Agenda item

To consider findings of a review of the Council’s commercial activities and a recommendation for the adoption of a good practice Framework and Checklist to guide future working and ensure lessons from past practice are learnt.

Councillor M.A. Brunt, Leader of the Council, invited the Executive to consider a report setting out the findings of the Commercial Governance Review Member Task Group. Councillor Ellacott, Chair of the Task Group, was invited to introduce the report and to outline the approach and key aspects of the review.

The Executive was informed that the review had sought to be forward facing and had identified lessons learned for the future. It was noted that the Task Group had undertaken a thorough review of previous commercial activities, including consultation with relevant Members and Officers, with additional advice from an independent consultant. It was identified that all Members had been updated during the course of the review, and thanks were offered to all those who had contributed to the process.

The Executive was asked to note that:

-       The scope of the review was to consider the governance arrangements in relation to all commercial activities that the Council had been involved in, including Pathway for Care; RBBC Limited; Greensand Holdings Limited; Horley Business Park Development LLP.

-       The Task Group’s methodology had sought an evidence led approach to its work and a series of key questions and lines of enquiry had been used to inform the review.

-       The Task Group had undertaken a documentary review of Council/Committee reports and minutes while additional evidence was gathered from the Council’s Chief Executive, Section 151 Officer, and the former Leader of the Council.

-       Nine meetings / evidence gathering sessions took place between September 2018 and January 2019.

It was highlighted that the outcome of these meeting had informed the design of the proposed commercial governance framework, set out at Appendix D to the report presented, which the Task Group had recommended form the basis for future consideration of potential commercial activities. It was noted the framework comprised a checklist of issues and “golden rules” to be applied whenever the Council proposed to set up a commercial venture. 

The Executive was informed that the draft commercial governance framework had been considered by the Overview and Scrutiny Committee in February 2019. RSM, the Council’s Internal Auditors, had also offered suggestions on the framework. The Executive was asked to note that comments from the Overview and Scrutiny Committee and the report from the Internal Auditors had been appended to the report presented.  

In response to questions, it was highlighted that the framework proposed establishment of a Commercial Ventures Sub Committee.  It was noted that this would introduce a streamlined approach to the Council’s company governance. The importance of supporting effective scrutiny of commercial activities was also highlighted.       

The Leader of the Council thanked the Members of the Task Group and supporting Members and Officers for their work in conducting the review.

RESOLVED that:

(i)            The findings of the Commercial Governance Review Member Task Group be noted.

(ii)          Subject to (iii) and (iv) below, the Commercial Governance Framework be adopted and implemented.

(iii)         The Overview and Scrutiny Committee’s request (from its meeting on 14 February 2019) for the Commercial Governance Framework to be incorporated into the Constitution be supported and that this be built into a report to the next meeting of the Executive (18 April 2019) providing full governance arrangements for the dissolution of existing Sub Committees and the establishment of a Commercial Ventures Sub Committee. 

(iv)         Once established, the Commercial Ventures Sub Committee, be tasked with considering the suggestions from the Internal Audit Report, set out in Appendix F of the report presented, when implementing the Commercial Governance Framework.

Reason for decision: To set out the findings of a review of the Council’s commercial activities and to support the adoption of a good practice Framework and Checklist to guide future working and ensure lessons from past practice are implemented.

Alternative options: To either adopt or reject the recommendations of the Commercial Governance Task Group.