Agenda item

A Decision made by the Cabinet on 31 January 2023 in respect of the following report was called in for consideration by Councillors B G J Warren, G Barnell,

Mrs C P Daw, R M Deed, R J Dolley, A Wilce and Mrs N Woollatt.

 

3 Rivers Developments Limited - Business Plan 2023-2028 and associated Business Cases

 

1.     Approve the new 3 River Developments Ltd business plan dated 27 January 2023.

2.     Approve the business case for Bampton 2, 5 levels.

3.     Approve case for Park Road and accept the revised increased unconditional offer made within the business plan dated 27 January 2023.

4.     Continues to fund 3 Rivers Developments Ltd in line with the business plan dated 27 January 2023 Which is proposed to generate £900k gross interest received in 2023/24 which are already included in the Council draft 2023/24 general fund budget.

5.     To continue with the due-diligence process agreed by Scrutiny, Audit Committee, Cabinet and Full Council that requires a detailed business case to be reviewed and approved by Cabinet for any development in excess of £1m.

6.     Instruct external financial and legal advice should a different scope or direction be considered.

 

The reason for the call in is:

1.     The Decision Notice is in Error.

2.     The decisions are outside of the Budget & Policy Framework.

3.     In relation to 2 above, decisions were not within the power of decision maker.

4.     There was inadequate consultation. 

5.     There was insufficient legal and financial consideration.

 

A Decision made by the Cabinet on 31 January 2023 in respect of the following report was called in for consideration by Councillors B G J Warren, G Barnell, Mrs C P Daw, R M Deed, R J Dolley, A Wilce and Mrs N Woollatt.

 

3 Rivers Developments Limited - Business Plan 2023-2028 and associated Business Cases

 

The Cabinet had RESOLVED to:

 

1.    Approve the new 3 River Developments Ltd business plan dated 27 January 2023.

2.    Approve the business case for Bampton 2, 5 levels.

3.    Approve case for Park Road and accept the revised increased unconditional offer made within the business plan dated 27 January 2023.

4.    Continues to fund 3 Rivers Developments Ltd in line with the business plan dated 27 January 2023 Which is proposed to generate £900k gross interest received in 2023/24 which are already included in the Council draft 2023/24 general fund budget.

5.    To continue with the due-diligence process agreed by Scrutiny, Audit Committee, Cabinet and Full Council that requires a detailed business case to be reviewed and approved by Cabinet for any development in excess of £1m.

6.    Instruct external financial and legal advice should a different scope or direction be considered.

 

The reason for the call in was:

1.    The Decision Notice is in Error.

2.    The decisions are outside of the Budget & Policy Framework.

3.    In relation to 2 above, decisions were not within the power of decision maker.

4.    There was inadequate consultation. 

5.    There was insufficient legal and financial consideration.

 

The Monitoring Officer provided her opinion on the reasons given for the call in:

 

·         Reason number 1 - She listed the path this issue had taken through the Scrutiny Committee, the Audit Committee, the Cabinet and Full Council. This included a number of extraordinary meetings.  Also, that Cabinet had referred the matter to Extraordinary Full Council at the request of the Scrutiny Committee on the 21 November 22.

·         Regarding reasons 2 and 3 she confirmed that Council was responsible for approving the budget, however, the Governance Agreement of the company made it clear that the Cabinet had authority to approve the Business Plans of the company.

·         Reason number 4 - a great deal of evidenced consultation had taken place as referenced in the response to reason 1.

·         With regard to reason number 5 she again referred the Committee to the committees which previously had considered this and which were all accompanied with reports on financial and legal implications.

 

 

 

 

 

 

 

Discussion took place and consideration was given to:

 

·         The rationale for each of the call in reasons had not been provided as part of the agenda for the meeting. This may have been helpful to the public and those discussing the issue. The rationale in each case was then provided by one of the Members calling in the decision.

·         The short length of time between the publication of documents and the meetings taking place to discuss and decide upon those documents.

·         The absence of sufficient reasons for the Cabinet decisions.

·         Article 15.2 was referred to in terms of reasons needing to be given by Council for all of its decisions.

·         Whether the Council was obtaining ‘best value’ for the sale of its assets, this needed further enquiry.

·         Elements of the original Business Plan appeared to have been omitted from the revised Business Plan.

·         Any Members of the Scrutiny Committee appointed to the Cabinet following this meeting would not be able to consider the matter as voting members of the Cabinet since there would be a significant element of predetermination.

·         Some initial confusion as to whether or not the call in would be allowed.

·         Any decisions regarding the budget needing to be made by full Council and not Cabinet.

·         The revised Business Plan had not been considered by the Scrutiny or Audit Committee.

·         The ‘Notification of Key Decisions’ was not thought to have given proper notice of the matter.

·         Further advice was needed on matters such as how long to market a property and what was ‘best value’.

·         It was confirmed that the Cabinet had asked the company to amend the Business Plan with regard to a number of factors and the company had complied.

·         The financial effect upon the Council if the Business Plan was not able to proceed. This may lead to reductions in service provision and consideration of using reserves. It was confirmed by the S151 Officer that the potential overall financial loss to the Council would be extremely significant.    

 

It was RESOLVED:

 

      I.        That the Scrutiny Committee supports the original Full Council recommendation number one that, neither of the business plans or business cases in their current form be supported. This should now extend to the final version dated 27 January 2023. This recommendation should be returned to Full Council for consideration.

 

    II.        That the Scrutiny Committee supports the original Full Council recommendation number two in its entirety. Cabinet has decided to continue to fund 3 Rivers but it has not stated to which stage.  Cabinet should be recommended/asked to clarify this point.

 

   III.        That Scrutiny Committee note the further part of recommendation number two which states “It further recommends that independent legal and financial advice be sought to help inform those considerations and explore what options are available”; and consider that in the light of Cabinet decision number 6 this matter has not been addressed as there are potential budgetary implications the matter should be referred to Full Council for decision.

 

  IV.        That Scrutiny Committee recommend that decision three should not be implemented until the matter has been reviewed by Full Council with respect to the potential budgetary effect and a full independent review has taken place into the procedures and advice as to the legality for the sale of this site with the reduction in value. This may include reference to the Secretary of State as we have a duty to obtain best value.

 

    V.        That Scrutiny Committee recommend that decision four be referred to the Full Council in the light of its major impact on the forthcoming draft budget.

 

(Proposed by Cllr B Warren and seconded by Cllr W Burke)

 

Notes:

 

(i) Cllr J Downes requested that his abstention from voting be recorded.

(ii) A proposal that the Scrutiny Committee makes ‘no recommendations’ to the Cabinet was not supported.

 

It was further RESOLVED that:

 

The Scrutiny Committee consider an external investigation into the Council’s handling of this matter, including the processes followed, from its inception to the current date.

 

(Proposed by Cllr J Downes and seconded by Cllr B Warren)