Agenda item

Companies Performance Update - Winter 2023 (Part Exempt)

To provide an update on the companies owned and part-owned by the Council.

RECOMMENDED that Overview and Scrutiny Committee:

Notes the Companies Performance Update, as set out in the report, and makes any observations for consideration by the Partner, Shareholder and Trustee Executive Sub-Committee.

Minutes:

Councillor Andrew King, Portfolio holder for Commercial and Community Assets, introduced the six-monthly update on the performance of companies owned or part-owned by the Council.

The report provides an overview of the performance of the companies currently owned or part-owned by the Council. The currently operational companies are Greensand Holding Limited, Horley Business Park Development LLP, and Pathway for Care Limited.

Considering these companies in turn

Preparations are being made in anticipation of Greensand Holdings Limited being dissolved in an orderly manner, with its assets being transferred to direct holdings by the Council. The Council is continuing to work with the company's directors to ensure that the company's affairs are properly managed and to review its future strategy. The company's assets are continuing to be managed with options for their future use being reviewed.

Horley Business Park Development LLP is on track to be dissolved by way of a Members Voluntary Liquidation, with a plan to resolve its financial affairs currently being implemented. Interest owed by the LLP to the Council is impaired in the Council accounts to reflect the risk of credit loss.

There is an ongoing, commercially sensitive dialogue with the majority shareholder in Pathway for Care Limited; with it considered likely that the company will be forced into administration unless a negotiated settlement can be reached. The most recent company accounts received by the Council for the year to the 31st of December 2022 do not have a valid audit opinion and show that the company is technically insolvent. The redemption date of the 23 April 2023 for the Council's £1.1 million of preference shares in the company has not been honoured.

More information on the details of these company arrangements is available in the confidential Part 2 section of the report.

Whilst the performance of these companies is not as was originally envisaged when they were created, and is in some cases markedly unsatisfactory, every effort is being made to ensure that current situations are effectively managed to secure best available value for the Council, the borough, and its residents.

The Council also owns RBBC Limited, created to preserve the company name in case of future need. Options for the future of this company are being developed for consideration by this Partner, Shareholder and Trustee Executive Sub-Committee.

Several advance questions on the Companies Performance Update – Winter 2023 had been submitted prior to the meeting. The advance questions and their responses can be viewed here:

Document Advance Questions and Answers OS 7 December 2023 | Reigate and Banstead Borough Council (moderngov.co.uk)

The Portfolio holder for Commercial and Community Assets, invited Members to ask questions and comment on the Companies Performance Update – Winter 2023 provided in the agenda pack.

In response to the questions raised, the following clarifications were provided:

It was confirmed that by “to secure best available value for the Council, the borough, and its residents” the Council would minimise the financial impact of involvement in these companies.

Members noted that it could be beneficial to analyse the history of the Council’s involvement in these investments and provide training to officers and Members following the findings. The Managing Director confirmed than an undertaking had been made to carry out a lessons learnt exercise on the companies as a whole.

This item was scrutinised more fully during the exempt part of the meeting due to the confidential nature of the discussion.

RESOLVED that Overview & Scrutiny Committee:

Noted the Companies Performance Update, as set out in the report, and made observations for consideration to the Partner, Shareholder and Trustee Executive Sub-Committee.

Supporting documents: