Agenda item

To receive any questions and or statements relating to any items of the Council powers/ duties or which otherwise affects the District and items on the agenda from members of the public.

Barry Warren

Mr Chairman

A Performance and Risk report has been circulating before various Committees and Policy Development Groups (PDG’s) of the Council.  At a recent meeting of the Audit Committee a member  commented on the low risk score under reference CR9a 3 Rivers – Reputational Damage - but regrettably his comments and the response from the Section 151 Officer are not minuted other than by a meaningless passing reference.

The Section 151 Officer concluded his response to the member with these words: “I also do think, this is my own personal opinion, the council does need to move on and refocus its effort on delivering the services we should be proud of and that our residents want, rather than dwelling on something that has happened and has now been finished.”

3 Rivers is being closed down, but how can it be said to be finished when the Council has admitted to a loss of millions of pounds and had millions more moved from reserves, or brought back from previous years, to try and reduce the visible loss figure.

There are still ongoing impairments; unsold properties at Bampton; land in Cullompton bought at anover-inflated price; St. George’s Court in Tiverton still requiring considerable additional expenditure to make it ready for HRA use; the sellingof land bought to deliver 70 affordable houses in Tiverton, the Park Road Nursery site and more.

Some of these issues will be affecting the Council Tax Payers of Mid Devon for some years yet. It may be convenient to wish it was finished - but it is not.

Also, will this Council’s partnership commitment with Zed Pods be a new 3 Rivers?

Many questions are being asked about costs and construction. Detailed responses – not answers – have been put forward to public questions.  One recent response, given by the relevant portfolio holder, was so very long and detailed that the words could only have come direct from Zed Pods. It is a pity that some of that information is different from what is being put forward in the planning applications that Zed Pods are making on behalf of MDDC. 

Questions are also being asked about project delivery times being extended and costs increased.

Is ‘due diligence and value for money’ really being exercised on behalf of the Council Tax Payers?

Will the Scrutiny and Audit Committees take a good and forensic look at the public money spent on these projects?

The Chair stated that a written response would be provided within ten working days.

Paul Elstone

Question 1

Despite the land at Knowle Lane Cullompton having been valued at only £1.665 million, the Council, Cabinet and Committees have been told that the Council paid £3.662 million for this land.

But an examination of the Council 2023/24 accounts has revealed that on the 2nd February 2024 the Council paid 3 Rivers £4.394 million – a payment clearly shown as for the purchase of Knowle Lane. The difference between the £4.394 million actually paid to 3 Rivers for Knowle Lane and the £3.662 million that was said to have been paid is £732,000.

Please can this very substantial discrepancy of £732,000 be fully explained?

Question 2

When the very low Reputational Risk ranking for 3 Rivers was challenged by a member of the Audit Committee on 20 August, the S151 Officer said that he considered the risk ranking was correct and said he thought it was time to move on and not dwell on the past.

In his response, the S151 Officer admitted that 3 Rivers had been a mistake. Also saying that the problems at 3 Rivers were down to poor trading conditions in 2019.

But trading conditions in 2019 were good. The Bank of England interest rate was at 0.75 percent and falling.  Building material prices had been flat for an extended time.

Property prices were increasing.  It was not the trading conditions that was the problem in 2019, this is just an attempt at an excuse.

The S151 Officer was the 3 Rivers Finance Director in 2019 and knew that 3 Rivers was already in financial distress at that time.

In November 2019, the Council had to make an impairment of £790,000 for

 3 Rivers bad debts on the Working Capital and St George’s Court loans.

The S151 Officer had advised the Cabinet, in 2017,  that they should set up the 3 Rivers Company and let them build St George's Court because it would make a profit of £350,000 plus. But by November 2019 the S151 Officer fundamentally changed position and told the new Cabinet, in respect of St Georges Court, that,  and I quote  ‘There was obviously no profit in it’.

Will all members accept that until all relevant information is made available to the public, including Audit Reports and Business Cases and which have previously been suppressed and based on 3 Rivers supposed business damage and confidentiality, then the Reputational Risk to this Council from 3 Rivers will persist and may even escalate?

The Chair stated that a written response would be provided within ten working days.