Agenda item

To note the Autumn 2021 Companies Performance Update, as set out in the report and Annexes, and to make any observations for consideration by theCommercial Ventures Executive Sub-Committee.

The Committee received a six-monthly update on the performance of companies owned or part-owned by the Council from the Portfolio Holder for Commercial and Investments, Councillor Archer. Further information was set out in a report to the Committee – Companies Performance Update – Autumn 2021 – which was published in the meeting agenda pack. To support good governance of the Council’s companies, the Committee, and the Commercial Ventures Executive Sub-Committee (CVESC) received regular updates on the performance of these companies.

The three operational companies owned or part-owned by the Council currently consisted of:

·       Greensands Holdings Ltd (a property development and investment company wholly owned by the Council which owns an office building and a plot of development land). This was currently considered to be performing overall in line with the Council’s objectives and expectations. Members noted that the current directors of the company were William Pallett, Derek Beck and Councillor Michalowski.

·       Horley Business Park Development LLP (which is a joint venture to bring forward planning and development of the proposed Horley Business Park with Millhill Properties (Horley) Ltd and Berwick Hill Properties Ltd). The Council is a partner in this proposed development. This was not currently performing in line with objectives due to activity being limited by matters currently being resolved with the joint venture partners.

·       Pathway for Care Ltd, a supported living provider, where the Council is a minority shareholder. The majority shareholding was held by Transforming Healthcare Group Ltd. Additional information was being sought from the majority shareholders on current performance.

It was reported to Members that Camelia Close (Tadworth) Residents Management Company was set up in May 2021 as a short-term arrangement. This was not a Council-owned company but related to a RBBC development site and would be in place until all units were sold, when leasehold management would be transferred to a specialist resident management company.

The Council was currently developing Part 2 of its Commercial Strategy to set out its approach to future commercial activity. The O&S Commercial Strategy Scrutiny Panel was due to meet on 2 November 2021 to receive an overview of current work to date.

Members asked questions and made the following observations:

·       Business rates collection – long-standing proposals to reform business rates were still under consideration by the Government. The Council received around £50m through business rates and retained approximately £2m.

·       Gatwick Airport ‘strategic gap’ – this was Surrey County Council-owned land between the proposed Horley Business Park development site and the M23 spur road. The emerging plans for Gatwick Airport proposed that some of this land be used as a site compound temporarily to aid with other proposed construction work at Gatwick Airport.

·       Greensand Holdings Ltd rental ­income ­– Members asked for clarification on rental income and loan interest. It was confirmed that modest rental income was received on Council owned land at Fishers Farm (part of the Horley Business Park development land). A loan to purchase the land via Greensands Holdings accrued loan interest of £1.152m as of 31 March 2021. The office building provided rental income sufficient for the company to pay interest on the loan for that purchase to the Council.

·       Replanting trees – as set out in the Companies Performance update report to the Committee on 18 March 2021, a number of trees on land owned by Millhill Properties were felled in November 2020 without the knowledge or approval of the Council. Members asked about replanting oak woodland and Tree Preservation Orders. It was confirmed that this was land not owned by the Council and was subject to an ongoing investigation by the Forestry Commission.

·       Pathway to Care Ltd – Members asked about income from this company. It was confirmed that majority shareholder, Transforming Healthcare Group, had not yet declared a dividend income to the Council.

RESOLVED ­– that:

(i)             The Committee notes the Companies Performance Update, Autumn 2021, as set out in the report to the Committee

(ii)            The observations of the Committee, set out in the Minutes, be considered by the Commercial Ventures Executive Sub-Committee at its meeting on 18 November 2021.