Agenda item

Purpose of the report:  Scrutiny of Services and Budgets/Performance Management

To provide an update to Members on the role of the Shareholder Board and its decision-making in relation to companies in which the council has a shareholding.

 Declarations of Interest:

None.

Witnesses:

David Hodge, Leader of the Council

Denise Le Gal, Cabinet Member for Business Services and Resident Experience

Julie Fisher, Deputy Chief Executive

Susan Smyth, Strategic Finance Manager

Key Points Raised During the Discussion:

1.     The Strategic Finance Manager introduced the report by highlighting the key successes of the Board within the last 6 months. A short introduction to the role of the Shareholder Board was given and it was noted that the Council Overview Board had a role in calling the Shareholder Board to account for progress in relation to any company for which the Council is a shareholder.

2.     The Leader of the Council provided a brief introduction as the Chairman of Shareholder Board.  He covered the purpose of the Board and its importance.  There were a number of reasons why a Local Authority might invest in or create a company, and the Leader gave the example of Cabinet’s approval of a Property Company, which changed the Council’s approach to Property management with the aim of developing an asset base to create longer term revenue.

3.     Questions were raised regarding any financial risk related to the partnership with Babcock 4S. The Deputy Chief Executive advised that the Council continued to work with Babcock 4S to improve Schools in Surrey. It was considered whether separate scrutiny of Babcock 4S was necessary.  It was clarified that the Shareholder Board would be undertaking a review of the Council’s joint venture with Babcock 4S, and this could be reported to the Council Overview Board in due course.

4.     Members queried the performance of Surrey Choices, and it was clarified that the Shareholder Board had a role in monitoring progress of this new company and its governance arrangements.

5.     The Strategic Finance Manager went on to explain that all investments made by the Council were supported by business cases. The Leader emphasised the importance of monitoring efficiencies, rather than just cash savings. The Shareholder Board provided an effective challenge and ensured that no unnecessary risks were taken.

6.     Members queried whether the Council would provide equity or debt financing to a company it owned and it was clarified that this would be subject to a Cabinet Decision.

7.     There was discussion about whether the appropriate amount had been invested in municipal bonds.  It was clarified that £450,000 had been invested, which was considered a favourable amount for the Council.

8.     It was confirmed that the Council owned 13.1% of Future Gov.

9.     Members queried whether land purchases carried out by Hasley Garton Properties LTD, which had been set up as a Surrey County Council wholly owned Local Authority Trading Company, would need to satisfy te “well-being requirement”, introduced by the Local Government Act 2000.  The Chief Property agreed to report back on this matter.

Action/Further Information to be provided:

None.

Recommendations:

That an update on the Shareholder Board review of the Council’s involvement in the joint venture company (Babcock 4S) to be included in the next scheduled report to Council Overview Board.

That a progress update be received on Surrey Choices governance mechanisms and reported back to the Council Overview Board if necessary.

Scrutiny Board Next Steps:

The Board to receive a further update from the Shareholder Board in April 2016.