Agenda item

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 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 Committee 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.

THEREFORE it was RESOLVED: That, in accordance with Part I of Schedule 12A to the Local Government Act 1972, the press and public be excluded from the meeting for item 6 for the reason set out below:

• Information under paragraph 3 (contains information relating to the financial or business affairs of any particular person including the authority holding that information).

The meeting then returned to open session

It was therefore RESOLVED that:

1.     Council recommends to Cabinet that neither of the business plans or business cases in their current form be supported.

2.     Council recommends to Cabinet that it should consider whether it should continue to fund the company and if so to what stage. It further recommends that independent legal and financial advice be sought to help inform those considerations and explore what options are available.

3.     That recommendations 1 and 2 be bought before an extraordinary Cabinet meeting no later than the 27 January 2023.

Note: *report previously circulated and attached to the minutes

The following recorded votes were taken during part 2 of the meeting:

Following the debate, Councillor B A Moore MOVED in accordance with Procedure Rule

19.4: that the vote in respect of recommendation 1 shall be by Roll Call. A roll call of

Members present at the meeting was then taken.

Those voting FOR RECOMMENDATION 1: Councillors G Barnell, J Bartlett, J Buczkowski, W Burke, J Cairney, SJ Clist, L Cruwys, N V Davey, J M Downes, Mrs S Griggs, B Holdman, F W Letch, S E Pugh, L D Taylor, B G J Warren, Mrs N Woollatt, J Wright

Those voting AGAINST RECOMMENDATION 1: Councillors R Evans, P J Heal, B A Moore, R F Radford

Those ABSTAINING from voting: Councillors Mrs C A Collis, Mrs C P Daw, C J Eginton, D J Knowles,

The AMENDMENT was declared to have CARRIED.

Those voting FOR RECOMMENDATION 2: Councillors G Barnell, J Bartlett, J Buczkowski, W Burke, J Cairney, SJ Clist, L Cruwys, J M Downes, Mrs S Griggs, B Holdman, F W Letch, S E Pugh, L D Taylor, B G J Warren, Mrs N Woollatt, J Wright

Those voting AGAINST RECOMMENDATION 2: Councillors R Evans, P J Heal, B A Moore, R F Radford

Those ABSTAINING from voting: Councillors Mrs C A Collis, N V Davey, Mrs C P Daw, C J Eginton, D J Knowles,

The AMENDMENT was declared to have CARRIED.