Agenda, decisions and minutes

To confirm as a correct record the Minutes of the meeting held on 26 April 2018.

RESOLVED that the minutes of the meeting held on 26 April 2018 be approved as a correct record and signed.  

To receive any apologies for absence.

Executive Members: Councillors V.W. Broad (Leader of the Council), Dr L.R. Hack (Deputy Leader), E. Humphreys and Mrs R. Mill.

Non-Executive Members: Councillors N.D. Harrison and C.T.H Whinney.  

To receive any declarations of interest.

None.

To receive any statements from the Leader of the Council, Members of the Cabinet or the Chief Executive.

None.

To consider any item(s) which, in the opinion of the Chairman, should be considered as a matter of urgency – Local Government Act 1972, Section 100B(4)(b).

(Note:  Urgent business must be submitted in writing but may be supplemented by an oral report).

None.

RECOMMENDED that members of the Press and public be excluded from the meeting for the following item of business under Section 100A(4) of the Local Government Act 1972 on the grounds that:

(i)            it involves the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Act; and

(ii)          the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

RESOLVED that members of the Press and public be excluded from the meeting for the following items of business under Section 100A(4) of the Local Government Act 1972 on the grounds that: (i) it involved the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Act; and (ii) the public interest in maintaining the exemption outweighed the public interest in disclosing the information. 

To consider an update with exempt information regarding Pathway for Care and the new Digital Monitoring Company.

Councillor T. Schofield, Executive Member for Finance, introduced the report and explained that, on 29 March 2018, the Executive had approved recommendations relating to proposals for the future structure and ownership of Pathway for Care. It was highlighted that the purpose of these proposals had been to separate the supported living and digital businesses and to secure two significant investors. It was noted that an update on progress had been considered by the Executive on 26 April 2018.

Councillor Schofield informed the Executive that the Council owned 100% of the digital monitoring company. However, it was noted that officers had reached commercial terms with an investor, who had agreed to take on the assets and liabilities of the digital monitoring company.

The Executive Member for Finance explained officers had sought external advice from legal and tax advisors in order to determine the best mechanism to effect the commercial terms agreed. The Executive was informed that advice had been sought on whether it was best structured as an asset sale or share sale and whether there were any other tax considerations that needed to be considered in concluding this deal. It was noted the report of the tax advisors had been provided as a background paper to the Executive report.

In relation to the advice received, the following points were noted:

-       The transaction was best structured as an issue and sale of shares in RBBC Ltd.

-       Existing liabilities on the company balance sheet should be restructured as a loan in order to clarify the accounting and tax position and that there were clear obligations from a HMRC perspective.

-       A small tax liability for the company would arise if any of the shares assigned as part of the deal were treated as a benefit in kind.

Councillor Schofield went on to explain that previous Executive decisions had provided authority to proceed with the issue and sale of shares in RBBC Ltd. It was noted that benefits in kind were an internal company employment matter. Councillor Schofield reminded the Executive that the decision before them related to advice received in relation to classifying existing liabilities as a loan.

It was highlighted that the proposal, outlined in the report, did not request any additional lending beyond the £15K loan facility previously approved. It was noted that it was just a change of treatment for accounting purposes.

Councillor Schofield informed the Executive that a copy of the Letter of Intent, outlining the terms of the deal with the investor, and the RBBC Ltd balance sheet for the transaction, had been supplied as an addendum to the agenda. It was noted that the Letter of Intent outlined formally the key terms of the deal between RBBC Ltd and the investor and the expected financial position of the company at the time of the transaction.

The balance sheet highlighted that the proposed conversion of loan interest accrued to date and PAYE liabilities into a loan with value £96,000 was a significant proportion of the  ...  view the full minutes text for item 110.