The Director of Finance and Business Improvement presented his report updating the Committee on the outcomes of a review of the governance arrangements at Maidstone Property Holdings Ltd.  It was noted that:

·  In September 2016, the Council incorporated a wholly owned company limited by shares called Maidstone Property Holdings Ltd (the Company).  The Company was established to hold property leased to it by the Council and to undertake other property development/management activities.

·  In December 2017, the Company’s structure was subject to a report by the Internal Audit team.  The report identified a number of areas for improvement within the Company’s governance structure and assurance mechanisms which would need to be addressed as the scope of the Company’s activities expanded.  A report to this Committee in November 2018 described the Internal Audit findings and referred to a forthcoming review of the Company’s aims, objectives and governance structure.  It was agreed that the outcomes of the review would be reported back to this Committee.

·  The review, which was undertaken with the assistance of external solicitors, had resulted in confirmation of the Company’s future aims and objectives, an amended draft Business Plan and various other company documents, clarity on the Service Agreement required and clarity on the different roles of the Company and the Council.  The Policy and Resources Committee had agreed to recommend to Council a number of measures to implement the findings of the governance review.  These recommendations would be considered by the Council at its meeting in December 2019.

·  As shareholder, the Council was responsible for certain functions in respect of the Company (“reserved matters”).  It was proposed that the Council delegates the function to make shareholder decisions to the Policy and Resources Committee and that the Committee delegates certain shareholder reserved matters to a nominated Officer, who, it was suggested, should be the Director of Finance and Business Improvement.  There was provision for representatives of the Council to attend and observe Board meetings.  This would generally be the Director of Finance and Business Improvement who would also represent the Council at the Annual General Meeting.

During the discussion, the Director of Finance and Business Improvement undertook to make sure that information relating to Board meetings was circulated to Members of the Policy and Resources Committee as the relevant Committee.  He also confirmed that it would be in order for Members of the Policy and Resources Committee to attend Board meetings.

In response to further questions, the Director of Finance and Business Improvement explained that:

·  Although the Company would hold an Annual General Meeting which representatives of the Council could attend, he did not think that it would be appropriate for members of the public to attend.

·  Regular reports on the activities of the Company were presented to the Policy and Resources Committee as part of the quarterly financial monitoring report.  If the Audit, Governance and Standards Committee was interested in the activities of Maidstone Property Holdings Ltd, it would need to make sure provision was made in the Internal Audit and Assurance Plan.

The Head of Audit Partnership confirmed that although the Internal Audit Service was the Council’s Internal Auditor, it had not been appointed as the Company’s Internal Auditor.  However, the way the Council used its powers to oversee and direct the Company, rather than the operations of the Company itself, was part of the Audit Universe and would be looked at in due course after a risk assessment.

RESOLVED:  That the report updating the Committee on the outcomes of a review of the governance arrangements at Maidstone Property Holdings Ltd be noted.