Herefordshire Council scrutiny committee draws a line under Hereford Futures

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

HEREFORDSHIRE Council’s overview and scrutiny committee will not be making any further investigations into Hereford Futures.

Committee chairman Councillor Alan Seldon said a line had now  been drawn over issues around the “arm’s length” company.

A tacit acceptance at this morning’s scrutiny meeting that things “could have been done better”  over the company’s creation and operation meant there was no further part for scrutiny to play, said Coun Seldon.

 

The acceptance – in relation to transparency over the use of public money and the involvement of councillors on the Hereford Futures board – came from councillors John Jarvis and Adrian Blackshaw, both of whom had significant roles in relation to the company.

“We are now a lot further forward over the governance of arm’s length companies in future,” said Coun Seldon.

 

That future, the meeting resolved, would give the council’s audit and co-operate governance committee a greater say over “arm’s length” companies.

Scrutiny, said Coun Seldon, would now turn its attention to a joint task and project examining the workings of the Marches Local Enterprise Board.

In that, he said, Herefordshire Council would work with Shropshire Council and Telford & Wrekin Council.

This week the Hereford Times confirmed that Herefordshire Council has paid out nearly £3m in financial support to Hereford Futures Ltd (HFL) over the past 11 years and was now in talks about taking on the liabilities of the company that it wound up in April last year.

For more see Herefordtimes.com and this week’s Hereford Times.

Comments (12)

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6:28pm Mon 10 Mar 14

bobby47 says...

So they wish to draw a line under this do they? For years we've all been ranting and raving over this unholy arrangement and now, having decided that things were not done properly, they'll draw a line under it, move on and address other areas that merit their attention.
Well that ain't good enough for me. Not by a long shot. It'll take more than this to satisfy me and my need to know what a they've been up to. Someone, within this chain of cunning and guile has used their position to obtain a pecuniary advantage for themselves or another and Im going to do all I can to bring this unsatisfactory situation to the attention of an investigative agent who'll have more clout than us and be able to decide whether or not their is a prima facia case of Criminal Deception.
How can you draw a line under this? This is the problem when people first set out to deceive. Others, many of them good and honest people get dragged in to the secret and before you know it, 'Cover Up'. Well there's more mileage in this than the hierarchy of the Council would like you to think and this issue is not going to be swept under the carpet. Not while I've got medication in the cupboard and a nose to smell a rat!
So they wish to draw a line under this do they? For years we've all been ranting and raving over this unholy arrangement and now, having decided that things were not done properly, they'll draw a line under it, move on and address other areas that merit their attention. Well that ain't good enough for me. Not by a long shot. It'll take more than this to satisfy me and my need to know what a they've been up to. Someone, within this chain of cunning and guile has used their position to obtain a pecuniary advantage for themselves or another and Im going to do all I can to bring this unsatisfactory situation to the attention of an investigative agent who'll have more clout than us and be able to decide whether or not their is a prima facia case of Criminal Deception. How can you draw a line under this? This is the problem when people first set out to deceive. Others, many of them good and honest people get dragged in to the secret and before you know it, 'Cover Up'. Well there's more mileage in this than the hierarchy of the Council would like you to think and this issue is not going to be swept under the carpet. Not while I've got medication in the cupboard and a nose to smell a rat! bobby47
  • Score: 23

9:45pm Mon 10 Mar 14

TwoWheelsGood says...

What a disgrace - clearly the overview and scrutiny committee is completely spineless. We need an independent public enquiry into this - the Crookall Report exposed a mass of corruption and mismanagement in this Council and most people are not convinced that anything has changed since then. The only thing that has changed is that the perpetrators have made the audit much harder to follow by setting up a private company which is shortly to be wound up.
What a disgrace - clearly the overview and scrutiny committee is completely spineless. We need an independent public enquiry into this - the Crookall Report exposed a mass of corruption and mismanagement in this Council and most people are not convinced that anything has changed since then. The only thing that has changed is that the perpetrators have made the audit much harder to follow by setting up a private company which is shortly to be wound up. TwoWheelsGood
  • Score: 10

12:25pm Tue 11 Mar 14

Herefordian07 says...

I think Jesse Norman MP should be asking questions in the house, after all this is his twenty.
I think Jesse Norman MP should be asking questions in the house, after all this is his twenty. Herefordian07
  • Score: 2

10:39pm Tue 11 Mar 14

Hereford person says...

