Agenda item

Review of Council Governance of PropCo

Minutes:

Cabinet considered the report regarding the review of governance arrangements between the Council and the RBWM Property Company.

 

The Leader of the Council and Chairman of Cabinet, Business, Economic Development and Property informed that before Cabinet considered the report he wanted to say that this was not a review of the RBWM Property Company, but the relationship with the Council.  The property company had achieved a considerable number of successes since its inception, both in terms of actually delivering its core business of affordable housing, but also assisting and facilitating the unlocking of several large scale regeneration projects.

 

A very prime example of its success had been such creativity and innovation, for example, in two of the recent reports that was presented before Cabinet, one was the Maidenhead Heritage Centre and former Sports Able building, but more recently, the successful relocation of the Maidenhead Community Centres, which he had the great pleasure of visiting along with Councillor Hill earlier in the week. This showed the added value to company provided.

 

In June 2020, CIPFA reported to Cabinet on their governance review including financial management arrangements of the Council and an action plan was developed to respond to issues that they raised.  One of the actions identified was to review current partnership arrangements with the property company and to identify common purpose and goals for both partners. 

 

The Council commissioned 31ten Consulting Limited to undertake a review of the current governance arrangements in the Council for managing the RBWM Property Company. They were asked to highlight both best practice examples as well as areas where the current arrangements could be improved. 

 

As part of the process a number of elected members, senior officers and key partners were interviewed, which included a mix of both Cabinet Members and opposition Members.  Cabinet would be requesting that Corporate O&S Panel to consider and monitor the proposed action plan.  Scrutiny was a core requirement and was an important element in reviewing the arrangements and progress made around governance.  The report also recommended that the companies focus be brought back to its original incepted in 2016, which was to provide and indeed manage a pipeline of affordable homes, as well as including consultancy support to the council for our property arrangements.

 

The Cabinet Member for Finance and Ascot said he just wanted to recognise how, over the years, the property company had quietly shifted from its initial objective to something rather different. That said he had nothing but good words about the company.   It enabled the council to achieve certain things that they would never have achieved without that involvement.

 

The Cabinet Member for Housing, Sport & Leisure, and Community Engagement said it was absolutely superb to see that the profit company being returned to its original ambition of delivering council owned and council run housing.  There will always be a need for council owned stock within local authority areas to support some of our most vulnerable residents. For the first time the Housing Strategy is set out that we want to deliver on our smart targets, an objective assess need to drive up the number of affordable and social rented units in the borough.

 

Mr Hill addressed Cabinet and informed that he felt it was a sobering report with many excellent and long overdue recommendations.  He welcomed cllr McWilliams commitment to social rent accommodation.  At Paragraph 2.6 we are reminded that the key objective of the company when it was set up IN 2016 was to provide affordable housing, and keyworker housing.

 

He questioned what the company had been doing.  Paragraph 3.8 of the Independent report says that it had moved in selling council assets and maximising much needed capital receipts.  But more than that, the 31ten report stated at paragraph 3.28 that the shift to maximising land receipts was not in the 2019 business case and we have not seen any documentation of when or how that decision was taken.  Why was there no documentation or public discussion of this fundamental change in the company’s activities.  When and how was that decision actually taken.

 

Members of the public need to know more and be shown more.  Were Slough residents shown what their companies were doing.  But will those residents have to pay the £159m price tag of service cuts.  We need regular public information about the PropCo to maintain confidence.

 

No detail has been too small about this company for it not to be kept secret. There were no public meetings. The minutes were taken down from the website. But there appears to be a reason for that. Tonight we learn at paragraph 3.19 of the report that the Shareholder Board, which was supposed to monitor operational progress against the business plan, does not even meet! Why did it not meet.

 

Mr Hill asked if the Leader could explain what 31Ten meant when they said that key Members are more involved in the operational side of the PropCo than we might expect. It was claimed that the PropCo has provided up to £3.3m of savings, but that is hidden in another unpublished document known as the Value for money log, could this be published.

 

Mr Hill said that  that I asked you that very question at council last year and I was told that the MD of the PropCo was not an officer of the Council. But the report tonight now says that the PropCo provides line management to the Council’s inhouse property team. So the MD of the PropCo is therefore in fact an officer of the Council.  How many more property deals should we expect behind closed doors, without business cases, without Shareholder meetings, but with residents expected to burden every last penny of the risk.

 

The Chairman thanked Mr Hill for his comments and said that there was no comparison between RBWM and Slough were the property had liabilities on the scale that they had encountered.  Decisions made had been via Cabinet and Council and where possible in Part I for transparency. 

 

The company had provided advisory services to maximise value for money for the council and as part of this had included maximising capital receipts.  They had help provide much needed affordable housing and helped the council review its assets.  We commissioned this piece of work, to make sure that the governance arrangements were appropriate, were robust and indeed, were the strongest level that we felt appropriate given the nature of the relationship.

 

The RBWM Chief Executive confirmed that the Managing Director of the company was employed by the company, not by the Council and was not a council officer. There were line management relationships of property service professionals, to the property company and these needed to be formalised.

 

Cllr Baldwin as that if they recommendation was to return the company back t its original objective, one must ask why it had been allowed to stray from that objective and why this had not been picked up.  Part of the review had been to consult with the opposition and he asked that they e included in moving the governance forward.  As stated in paragraph four of the report summary if the intention is to improve the transparency of Prop COEs activities, what could better satisfy your two most burning imperatives here we have the opportunity for collegiate working and transparency.

 

The Chairman responded that it would be fair to say that they had been more than talking about it for the last two years and in fact, been doing it. They had adopting a far more collegiate and consensual approach than previously may have been the case. The level of transparency and openness is at all-time record highs within the authority.  He said that given that this was going to scrutiny the opposition leaders on the panel should be more than happy to represent his views when considering the item. 

 

Cllr Price addressed Cabinet and said that she was concerned her was the willingness to wait so long before taking any action. I personally have been very concerned about the lack of transparency and how the property company had been run for over a year. Yet this report was one of the last actions from CIPfA to be undertaken.  She was concerned that one in Cabinet actually understood that the lack of transparency was glaring, that we have a report that says there should be SMART objectives.  There was also a lack of affordable housing provision when looking at the BLP.  

 

The Chairman said that once the BLP was adopted there would be a significant amount of development providing AH.  That said it was not he responsibility of the property company to deliver the AH targets.  As previously mentioned there had been plenty of report presented at Cabinet over the last 2 years with most of them on line for delivery.   He reiterated the importance of taking this via scrutiny so did not agree that there was an unnecessary delay given scrutiny’s importance.  He was delighted that the action plan would be going to and be monitored by the Corporate O&S Panel. 

 

Resolved unanimously:  that Cabinet notes the report and:

 

i)            Asks the Chief Executive to develop an action plan, in consultation with the Leader of the Council and Chairman of Cabinet, Business, Economic Development and Property to respond to the issues raised in the review of governance at the Council in relation to the RBWM Property Company (PropCo)

 

ii)          Requests Corporate Overview and Scrutiny Panel to consider and monitor the action plan that officers develop and to form part of the Annual Governance Statement Action Plan for this year.

 

iii)        Delegates to the Chief Executive to make suitable arrangements in relation to setting up a client-side function within the Council and identify a suitable lead officer to take on this role

 

iv)        Agrees that the overall purpose of the RBWM Property Company (PropCo) should be as originally approved in 2016 and amended to include consultancy support for the Councils contractual property arrangements

 

v)          Agrees that all necessary changes to relevant legal documentation is delegated to the Monitoring Officer to execute on completion of the action plan

 

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