Herefordshire Council in talks over taking on the liabilities of Hereford Futures

Talks are underway regarding Hereford Futures Ltd.

Talks are underway regarding Hereford Futures Ltd.

First published in News
Last updated
Ledbury Reporter: Photograph of the Author by , Reporter

TALKS are underway between Herefordshire Council and the Homes and Communities Agency (HCA) over the extent to which the council can take on the liabilities of Hereford Futures Ltd (HFL).

Confirmation of the talks comes in papers prepared for a meeting of the council’s overview and scrutiny committee on Monday (March 10).

The report of the HFL directors’ for the year ending March 31 2013 states that the company has net liabilities as at that date.

In April  last year the company was told it would cease its operations, which would be transferred to Herefordshire Council, and ultimately would be wound up.

However, HFL did receive confirmation from  the council that “sufficient funding” would be made available to the company to enable it to fulfil its  obligations and to pay liabilities as they fell due.

The scrutiny papers confirm that on May 30 last year the council’s then Chief Finance Officer (CFO)  wrote to the  directors of HFL to confirm the council’s funding commitment to the company.

In this letter it was recorded that the council had requested HFL to continue to trade in  accordance with agreed business plan priorities and then wind down.

In consideration of  HFL directors agreeing to this request, it was also confirmed that the council would  provide funding of a maximum value of £695k in a combination of revenue and capital - by way of non-repayable  grant - during the financial years 2013-14 and 2014-15.

The letter went on to record  that HFL was intending to operate in a financial envelope of £485,950 and that  £695,000 was to be the maximum sum that would be made available to HFL to enable the directors
to “discharge in full the liabilities of the company as they fall due” and repay all remaining liabilities together with costs and expenses associated  with the  wind down.

An appendix to the scrutiny report shows council funding of £355,322 in 2013-14; and £130,628 in 2014-15  and rental income contributions estimated at £95,600 for 2013-14: a total of £581,550.

The difference between this and the maximum sum of £695k referred to in the then CFO’s letter is £113,450 that the council says relates to an “available funding resource” that  can be accessed following agreement to a “funded business case” submission.

Presently, council officers are in talks with the HCA and HFL about the extent to which the council may take on any HFL liabilities in the future.

However, the report confirms that, other than the May 2013 letter from the then CFO, no assurances or commitments have been given by council officers.

As such, the issue will be reported to the council’s cabinet for a decision in the coming months.

The council concedes that it is “probably reasonable to infer” from the directors’ report for 2013 that, at  the date the report was approved by the HFL Board,  the directors considered the council’s financial commitments in the May 2013 letter to be sufficient to cover the company’s then known liabilities.

Council officers have “not subsequently been advised differently” the report says.
 

Comments (6)

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3:18pm Thu 6 Mar 14

dippyhippy says...

These are huge sums of money, by anybody's standards.

What exactly have we got to show for it........???

Or am I missing something.
These are huge sums of money, by anybody's standards. What exactly have we got to show for it........??? Or am I missing something. dippyhippy
  • Score: 8

6:46pm Thu 6 Mar 14

TwoWheelsGood says...

Why is £695k of public money needed to wind down a private company that has no staff, no office and is registered at a private address in Ledbury? If it is to cease trading in May of this year (as we have been told), why does it need 'non-repayable' grants in the following financial year? When will someone in charge stand up and say enough is enough?
Why is £695k of public money needed to wind down a private company that has no staff, no office and is registered at a private address in Ledbury? If it is to cease trading in May of this year (as we have been told), why does it need 'non-repayable' grants in the following financial year? When will someone in charge stand up and say enough is enough? TwoWheelsGood
  • Score: 5

8:37pm Thu 6 Mar 14

Hereford person says...

The Ombudsman must be brought in to discover what has been going on behind closed doors.
Perhaps our MPs can ask questions in the House or their Councillors.
The Ombudsman must be brought in to discover what has been going on behind closed doors. Perhaps our MPs can ask questions in the House or their Councillors. Hereford person
  • Score: 8

9:13pm Thu 6 Mar 14

makeithappen says...

The following was a response to an FOI request to Herefordshire Council

It has been stated in the public domain that a number of officers, previously part of Hereford Futures, are still in receipt of salaries /payments from Herefordshire Council, for example Jonathan Bretherton. Please confirm any payments still being paid to Herefordshire Fitures or any of their officers and the total amounts.

The total amount available to Hereford Futures from 2013/2014 and 2014/2015 are

£153,000 funded from Herefordshire Council annual Budget (2013/2014 only)

£211,000 funded from surplus rental income from properties purchased using Advantage West Midlands grant founding

£331,000 funded through the Council Capital Program supporting investment in Hereford City regeneration

Whilst all of the above funding is available to Hereford Futures only part of this will be used to meet its obligations to its staff, the balance being used for operation costs and to fund delivery of project work.
The following was a response to an FOI request to Herefordshire Council It has been stated in the public domain that a number of officers, previously part of Hereford Futures, are still in receipt of salaries /payments from Herefordshire Council, for example Jonathan Bretherton. Please confirm any payments still being paid to Herefordshire Fitures or any of their officers and the total amounts. The total amount available to Hereford Futures from 2013/2014 and 2014/2015 are £153,000 funded from Herefordshire Council annual Budget (2013/2014 only) £211,000 funded from surplus rental income from properties purchased using Advantage West Midlands grant founding £331,000 funded through the Council Capital Program supporting investment in Hereford City regeneration Whilst all of the above funding is available to Hereford Futures only part of this will be used to meet its obligations to its staff, the balance being used for operation costs and to fund delivery of project work. makeithappen
  • Score: 1

7:14pm Fri 7 Mar 14

saidflo says...

Amazing amount of money and no clear explanation of what we in Herefordshire have to show for it. A select few know exactly what is going on here but as they possibly have a vested (am guessing financial) interest in keeping it secret then the rest of us have to wait and see for as long as it takes.
I wonder how many fat salaries are still being paid?
I also wonder why it costs the council tax payer anything at all to wind down this Private company?
And why precisely £485,950 to a maximum of £695,000 to wind down this Private company?
Does "To cover the company's then known liabilities" translate into "Continue to pay the Director's salaries"?
I suspect it may.
Amazing amount of money and no clear explanation of what we in Herefordshire have to show for it. A select few know exactly what is going on here but as they possibly have a vested (am guessing financial) interest in keeping it secret then the rest of us have to wait and see for as long as it takes. I wonder how many fat salaries are still being paid? I also wonder why it costs the council tax payer anything at all to wind down this Private company? And why precisely £485,950 to a maximum of £695,000 to wind down this Private company? Does "To cover the company's then known liabilities" translate into "Continue to pay the Director's salaries"? I suspect it may. saidflo
  • Score: 2

12:59pm Sun 9 Mar 14

Hereford person says...

So after we the tax payer paid £2,891,550 into this Quango and £44,000 in pension fees we now have to pay more to end this outfit. Let's have some names of those who set up this semi secret organisation, apparently the public can't even see the minutes of their meeting although I realise there are financial dealing that have to be confidential while they are taking place.
So after we the tax payer paid £2,891,550 into this Quango and £44,000 in pension fees we now have to pay more to end this outfit. Let's have some names of those who set up this semi secret organisation, apparently the public can't even see the minutes of their meeting although I realise there are financial dealing that have to be confidential while they are taking place. Hereford person
  • Score: 3

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