I have been asked a lot of questions recently about the Companies that are owed by the Council. The last time we were able to review the companies they were quite seriously in debt with a balance of liabilities over assets. However, there was nothing serious about the situation and it is normal in some circumstances for companies to carry debt on their balance sheets as they reorganise their operations or capital to meet current needs.
The review of Council owned Companies is undertaken by a Committee called the Companies Governance Committee. It is not a legal requirement to have such a committee but it is strongly recommended by both the Government and the professional body for local authority treasurers, CIPFA.
The accounts that we looked at in the last set of review meetings were those of the accounts for the Companies for the financial year which ended on 31st March 2018. So, more than two years of trading have taken place with no more than cursory mentions of the liabilities and assets of the Companies being made on the Council’s annual accounts. It should be remembered that the Council’s accounts had observations made on them about associated investment by our auditors.
Of course, since then the whole of the Council’s finances have been put in jeopardy by COVID. Companies like the Markets and Arena companies have seen huge losses in their revenue and despite trying to find out I have no clear picture of what their trading position is; what their current liabilities are; and when the Council might have to contribute to those companies from our taxpayers to keep the companies afloat.
So, I asked some questions about the situation which frankly don’t leave me any the wiser. I give such answers as I have received below. Our finance spokesperson Cllr Andrew Makinson and I will continue to press for a speedy meeting of the Companies Governance Committee so that we can interrogate the detail of both the accounts up to 31st March 2019 and those for the year which ended in March 2020. I will also press for an up to date statement on the trading positions of those companies from 1st April this year.
Cllr Makinson and I will, of course, keep you informed about any information that we have been able to find out. In the meantime, here are the questions that I have asked and the answers that I have received. We can only hope that Cllr Brant, who is one of the few Labour members who would be able to scrutinise company accounts, will see a way forward to call meetings of the committee to allow it to carry out its work.
Some Questions about the above committee:
- When did it last meet?
May 2019. (But this was only a formal meeting to sign off a report on the year’s activities before the annual meeting of the Council. The last deliberative meeting took place in November 2018.
- Was it reappointed at the 2019 Annual Council meeting?
Yes. As there has been no Annual Meeting of the Council in 2020 the members of the committee has been kept the same as for 2019
- Who is its chair?
Cllr Paul Brant
- Who are its members?
Cllr Andrew Makinson is the Liberal Democrat member with Cllr Richard Kemp as the substitute member.
- Which companies it is it supposed to see?
No reply
- Which committee of the Council has reviewed the annual accounts up to 31 March 2019 of the relevant companies?
No reply
- Is it a legal requirement to have a Companies Governance Committee?
No. It is a recommendation which the Council has accepted.
- If not, why did the Council decide to have one and then not call a meeting of it?
No reply
- When will the accounts of the relevant companies for the year ending 31st March 2020 be ready for review?
No reply
Where will they be reviewed?
It is hoped to call a meeting of the Companies Governance Committee in September 2020
But what does Richard Kemp think? 