Perhaps this committee should have a look at the £2.6 million that is being spent on the Shirehall and is rumored, wait for it folks, over budget.
Perhaps this committee should have a look at the £2.6 million that is being spent on the Shirehall and is rumored, wait for it folks, over budget. Hereford person
  • Score: 4

9:45am Fri 14 Mar 14

littlewhitebull says...

I was always told my my father and teachers that when you have a problem you must seek for the best solution. If there is a problem, however difficult it might appear, there must be a solution. You merely have to address your mind to possible solutions and don't give up.
The council has a problem - that is seemingly obvious - but they are not looking for any solution. Instead, they are sweeping their problem under the carpet in the hope that it will go away, if nobody addresses it.
Sad to say, that our council could probably fill the county's road potholes with the problems they fail to face.
Still, what do I know - I am but a humble tax payer who must bow to the authorities who pay so much for higher intellectual powers.
I was always told my my father and teachers that when you have a problem you must seek for the best solution. If there is a problem, however difficult it might appear, there must be a solution. You merely have to address your mind to possible solutions and don't give up. The council has a problem - that is seemingly obvious - but they are not looking for any solution. Instead, they are sweeping their problem under the carpet in the hope that it will go away, if nobody addresses it. Sad to say, that our council could probably fill the county's road potholes with the problems they fail to face. Still, what do I know - I am but a humble tax payer who must bow to the authorities who pay so much for higher intellectual powers. littlewhitebull
  • Score: 2

10:29pm Fri 14 Mar 14

Cllr Liz Harvey says...

The excellent leader in this week's HT sums up the nasty situation we are faced with quite nicely. We have a company which has been set up expressly to implement council policy on economic development, which has been funded pretty much entirely with public money since its creation.

This company's articles of association stipulate that only people holding specific roles on the council should be members and directors, and that those people should only hold office in the company for as long as they sit in those positions on the council. Their positions in the company are without salary.

However, scrutiny is told that for as long as these people hold positions in HF it is their duty to act in the interests of the company over their duty to act in the interests of the council which pays them a wage or an allowance and which is the only body to task HF to do anything that it does.

The current Chief Executive of the council refused to take up his designated position on the HF board when he joined the council. The current council leader resigned his position on the board in January.

Despite HF having been funded solely by public money, it is not obliged to make public the minutes of its board meetings. No minutes are available to scrutiny or to councillors and we are told that none are held by current or previous council leaders so they are beyond the reach of FOI requests.

In January last year in answer to a written question from Cllr Anthony Powers, we were assured by Cllr Phillips that Hereford Futures would be publishing all its board minutes from now on - this has not happened. The HF website contains no minutes from that date forward, and it is difficult to imagine that the company could have spent a further £355k of council money in 2013-14 without the board having met at any point throughout the year.

We are told that in May 2013 the current Chief Executive guaranteed that no more than £695k of funding would be provided by the council to HF to complete its projects and wind-up the company. On Monday we were told that directors estimate that the company has no more than £525k of outstanding liabilities.

We have an ugly retail development on the cattle market site which some people think is a good idea. We have a flood alleviation scheme which works some of the time. We have some planning permissions outlined for a link road which will see yet more businesses in the city bull-dozed to deliver, and the council has failed to get government funding to build the road so we shall be paying for it from our council tax for the next 30 years.

Some of us battled long and hard to have a different outcome, but that's all history now. The 'deals' are done, the borrowing sewn up, the tenants poached, the compulsory purchase orders drafted. We can't turn the clock back on any of this - but we can do our very best to see that the mistakes, which are starting to be admitted were made, don't get repeated and that lessons are learned for the future.

While HF is being wound-up we must keep cool heads and make sure that, as the Local Enterprise Partnership (LEP) rears up out of the Marches ooze, we don't see shadows of HF reflected in its shiny Skylon scales.

Audit and Governance have been asked by scrutiny to capture the lessons during the HF wind-up (?!?!) and Herefordshire council's scrutiny committee will be doing a joint piece of work with Shropshire, Telford and the Wrekin councils' scrutiny committees to ensure the governance and public accountability of the LEP is all that it should be.

