HEREFORD Futures has a week of “real” life left.
Herefordshire Council is ready to close the "arm’s length" company down and take on its remaining projects – including Hereford’s proposed urban village.
The council’s cabinet is expected to back both the shutdown and project transfer when it meets next Thursday.
Members are being asked to delegate authority to the council’s Director for Economy, Communities and Corporate - in consultation with the Solicitor to the Council - to finalise and sign off the transfer.
The case put to cabinet allows for no alternative, with members warned that a rejection of the transfer would leave the council at risk of returning assets - or their equivalent value - in line with the terms of the joint venture agreement that set Hereford Futures up and reduce the council’s regulation of the project.
With Hereford Futures shut down there will be a number of outstanding obligations which will need to be continued to ensure the operation of projects crucial to the council’s corporate plan.
There will also be ongoing financial and legal implications to continuing with the projects that need to be managed and brought back to cabinet, or cabinet members, as and when related decisions are required.
Last month, the Hereford Times reported that the council has paid out nearly £3m in financial support to Hereford Futures over the past 11 years. Support in the current financial year was shown as £355,322 reducing to £130,628 in 2014-15.
The council, through cabinet, agreed to establish Hereford Futures in 2004 as a company limited by guarantee then called ESG Herefordshire Ltd.
Hereford Futures Ltd (HFL) was guided by the terms of a joint venture agreement (JVA) entered into by the company, the council, and Advantage West Midlands (AWM), the former regional development agency; in 2008.
AWM was succeeded by the Homes & Community Agency (HCA).
Following reductions in the council’s funding agreed as part of the budget savings over the past two years, the HFL board met in February this year to agreed that all members of the company, save the Chairman and Deputy Chairman, would resign on April 25 as the company ceased operations.
Negotiations have taken place between HFL, the HCA, and the council over variations to the JVA to secure the exit of HFL from its responsibilities, and the transfer of HFL functions to the council or other arrangements directed by the council.
These negotiations identified and agreed HFL functions for transfer including the disposal of urban village and other council owned properties.
Other obligations relate to management strategy for the old market development from lettings compliance to car parking charges.
All of the existing obligations placed on Stanhope and British Land as developer and
financier of the old market development will remain unchanged by the transfer.
With the obligations managed and monitored by the council’s property team, approval from Stanhope and British Land is needed to allow the release of obligations relating to the old market project.
In setting up HFL, the council agreed to underwrite any financial liabilities associated with the company pension scheme that may arise on its closure.
Worcestershire County Council, as operator of the Herefordshire Council pension scheme, has indicated that, in their view, there is “unlikely” to be any further pension liability.