Minutes:
The Committee considered a confidential report of the Director of Finance which was built upon previous reports that had been submitted to meetings of this Committee, during the last three financial years that had highlighted the potential risks to the Council from poor supervision of companies/partnerships of which it has ownership and how governance oversight (including that of the Audit Committee at several Councils), had failed to identify this risk resulting in significant financial loss.
The Audit Committee had therefore requested that the Assistant Director of Corporate Governance and Strategic Financial Management prepare a report for its consideration at least every six months, which presented the potential risks to the Council from the partnerships in which it has an interest. The submitted report therefore updated the report previously presented to the Committee at its meeting on 21st July 2022. It also linked into the report produced on the Specific Risks, that was presented to the Committee’s meeting on 1st November 2022, which detailed the current assessment of risk to the Council from the operation of the Northern Roots Charitable Company. There was, in addition, also a report, elsewhere on this meeting’s agenda which outlined the perceived risks should the Council progress with the setting up of a Housing Company which was an option to be considered in the agreed Housing Strategy.
The submitted report identified partnerships in which the Council had an interest and then used a traffic light system to rank the risk (green, amber and red), to the Council as of 31st December 2022. These partnerships and the current assessment of risk have been split into seven categories: 100% Council Owned Companies; Companies in which the Council has an Equity Stake; Special Purpose Vehicles; Council Initiatives; The Green Agenda; Local Government Association; and Residual Commitments.
In terms of issues for this Committee to consider the report had identified issues detailed in the report on the following partnerships:
i. Northern Roots
ii. Meridian Development Company
iii. Unity Partnership Limited
iv. Community 1st Oldham (Chadderton) Limited
v. Oldham Property Partnership
vi. Hollinwood Development Partnership
vii. Towns Fund Board
In addition, the Committee was asked to consider the oversight of Council Companies that were operated by Cabinet. The Council has set up a Shareholder Committee Cabinet Sub-Committee, whose Terms of Reference were attached at Appendix 1 of the Committee’s report. Section 1 of the main report highlighted the Shareholder Sub-Committee was currently operating.
The latest version of the Partnership Risk Dashboard was circulated and the Committee was asked to discuss individual sections of the Dashboard with Members being provided further detail on the current assessment of risk. This would allow, if required, further targeted information to be presented to future meetings.
Resolved:
1. A review be undertaken by the Council regarding the Shareholder Committee’s Terms of Reference.
2. The Constitutional Services Team be requested to review the authority’s appointments to outside bodies and to report thereon to the Annual Council meeting on 25th May 2023.
3. That appropriate training be provided to those Members and Officers who are appointed by the Council to be Company Directors.
4. That discussions be held with the Chairs of the Council’s Overview and Scrutiny Committees regarding arrangements for the future oversight and scrutiny of Council Companies.
5. The Committee notes the report and the current level of assessed risk on current partnerships to the Council.