Agenda item

The Executive Director for Economic and Commercial Growth made a presentation to committee on commercial strategy and governance.

The following points were raised:

·         The Commercial Plan for 2014-16 brought in £1 million savings, and included a £20 million commercial property portfolio;

·         In December 2016, a Commercial and Economic Growth directorate was created;

·         Grants for economic growth and development in 2017/18 were awarded, amounting to £6 million for housing, and £2 million for employment;

·         The Commercial Investment Portfolio in February 2017 targets a 3% net return;

·         The crematorium was set to net a 3% return in year 4.  The leisure contract amounted to £135k a year, and the commercial services (waste) contract gave a £200k income for 2017/18;

·         There were commercial loans of £1 million; 2% above the borrowing rate;

·         Other ongoing corporate vehicles and agreements were:

                                      I.        Sure Staff 2016;

                                    II.        Sun Inn and Roseway carpark grants;

                                   III.        Grant funding agreements with Dransfield Property Limited;

                                  IV.        Market Street Renewal Limited;

                                    V.        Joint venture agreement with Acis;

                                  VI.        Development Partnership.

·         New projects follow a process, starting with the inception at Management Team (internal), Member approval at Prosperous Communities and Corporate Policy and Resources committees, followed by ongoing governance at Programme Board and its sub Boards (internal);

·         A new Monitoring Officer report will be introduced from June 2019, including:

                                      I.        Constitutional review and the re-affirmation of delegations;

                                    II.        A review of governance activity and any changes over the administrative year;

                                   III.        A review of the Standards Regime and details of any code of conduct breaches.

Following this presentation, Members of the committee had the opportunity to ask questions of officers present.  Further information was provided:

·         A key element from the external auditors was around whether returns match investments.  In addition, there needed to be openness and transparency around decision making; however, on occasion private papers for committee would be necessary;

·         Selection of partners should be done wisely, and effective working with those partners was crucial;

·         Everything should be tied back into the Executive Business Plan and Medium Term Financial Strategy (MTFS);

·         An economic impact assessment (EIA) would be done prior to projects such as the Sun Inn Hotel.  The model for the EIA was set up by an external body specialising in this area; however, WLDC now have their own version of this model.  The model would evolve with any future guidance;

·         Build costs were higher than the end values in the case of the Sun Inn.  Grant funding regimes such as the European Regional Development Fund (ERDF) help to fund the build, and others like it.  Where there were gaps in funding, advice had been taken from European lawyers and surveyors. All payments made in arrears were scrutinised.  The challenge was explaining why developers need gap funding;

·         Internal Auditors look at governance, risk and control.  The commercial strategy had been looked at over a number of years, and improvements are recommended where necessary.  Next year’s plan will look at income and investment; the auditor’s role was to look at how the council manages its business;

·         An EIA is only part of the project’s due diligence; it would also be looked at in purely economic terms, through a cost/benefit analysis;

·         A project would be stopped if it was in the Council’s best interest to do so.