Issue - meetings

Wholly Owned Investment Company and Subsidiaries

Meeting: 15/11/2016 - Cabinet (Item 15)

15 Wholly Owned Investment Company and Subsidiaries PDF 208 KB

Cabinet approved Brent’s investment strategy at its meeting of 11 April 2016. This report focuses on how establishing a Wholly Owned Company (WOC) will help deliver the Council’s targets for the development of new affordable homes and why establishing a Company will offer the Council flexibility to intervene strategically to ensure that new housing development can contribute fully to strategic priorities. The report also sets out more broadly the various options for the Council to establish an investment vehicle to be operated as a Wholly Owned Company (WOC).

Additional documents:

Decision:

RESOLVED:-

i. Cabinet approved the establishment of the wholly owned company, to be called “Investing 4 Brent”, for the objects and purposes set out in the report

ii. Cabinet agreed to appoint the following as Directors of the Company, with all the responsibilities under the Companies Act that flow from that:

- Councillor George Crane;

- The Strategic Director of Community Wellbeing (Phil Porter); and

- The Director of Policy, Partnerships and Performance (Peter Gadsdon).

iii. Cabinet noted that the Board of the Company will be chaired by an independent voting Director, and that Martin Smith, the former Chief Executive of Ealing Council is proposed for this role.

iv. Cabinet approved the Articles of Association and Shareholders Agreement as set out at Appendices One and Two.

v. Cabinet approved the company’s initial business plan, which is set out at Appendix Three.

vi. Cabinet authorised the loan facility between the council and the company, as summarised in this report, and authorise the chief finance officer to finalise the legal documentation accordingly and thereafter to authorise loans on the terms set out in this report.

vii. Cabinet delegated to the deputy Leader, in consultation with the Chief Finance Officer, the precise mix of loan and equity funding, for the reasons set out in paragraph 6.8.

viii. Cabinet approved the provision of an initial loan of £1m to meet the working capital (cash flow) requirements of the company on terms as summarised in this report and delegate authority to the Chief Finance Officer to finalise the legal documentation accordingly.

ix. Cabinet noted that the company is intended to be incorporated by the end of the calendar year, and as soon as practicably possible following expiry of the scrutiny call-in period.

x. Cabinet delegated to the deputy leader, in consultation with the chief finance officer, authority to finalise the Articles of Association and other legal documentation required formally to incorporate the Company in accordance with the requirements of the Companies Act 1985.

Minutes:

Councillor John Warren, Brondesbury Park Ward, expressed concern about the monitoring arrangements in place. he expressed reservation at the appointment of Councillor Crane to the Board.

Conrad Hall, Chief Finance Officer, outlined the monitoring arrangements in place.

Councillor Margaret McLennan, Deputy Leader, reminded Members that Cabinet had approved Brent’s investment strategy at its meeting on 11 April 2016.

This strategy was designed to set the framework through which the capital programme will help to deliver the council’s long-term vision to “make Brent a great place to live and work…” and to help deliver the five Brent 2020 priorities.

She stated that the Strategy explicitly signalled a shift away from short-term solutions to long-term public investment, and envisaged a council embracing more innovative and agile corporate structures to enable a more enterprising culture focused on seizing opportunities and managing rather than eliminating risks.

One action was to establish a local authority controlled company, originally envisaged to enable speedy delivery of the temporary accommodation reform plan. Councillor McLennan stated that the report therefore includes a focus on how the WOC will help deliver the Council’s targets for the development of new affordable homes and why establishing a Company will offer the Council flexibility to intervene strategically to ensure that new housing development can contribute fully to strategic priorities.