Agenda and draft minutes

Shareholder Board
Tuesday, 2nd April, 2019 8.00 pm

Venue: Room 1, Civic Centre, Silver Street, Enfield, EN1 3XA. View directions

Items
No. Item

1.

APOLOGIES FOR ABSENCE

Minutes:

There were no apologies for absence.

2.

DECLARATION OF INTEREST

Members of the Shareholder Board are invited to identify any disclosable pecuniary, other pecuniary or non-pecuniary interests relevant to items on the agenda.

Minutes:

There were no declarations of interest in respect of any item listed on the agenda.

 

Councillor Ahmet Oykener (Cabinet Member for Property and Assets) advised Members that he would declare interests as and when necessary in relation to matters arising in relation to Independence and Wellbeing Ltd.

3.

ANNUAL REPORT TO CABINET pdf icon PDF 150 KB

A report from the Director – Commercial is attached.

(Report No.205)

(8.05 – 8.15pm)

Minutes:

Nicky Fiedler (Director - Commercial) introduced Report No.205 presenting the Annual Report to Cabinet.

 

NOTED

 

1.            That the report detailed the Shareholder Board’s work and achievements during the 2018-19 municipal year. The Board was required to provide a report to Cabinet in accordance with the approved terms of reference.

 

2.            The work that had been undertaken by the Shareholder Board in 2018/19 as set out in section 3 of the report. This work in summary had included: agreeing a job description for Councillors acting as company directors; receiving quarterly progress reports from the companies; clarified the position of leases and licences to be granted to trading companies; reviewed and amended the companies’ reserved matters; considered the accounts and business plans of the companies.

 

3.            The forward plan of the Shareholder Board as detailed in section 3 of the report and the proposals for future meetings and governance arrangements.

 

4.            That the Shareholder Board and its terms of reference, as established and previously agreed by Cabinet, currently applied to Council wholly owned companies only. The current arrangements required matters arising from companies that were not wholly owned to be dealt with by Cabinet rather than the Board. It was therefore proposed that a recommendation be made to Cabinet to agree an amendment to the terms of reference of the Shareholder Board to enable the Board to deal with matters arising from all Council companies, including those that were not wholly owned.

 

Alternative Options Considered: None. The Board was required to provide an annual report to Cabinet  

 

DECISION: The Shareholder Board agreed

 

1.            To approve the report to be provided to Cabinet as per the Board’s Terms of Reference.

 

2.            To include a recommendation to Cabinet to agree an amendment to the terms of reference of the Board as set out in paragraph 4 above.

 

Reason: The Board was required to report to Cabinet as specified within the terms of reference.  

(Non key)

 

4.

GROUP TAX RELIEF pdf icon PDF 188 KB

A report from the Director of Finance is attached.

 

Appendix A to the report contains exempt information and is included in the part 2 agenda. 

(Report No.206)

(8.15 – 8.30pm)

 

Minutes:

Matt Bowmer (Interim Director of Finance) introduced the report of the Executive Director – Resources (No.206) setting out how the current company arrangements could be made more tax efficient.

 

NOTED

 

1.            That Minute No.9 below also referred.

 

2.            That Councillor Nesil Caliskan (Leader of the Council) had been consulted on the report.

 

3.            That Officers had sought advice from PWC to explore how the current company arrangements could be made more tax efficient. The advice had covered Group Tax Relief for Corporation Tax, Stamp Duty Land Tax, VAT and Limited Liability Partner structures, as outlined in the report.

 

4.            That the Council could take benefit from Group Tax Relief, as set out in detail in the report. Matt Bowmer (Interim Director of Finance) explained in detail to Members how the tax arrangements could be applied to the companies, and the benefits for both the companies and the Council. This was an ongoing opportunity and could be applied in future years, but the position would need to be reviewed on a year by year basis to ensure that there were no unintended consequences for any of the companies.

 

5.            In response to questions raised, the details set out in Appendix 1 of the report in relation to figures for Profit Before Tax and Taxable Profit were explained. Members noted the detailed work that was continuing, as set out in the report.

