Agenda item

The SGM Capital Programmes introduced the report, and informed Panel Members that the Catford Regeneration Partnership Limited (CRPL) received  an overall limited assurance. It was noted that although this rating was negative, it was better than no-assurance. Panel Members noted that serious control issues were raised in the recommendations.

The Audit Panel noted specific areas that were identified for improvement. The Chair asked who was on the Programme Board, and what their responsibilities were. It was noted that officers were on the Programme Board and they were responsible for the overall Catford Regeneration, whilst CRPL was only set up for development of the Catford Shopping Centre.

The Chair said he was concerned that there was no documented financial regulations for CRPL, and was told that the company had inherited those of the Council. It was noted that although there were no written procedures, they had now been done. The Chair asked for these to be circulated to Panel Members.

Action >>>>>> Head of Financial Services

Panel Members were informed that the recommendation on Directorship had been brought to light by the Overview and Scrutiny Business Panel, and agreed by Council some time ago. The Head of Law said unfortunately there had not been a Constitution Working Party (CWP) meeting that year to action Council’s recommendation. She said the CWP only met for the first time after the Council’s decision two weeks ago but the agenda was tight, and they were looking at a fundamental part of the constitution. The Chair said the CWP could have met earlier, but did not.

The Head of Law said the Council was currently having a democracy review, and as there had not been any further consideration of the constitution since the last administration it was likely that the whole constitution would be reviewed. The Chair said he was not convinced this would be addressed, as there had not been any mention of previous referrals on this issue. The Head of Law responded that it would be on the agenda of the next CWP meeting. The Head of Law added that she had previously circulated the rationale for the 2 Directors, but she was happy to do a report for the next CWP meeting.

Action >>>>>> Head of Law

The Chair commented that he was very concerned about this issue as a senior officer could be the one making a very important decision, if a third person is not appointed. He said conflicts of interest should be avoided. The Chair said the Panel had suggested that a Memorandum of Understanding would be useful for the Partnership, and it was yet to be done. He asked if there was a mechanism to charge for officers time, and was told the Council charges CRPL for officers time.

The Chair asked whether a risk analysis had been done on the debt of the company. It was noted that the Company’s current asset base was valued at approximately £15m with a liability, mainly in the form of loans from LBL, of approximately £12m. The Head of Financial Services said he was aware that there was a risk around income, but the number of properties would bring proper income stream. Stephen Warren asked whether officers had done a scenario analysis, especially if there was a no deal Brexit. The Chief Financial Officer said they were looking at long term investments, whereas Brexit was short-term.

Ian Pleace asked officers to send Panel members the Company’s accounts. He stated that the company was a separate entity and operated in a smaller volume than the Council as a whole. He said if officers were just relying on Council’s regulations they would be missing some nuances. The Head of Financial Services said the company operates differently. Mr Pleace said it was not appropriate for the Council’s financial regulations to be adopted. The Head of Financial Services said they have done one for the company.

Action >>>>>> Head of Financial Services

The Chair said he has some concerns and would like an independent investigation done on the activities of the company. Councillor Ingleby suggested that the Public Accounts Select Committee look into the operation of the company. The Head of Law said that this investigation was beyond the specific Terms of Reference of the Audit Panel.

Councillor Rathbone said he firmly agreed with the Vice Chair, Councillor Ingleby that this matter should be referred to the Public Accounts Select Committee, to save Panel Members a lot of time discussing an item which was beyond the remit of the Audit Panel. It was agreed that the Audit Panel would recommend that the Public Accounts Select Committee look into the operation of the Catford Regeneration Partnership Limited.

RESOLVBED that

i.              the report be noted.

ii.            the Public Accounts Select Committee be requested to look into the operation of the Catford Regeneration Partnership Limited.