Agenda item

The Committee received a presentation by the Director of Legal and Democratic Services which gave an overview of the company governance arrangements for Durham County Council which included a brief overview of the companies, an oversight of the company governance arrangements, the historic arrangements and the roles and responsibilities (for copy see file of minutes).

Councillor A Watson asked if these companies generated income for the Council and if they were audited.

The Director of Legal and Democratic Services responded that there was a drive by Local Authorities to establish companies in 2010 in response to government funding cuts. The four companies were audited but carried an element of risk if managed ineffectively. The Corporate Director of Resources added that the Council received dividends from the companies and had a budget of £50,000 per annum from these activities, though many of the companies did not issue dividends.

Mr I Rudd sought clarification on Durham Villages Regeneration Limited as it had received a compulsory strike-off notice which had been discontinued.

The Director of Legal and Democratic Services explained that the company constructed domestic buildings but had been dormant for a while as the sites for development had been exhausted. Keepmoat undertakes the company secretary role for the company and had filed the required information with companies house. .  The company’s future would be discussed at the Shareholder Working Group.

Mr I Rudd asked why each company had adopted the policy to produce accounts for small companies that gave no information as to what they did.

P Darby replied that the policy had been adopted purely on cost efficiency purposes.  The annual accounts were accompanied by Annual Reports prepared by each company and there was nothing preventing the reports being published on the Council’s website for further transparency. Members asked that this be done.

Mr C Robinson queried whether these companies aligned to the values and interests of the Council and if staff were employees of the Council.

The Director of Legal and Democratic Services confirmed that staff worked for the Council and were seconded to each company under the local authority’s terms and conditions and indemnity.

P Darby added that service level agreements were in place to effectively buy staff time from the Council to support the activities of the company, none of the companies directly employed staff. In response to a query from Mr C Robinson he replied that there were external contractors procured to build houses for those companies that were set up for that purpose and that the councils inhouse construction team were not engaged in those activities.

Mr C Robinson asked if the Council had any investment interests in the airport.

P Darby confirmed that the Council were shareholders in Newcastle Airport along with the other six local authorities that made up the North East Combined Authority.

Resolved:

i)               That the presentation be noted.

ii)             That the Director of Legal and Democratic Services consider how to facilitate the publication of company reports to ensure openness and transparency in relation to the council’s company activity.