Agenda item

To consider the Cabinet decision in relation to the Creation of Investment Board and Delegation of Functions, further to the provisions of the ‘call in’ process contained within section 18 of the Overview and Scrutiny Procedure Rules.

Councillor Booth explained that he had exercised the right to call-in this Cabinet decision due to his concerns surrounding the accountability and governance arrangements of the proposed Investment Board. He explained that the governance arrangements propose a quorate of only two members with one non-voting officer in attendance. He highlighted that in instances where there is not a unanimous decision the Leader will be able to exercise his casting vote as chairman of the board. Councillor Booth stated that this is not democratically appropriate and he recommends that membership to the Investment Board is increased which will both reduce the burden for board members and increase member involvement in the decision making process.

Councillor Boden thanked Councillor Booth for his feedback and agreed that it was highly appropriate to call-in this item for consideration due to its importance. Councillor Boden assured members that whilst the arrangements allow the provision of a chairman’s casting vote, where required it will only be used in decisions which will restrict the Investment Board as oppose to empowering them. He confirmed to members that he plans to produce a code for the use of the chairman’s casting vote and will keep them updated on this matter.

Councillor Booth thanked Councillor Boden for his explanation but reiterated that the current arrangements do not include the proposed mechanism and therefore his concern still stands. Councillor Boden reminded members that the Investment Board is a sub-committee of Cabinet therefore it is unlikely that a unanimous decision will not be reached during decision making. He offered members assurance that he will consider these comments at the earliest opportunity. Councillor Booth welcomed this.

Councillor Booth asked for clarification that non-board members will be prevented from attending meetings of the Investment Board and will be unable to exercise their ‘right to speak’. Councillor Boden explained that as the Investment Board is a sub-committee of Cabinet, members will have plenty of opportunities to challenge and discuss proposed decisions. He highlighted that holding public meetings of the Investment Board would be inappropriate due to the sensitivity and confidential nature of some of the commercial decisions but the Investment Board welcome members input and scrutiny in the decision making process.

Councillor Hay reminded members that the Chairman of Overview and Scrutiny Panel will be invited to attend meetings of the Investment Board and will therefore have an oversight of the process. Councillor Boden confirmed this.

Councillor Mason asked what research had been carried out in relation to the Commercial Investment Strategy (CIS) and associated boards. Peter Catchpole explained that a lot of evidence had been sought from other local authorities and he benefits from knowledge of this area, as he was previously appointed non-executive director of a LATCO in his previous role. He highlighted that the Council have considered investment models from authorities such as the Borough Council of Kings Lynn and West Norfolk, Peterborough City Council and South Norfolk Council and received guidance from Lawyers in Local Government (LMG).

Councillor Wicks recommended that the terms of reference need to reflect the boundaries of the Investment Board. Councillor Boden disagreed and stated that the terms of reference need to be permissive to allow discretion in the decision making processes. He stated that he expects many of the early decisions of the Investment Board to be heavily scrutinised however as the project progresses the board will mostly be making routine decisions and recommendations. He added that some decisions will be of great importance and in these instances the chairman’s casting vote will not be appropriate. He confirmed that the Section 151 Officer, Peter Catchpole, will be available at all times to provide advice where necessary and reminded members that the Local Authority Trading Company (LATCO) will have its own separate regulations and will be subject to great consideration prior to its implementation.

Councillor Hay asked if there will be substitute members of the Investment Board. Councillor Boden confirmed this and said whilst a quorate of 2 members will be sufficient for routine decision making, this will not be the case for major decisions.

Councillor Booth highlighted that many decisions will be time critical and suggested that a more robust process needs to be in place for members and substitutes of the Investment Board to ensure decisions can be made quickly when required. Councillor Boden stated that a higher membership would result in a higher quorate which is counter intuitive. He assured members that theoretically there are very few circumstances in which board members and substitute members are not available and meetings will be arranged based on member availability.

Councillor Skoulding agreed and highlighted that having fewer members on the Investment Board protects the confidentiality of commercially sensitive decisions. Councillor Boden agreed and stated that he has every confidence in members and attendees of the board. 

Councillor Cornwell requested that a review of the governance arrangements and mechanisms of the Investment Board is included in the Overview and Scrutiny Panel’s annual work programme.

Councillor Cornwell supported the call-in for this item as the Investment Board must be subject to scrutiny and accountability. Councillor Miscandlon acknowledged Councillor Boden and officer’s transparency and openness in this matter.

Councillor Booth asked that consideration is given to his recommendations being included in the governance framework for the Investment Board. He added that the terms of reference need amending to reflect auditing arrangements and statutory reporting of accounts. Councillor Boden explained that the terms of reference reflect the review and monitoring of financial performance.

Councillor Boden thanked members of the Overview and Scrutiny Panel for their comments and feedback.

Proposed by Councillor Booth, seconded by Councillor Mrs Bligh that the Cabinet decision is referred back to Cabinet for reconsideration with comments from the Overview and Scrutiny Panel.

A vote was taken on this proposal. The vote failed.

Proposed by Councillor Miscandlon, seconded by Councillor Hay and decided that the Overview and Scrutiny Panel accept the Cabinet decision.