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Agenda item

Public Question Time

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

Minutes:

Mr Nick Quinn, a local resident stated that, he was speaking to Agenda items 6 (Performance and Risk) and 8 (Internal Audit Report):

 

Firstly: In the Risk Report Appendix 6 there is a risk “SPV – 3 Rivers – Failure of the Company”, in which the current Risk Likelihood is reported as high (4). One of the impacts of this risk is the inability of 3 Rivers to service and repay the loans from MDDC. Such an inability is already being reported!

 

A Financial Update Report has been given to the last Cabinet meeting and to all of the PDG’s, which states that the 3 Rivers is likely to overspend on the St George’s Court project by around £377,000. The report also states that the company have said that they are unlikely to be able to repay the Working Capital loan of £504,000 - within the promised timeframe.

Your Accountants are proposing to impair (or write-off) all this money – noting that “this will have a real impact on the revenue account”.

 

It seems very odd to me that Audit Committee should not be given information about a situation with such a high financial impact or an up to date risk report reflecting this.

 

My questions are: Why is the situation not being reported to Audit Committee? and why has the Risk Likelihood factor not been set higher?

 

Secondly: At this Committee, last year, I asked about the loan of £750,000 that was made to 3 Rivers in March 2018. I was told that the loan was open-ended but would be repaid after the sale of the properties in the St George’s Court development.

 

My question is: In the light of the reported 3 Rivers situation, is this loan still secure or also in danger of not being repaid?

 

Thirdly: In the Internal Audit Report covering the Property Development Company, Governance Review - showing improvements are still required. The text identifies two areas of risk to the primary objective of the company – which is to provide additional income for the Council.

Audit did not identify the selection of projects as a risk area, but I wonder whether they should have? At the last Cabinet meeting, when responding to questions about the proposed financial impairments, the Deputy Chief Executive said “in the first year we have taken on the St George’s Court scheme, there was obviously no profit on it. To be honest, if 3 Rivers had been offered it on a commercial basis, it would not have taken it. So we are delivering a project that the Council wanted to see done, that was likely to only break-even”.

 

My question is: If there was never any profit in the St Georges Court development and 3 Rivers would have refused it, if they could. Why was the company’s prime objective put at risk by giving it this profitless project to complete?

 

The Chairman informed Mr Quinn that he would receive a written response to his questions in due course (attached to the minutes).