Clearly the HF episode is frustrating - and we all feel that many things are still left unsaid ... but please be assured that the lose ends are being brought together, questions are still to be answered on some key issues and we are determined to ensure we all do better next time. Whoever is in charge.
The excellent leader in this week's HT sums up the nasty situation we are faced with quite nicely. We have a company which has been set up expressly to implement council policy on economic development, which has been funded pretty much entirely with public money since its creation. This company's articles of association stipulate that only people holding specific roles on the council should be members and directors, and that those people should only hold office in the company for as long as they sit in those positions on the council. Their positions in the company are without salary. However, scrutiny is told that for as long as these people hold positions in HF it is their duty to act in the interests of the company over their duty to act in the interests of the council which pays them a wage or an allowance and which is the only body to task HF to do anything that it does. The current Chief Executive of the council refused to take up his designated position on the HF board when he joined the council. The current council leader resigned his position on the board in January. Despite HF having been funded solely by public money, it is not obliged to make public the minutes of its board meetings. No minutes are available to scrutiny or to councillors and we are told that none are held by current or previous council leaders so they are beyond the reach of FOI requests. In January last year in answer to a written question from Cllr Anthony Powers, we were assured by Cllr Phillips that Hereford Futures would be publishing all its board minutes from now on - this has not happened. The HF website contains no minutes from that date forward, and it is difficult to imagine that the company could have spent a further £355k of council money in 2013-14 without the board having met at any point throughout the year. We are told that in May 2013 the current Chief Executive guaranteed that no more than £695k of funding would be provided by the council to HF to complete its projects and wind-up the company. On Monday we were told that directors estimate that the company has no more than £525k of outstanding liabilities. We have an ugly retail development on the cattle market site which some people think is a good idea. We have a flood alleviation scheme which works some of the time. We have some planning permissions outlined for a link road which will see yet more businesses in the city bull-dozed to deliver, and the council has failed to get government funding to build the road so we shall be paying for it from our council tax for the next 30 years. Some of us battled long and hard to have a different outcome, but that's all history now. The 'deals' are done, the borrowing sewn up, the tenants poached, the compulsory purchase orders drafted. We can't turn the clock back on any of this - but we can do our very best to see that the mistakes, which are starting to be admitted were made, don't get repeated and that lessons are learned for the future. While HF is being wound-up we must keep cool heads and make sure that, as the Local Enterprise Partnership (LEP) rears up out of the Marches ooze, we don't see shadows of HF reflected in its shiny Skylon scales. Audit and Governance have been asked by scrutiny to capture the lessons during the HF wind-up (?!?!) and Herefordshire council's scrutiny committee will be doing a joint piece of work with Shropshire, Telford and the Wrekin councils' scrutiny committees to ensure the governance and public accountability of the LEP is all that it should be. Clearly the HF episode is frustrating - and we all feel that many things are still left unsaid ... but please be assured that the lose ends are being brought together, questions are still to be answered on some key issues and we are determined to ensure we all do better next time. Whoever is in charge. Cllr Liz Harvey
  • Score: 3

3:46pm Mon 17 Mar 14

OPtymystic says...

Cllr Harvey.

Irrespective of the advice to you, was Hereford Futures a regulated company under the Local Authority (Compannies) Order 1995? If not, why not? If so, has it complied with its obligations under that order in full?
Cllr Harvey. Irrespective of the advice to you, was Hereford Futures a regulated company under the Local Authority (Compannies) Order 1995? If not, why not? If so, has it complied with its obligations under that order in full? OPtymystic
  • Score: 3

6:58pm Mon 17 Mar 14

Cllr Liz Harvey says...

OPtymystic - Difficult to answer your question 'irrespective of the advice' received ... however, it is not my understanding that HF was set up under the order you reference.

I am not an expert, but looking at the order online, it appears to be aimed at councils which have been judged to be 'best value authorities' in relation to the function concerned.

If I understand it correctly, HF was set up to enable the council to access business expertise which it DID NOT itself already own/provide in order to undertake the many successful projects which we are told HF went on to deliver.

It is not my understanding that HF made any profits through its trading - it was a commissioning and consultancy entity which received money from AWM & HC and spent some of it paying its running costs and staff salaries, and the rest passed through it like a pipe to the companies delivering the contracts raised by HF for local projects. Some project costs were also paid directly by HC.

