addition, the District Solicitor and Monitoring Officer explained that the agenda had not changed, the recommendation had been clarified and that Council were to advise Cabinet as opposed to making a decision.

Councillor B Holdman MOVED an AMENDMENT, seconded by Councillor J M Downes that:

The Council stay in part1 for the debate and for the vote and to also request a recorded vote in part 1.

It was mentioned that:

-       It was important for this to be discussed in an open forum and to go into part 2 when appropriate. 

The AMENDMENT was declared to have FAILED.

The Chairman PROPOSED that the meeting go into part 2.

Upon a vote being taken, the proposal was declared to have FAILED.

The Chairman explained that the Council would remain in part 1 until it was necessary to move into part 2 for item 6.

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

1. That Cabinet follow the recommendation from Scrutiny that the 3 Rivers Developments Ltd 5 year business plan 2023 – 2028 be referred to an extraordinary meeting of Full Council for a decision.

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

The Council 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 business cases 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 recent Business Plan.

The following was discussed:

-        Clarification over the impairment figure was sought, to which the Deputy Chief Executive (S151) explained that the figure had been provided by the finance team and had been audited by Grant Thornton. In addition, Grant Thornton were reviewing the 2021/22 accounts and were happy with what had been applied.

-        It was asked where the £1.6m figure came from and what it referred to. The Deputy Chief Executive (S151) explained that it referred to an estimate from the property development company of the likely potential loss on the ST George’s Court development.

-        Clarification was sought over where funds were coming from to fund 3 Rivers Developments Ltd. The Deputy Chief Executive (S151) explained that it was a treasury investment decision, not an expenditure decision. It would be funded by temporary treasury holdings. The Council had decided that greater returns could be made if invested in a third party property development company.

-        The report stated there had been no costs for borrowing, but it was asked if there would be future borrowing costs. The Deputy Chief Executive (S151) explained that all lending had been from temporary treasury deposits. There may be a need to borrow from the Public Works Loan Board (PWLB), but if this were to be the case there would still be an interest surplus margin.

-        In relation to risk, it was asked when the level of risk would become unacceptable. The Deputy Chief Executive (S151) explained that it would be down to the Council to decide following advice from officers. It was clarified that the overarching financial strategy was decided by Full Council. 

-        It was asked if the Council had made better returns when compared to original investments. The Deputy Chief Executive (S151) explained that within the table under 3.6 it could be assumed with a 13% return with an estimated impairment that there had been a projected loss of £1.6m there was a profit position at the moment. It was less than anticipated and was skewed by one project, while all other projects were successful.

-        It was challenged that interest had been generated and that this was not profit.

-        The performance of the business was challenged.

Councillor Mrs N Woollatt MOVED that the meeting should be moved into part 2 and that standing orders be suspended. This was seconded by Councillor B G J Warren.

Upon a vote being taken, the MOTION was declared to have CARRIED.

The Chairman indicated that discussion with regard to the next item, may require the Council to pass the following resolution to exclude the press and public having reflected  ...  view the full minutes text for item 122.