Decision details

Agreed:

RECOMMENDED that Council:-

(1)  note the findings of the Local Partnership LLP report presented at the meeting;

(2)  note ECL’s achievements to date;

(3)  that, notwithstanding the recommendation from Local Partnerships to wind down the operations of ECL, officers recommend that the company be retained for the limited purpose of holding and managing property;

(4)  grant delegated authority to the Chief Executive, in consultation with the Leader of the Council to facilitate recommendation no. 3 above to reduce ECL’s activities as follows:

a)    the Council enters into a business sale agreement with ECL, whereby the Council acquires all of ECL’s assets (with the exception of the six leasehold flats in the Guildhall Shopping Centre), including any work in progress in return for proper consideration, in the form of a release of ECL from its obligations under the Loan Agreements. The sale agreement shall include a novation of all contracts save those that may be terminated by ECL with the Council’s agreement;

b)    in the likely event that the value of the assets to be acquired from ECL is not sufficient to repay the loan to the Council, then delegated authority be granted to the Chief Executive, in consultation with the Leader and Section 151 officer, to write off any shortfall; and

c)    thereafter, ECL, in a much reduced capacity shall continue for the purpose of holding and managing property and, in particular, the 6 Guildhall flats.

(5)  agree that any staff implications are dealt with in accordance with its Organisational Change Policy;

(6)  extend the ECL appointments of the Interim Managing Director and the two non-Executive Directors until such time as they are no longer required to assist with the reduction of the company’s activities, with the termination of those appointments delegated to the Chief Executive;

(7)  grant delegated authority to the Service Lead - Legal Services to amend the Management Agreement to reflect the changes to the remit of ECL;

(8)  agree that SMB reflect on the Local Partnerships report as well as work being undertaken by the District Councils Network on commercial companies owned by local authorities to produce a report in due course setting out principles for how the Council will enter into any commercial ventures in the future;

(9)  agree that the Chief Executive be tasked to liaise with One Public Estate to negotiate an amendment to the grant conditions with the aim of retaining the Brownfield Land Release Funding (BLRF) funding where possible; and

(10)      agree to receive a report, if necessary, setting out a site disposal strategy in the likely event of a shortfall on the ECL loan after the Council acquires ECL’s assets.

Reason for Decision: As set out in the report.