Not sure that gives you the answer you were looking for, but that's to the best of my understanding. However, I may be wrong.
OPtymystic - Difficult to answer your question 'irrespective of the advice' received ... however, it is not my understanding that HF was set up under the order you reference. I am not an expert, but looking at the order online, it appears to be aimed at councils which have been judged to be 'best value authorities' in relation to the function concerned. If I understand it correctly, HF was set up to enable the council to access business expertise which it DID NOT itself already own/provide in order to undertake the many successful projects which we are told HF went on to deliver. It is not my understanding that HF made any profits through its trading - it was a commissioning and consultancy entity which received money from AWM & HC and spent some of it paying its running costs and staff salaries, and the rest passed through it like a pipe to the companies delivering the contracts raised by HF for local projects. Some project costs were also paid directly by HC. Not sure that gives you the answer you were looking for, but that's to the best of my understanding. However, I may be wrong. Cllr Liz Harvey
  • Score: 3

8:50pm Mon 17 Mar 14

OPtymystic says...

Cllr Harvey.

To the best of my knowledge the Local Government and Housing Act 1989 is still the law of the land. It is the statute under which the Local Authority (Companies) Order 1995 was issued. The purpose of that order was to regulate all companies "influenced" by local authorities. The intentions and purposes of the council have no bearing whatsoever on whether or not the law applies. On the face of it Hereford Futures should have been regulated by that order, which does prescribe levels of disclosure.
Cllr Harvey. To the best of my knowledge the Local Government and Housing Act 1989 is still the law of the land. It is the statute under which the Local Authority (Companies) Order 1995 was issued. The purpose of that order was to regulate all companies "influenced" by local authorities. The intentions and purposes of the council have no bearing whatsoever on whether or not the law applies. On the face of it Hereford Futures should have been regulated by that order, which does prescribe levels of disclosure. OPtymystic
  • Score: 5

11:44pm Tue 18 Mar 14

Cllr Liz Harvey says...

Sorry OPtymystic - I've had a quick look at this and can't see where the Act applies to HF as an 'arms length' company limited by guarantee. If you think there's something in it - can you help me out and quote me a reference please. Sorry to seem a bit slow on this one.
Sorry OPtymystic - I've had a quick look at this and can't see where the Act applies to HF as an 'arms length' company limited by guarantee. If you think there's something in it - can you help me out and quote me a reference please. Sorry to seem a bit slow on this one. Cllr Liz Harvey
  • Score: 3

9:00am Wed 19 Mar 14

OPtymystic says...

Cllr Harvey

Robbing a bank is against the law. If I create an 'arms length' company to rob a bank, that does not make it legal. The mere fact of creating a company to evade scrutiny does not of itself avoid scrutiny. See how quickly we slip into legalese.

Under the 1989 Local Government and Housing Act an "influenced" company, must among other things "provide to a member of a relevant authority such information about the affairs of the company as the member reasonably requires for the proper discharge of his duties." Those might include the duties of the scrutiny committee.

Does the 1989 Act still apply? Did the 1989 act apply to Hereford Futures? If so, did Hereford Futures comply with its obligations under the act?
Cllr Harvey Robbing a bank is against the law. If I create an 'arms length' company to rob a bank, that does not make it legal. The mere fact of creating a company to evade scrutiny does not of itself avoid scrutiny. See how quickly we slip into legalese. Under the 1989 Local Government and Housing Act an "influenced" company, must among other things "provide to a member of a relevant authority such information about the affairs of the company as the member reasonably requires for the proper discharge of his duties." Those might include the duties of the scrutiny committee. Does the 1989 Act still apply? Did the 1989 act apply to Hereford Futures? If so, did Hereford Futures comply with its obligations under the act? OPtymystic
  • Score: 5

10:55am Wed 19 Mar 14

Herefordian07 says...

Cllr Harvey and OPtymystic marvellous postings from both of you, however, I have had concerns about the "Closeness" of HF and the council officials for many years and it seems my fears have been warranted by this sweeping the problem under the carpet attitude unfolding before us now, and yet they still appear to be above it all and untouchable, as I have said before in previous postings, they are so slippery that if they fell into a pit of vipers it would be the snakes that perished.
Cllr Harvey and OPtymystic marvellous postings from both of you, however, I have had concerns about the "Closeness" of HF and the council officials for many years and it seems my fears have been warranted by this sweeping the problem under the carpet attitude unfolding before us now, and yet they still appear to be above it all and untouchable, as I have said before in previous postings, they are so slippery that if they fell into a pit of vipers it would be the snakes that perished. Herefordian07
  • Score: 2

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