 

6.            That there would be no detrimental effects on those companies who had made a profit, their success would not supplement those companies who had made a loss. There would be no impact on the business plans of the companies. The application of group tax relief was explained in detail and assurances provided of the proposals going forward.

 

7.            That the Council and its companies would continue to fully comply with its tax requirements.

 

Alternative Options Considered: NOTED, that there were two key alternative options being: 1. To do nothing and; 2. To put in place a holding company over the four companies as the mechanism to offset profits and losses in the four companies and reduce the overall tax liability as considered in full in the part 2 appendix (Minute No.9 below refers).

 

DECISION: The Shareholder Board agreed to

 

1.            The application of Tax Group Relief to be reviewed annually.

 

2.            Instruct its companies to work with their tax advisers to apply the relief.

 

3.            Instruct a cash payment to be made to the company(ies) giving up their loss.

 

4.            Note the future work on VAT, Stamp Duty Land Tax and Limited Liability Partnerships.

 

Reason: To ensure that the Council’s companies operate in a tax efficient manner.

(Non key)

5.

SHAREHOLDER BOARD WORK PLAN pdf icon PDF 324 KB

A report from the Director – Commercial is attached.

(Report No.207)

(8.30 – 8.35 pm)

Minutes:

Nicky Fiedler (Director - Commercial) introduced Report No.207 identifying the intended items and work for the Shareholder Board during the 2019-20 municipal year.

 

NOTED

 

1.            That Appendix 1 to the report set out the proposed forward plan for 2019/2020 including formal meetings of the Shareholder Board and informal discussions. This would allow the Board to receive more timely information; take an active role in shaping company direction at an early stage; and, foster effective relationships with company directors, as detailed in the report.

 

2.            That an amendment to the Board’s terms of reference in respect of the number of formal meetings held within a municipal year would be required. This would be considered at the next formal meeting of the Board.

 

3.            Members felt that the Board could benefit from further training and development on the detailed work undertaken by the Companies to allow Members to increase their understanding and knowledge of each of the Companies. In response, officers undertook to consider and include appropriate training and development within the work programme for 2019/2020.

 

Alternative Options Considered: None. The Board required a forward plan to maximise its effectiveness.

 

DECISION: The Shareholder Board agreed to approve the proposed work plan.

 

Reason: The forward plan included all known items which the Board would be required to decide during the year, as well as time for the Board to shape and influence the direction of companies and ensure they continue to meet Council priorities.

(Non key)

6.

MINUTES OF PREVIOUS MEETING pdf icon PDF 115 KB

To confirm the minutes of the previous meeting of the Shareholder Board held on 29 January 2019.

Minutes:

AGREED, that the minutes of the previous meeting of the Shareholder Board held on 29 January 2019 be confirmed and signed by the Chair as a correct record.

7.

DATES OF FUTURE MEETINGS

To note that the dates of future meetings of the Shareholder Board will be agreed as part of the Council calendar of meetings for the new municipal year 2019/2020.

Minutes:

NOTED, that the dates of future meetings of the Shareholder Board would be agreed as part of the Council calendar of meetings for the new municipal year 2019/20.

8.

EXCLUSION OF THE PRESS AND PUBLIC

If necessary, to consider passing a resolution under Section 100A(4) of the Local Government Act 1972 excluding the press and public from the meeting for any items moved to part two on the grounds that they involve the likely disclosure of exempt information as defined in those paragraphs of Part 1 of Schedule 12A to the Act (as amended by the Local Government (Access to Information) (Variation) Order 2006).

 

Minutes:

RESOLVED,  in accordance with Section 100(A) of the Local Government Act 1972 to exclude the press and public from the meeting for the item listed on part two of the agenda on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 (information relating to the financial or business affairs of any particular person (including the authority holding that information) of Part 1 of Schedule 12a (as amended by the Local Government (Access to Information) (Variation) Order 2006).

9.

Group Tax Relief

Part 2 Appendix to Group Tax Relief Report (Item 4)

Minutes:

NOTED, Appendix 2 (containing exempt information) in support of Report No.206 – Group Tax Relief as detailed in Minute No.4 above.