Agenda item

To consider a joint report by Councillors Bobby Feeley, Cabinet Lead Member for Well-being and Independence and Julian Thompson-Hill, Cabinet Lead Member for Finance, Performance and Strategic Assets (copy enclosed) seeking Cabinet’s recommendation to Council to support the adoption of the draft Articles of Association for the proposed not for profit Local Authority Trading Company Limited by Guarantee.

RESOLVED that Cabinet recommend to Council that it support the adoption of the draft Articles of Association and Members Agreement for the proposed not for profit Local Authority Trading Company Limited by Guarantee as set out in the appendices to the report.

Councillor Bobby Feeley introduced the report seeking Cabinet’s recommendation that Council support adoption of the draft Articles of Association for the proposed not for profit Local Authority Trading Company Limited by Guarantee as an alternative delivery model (ADM) for the delivery of various leisure related activities and functions.  The report was another stage towards creation of the ADM.

Council had agreed to support the creation of a Local Authority Trading Company Limited by Guarantee on 30 May 2019.  The constitutional document of a company limited by guarantee was its Articles of Association registered for public inspection at Companies House (Articles).  It was proposed to adopt Articles based on the Model Articles with changes specific to the ADM’s requirements in order to provide the Council with protections and control in the running of the company.  In addition to the Articles the report included a Members Agreement between the Council and the ADM which set out a number of matters not included in the Articles.

The Head of Legal, HR and Democratic Services explained that the draft Articles of Association, Model Articles and draft Members Agreement must be read in concert and would effectively form the constitution of the new company.  He guided members through the main functions as set out within the Articles and the terms as set out within the Members Agreement.  Some further refinement would be required to the wording of the draft documents which would be explained when the report was submitted to Council in July and delegated authority would be sought in order for the documents to be finalised.

In response to questions the Head of Legal, HR and Democratic Services advised –

·         in addition to presentation of the formal accounts twice a year the Council would be monitoring to ensure transparency in respect of financial performance; the company would have to comply with any requests from the Council for financial information

·         in terms of whether any new targets set by the Council would be applied to the new company it would be for the Council to agree with the company through its business plan if it wished for certain targets to be achieved; in respect of performance reviews detail of the new company would be included within the Annual Performance Review for the Council which reported upon all of the services for which the Council was responsible (including those commissioned)

·         the reasoning behind the object relating ‘to promote jobs and strengthen the local economy’ had likely been prompted to provide reassurance that the point was not to cut jobs but to protect and promote them and given that the facilities were key in some parts of the county to economic activity and regeneration

·         scrutiny committees could call matters relating to the new company into scrutiny and the Head of Finance explained that the Wales Audit Office would audit elements of the company’s financial performance that were in the Council’s own statement of accounts.  The company would also have its own auditors

·         the appointment of the Board of Directors was a matter for Council given that it related to the constitution of the new company and a report would be submitted to Council in September seeking confirmation of the Board’s membership.

Given the need for all documentation to be read in concert it was agreed to amend the recommendation to also include adoption of the Members Agreement.

RESOLVED that Cabinet recommend to Council that it support the adoption of the draft Articles of Association and Members Agreement for the proposed not for profit Local Authority Trading Company Limited by Guarantee as set out in the appendices to the report.

At this juncture (11.45 a.m.) the meeting adjourned for a refreshment break.