Agenda item

To consider a report setting out the proposed structure and mandate for creating a new wholly-owned Council company – Cheshire East Ltd; and to seek approval for the governance structures under which the group will operate.

In February 2013 the Council had set out its three year plan to becoming a strategic commissioning council to ensure a measured approach in achieving the Councils ambitions alongside the required financial savings.  It also provided a platform to redefine and reinvent services and to sustain quality services to Cheshire East residents and businesses. 

The new approach required robust corporate leadership and a clear focus on identifying and prioritising local needs.  The report now being considered set out the proposed structure and mandate for creating a new wholly owned company – Cheshire East Ltd. to act as a parent company to all others set up by the Council, and the governance structure under which the group would operate.

During a detailed discussion the Cabinet and visiting Councillors made a number of suggestions in order to fine tune the proposals being made.  Members were, however, satisfied that the proposed arrangements were robust, clear, gave a cohesive view of the relationships between the parties involved, and that the opportunities for regular review and assessment would allow arrangements to be adjusted in the light of experience.  Clarification was given of the way in which the views of the public and service users would be fed back and assessed.

With reference to the involvement of scrutiny in the assessment and review of the new companies it was confirmed that a report on the Councils arrangements was due to be considered by the Constitution Committee in the near future. 

In respect of the ASDV’s, it was reported that arrangements were already in hand for an all member briefing.   

In considering the diagram which had been appended to the report, showing the ASDV reporting lines, a number of minor changes were reported; an up to date version of the diagram has now been added to the website.

It was noted that arrangements relating to the Council’s strategic contract with the Engine of the North would be considered at a meeting of the Cabinet in April. 

RESOLVED

1.  That approval be given to:

i.      The establishment of the wholly owned local authority parent company Cheshire East Ltd.

ii.    The general principles of governance of the parent company and its subsidiaries and operation as set out in thereport.  This includes the            appointment of the Deputy Leader as a non-executive director to act as Chairman of the Group Board.

iii.   The re-organisation of the Council’s existing companies as subsidiaries of Cheshire East Ltd. Cheshire East Ltd will hold 80% of the shares in its subsidiaries with the Council holding the remaining 20%.

iv.   That each subsidiary apply to the government to be recognised under the Redundancy Payments Modification Order (RPMO). This will protect the continuous service for employees who transfer under TUPE and those who are appointed in future from another RPMO body.

v.    A 1 April implementation date for Cheshire East Limited, Ansa and Orbitas.  Beyond that date the Council will continue to review and refine the contract documentation - together with the governance arrangements set out in the report - for all its companies.

vi. That the appointment of Kevin Melling as the Managing Director for ANSA and Orbitas be noted.

2.  In addition to the specific recommendation, that approval be given to the general approach laid in the report and that authorisation be given to:

i.     The Chief Operating Officer as Section 151 Officer to take any necessary and consequential action arising from the above recommendations, in agreement with the Leader of the Council.

ii.    That the Head of Legal Services and Monitoring Officer to enter into any necessary documentation to give effect to the above recommendations  including the:

-     articles of association;

-     the shareholder agreement and mandate for the shareholder’s representative; and

-     Directors’ mandate for each company.