Sunday 25 February 2024
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Nottingham

New policy to ensure councillors are suitable to sit as directors of companies

Nottingham City Councillors working as board directors of council-linked companies will have to re-apply for the roles as part of a new policy aiming to ensure they are fit for the jobs.

The change follows a Public Interest Report, published in 2020 after the collapse of council-run Robin Hood Energy.

The report was critical of the council’s process for appointing councillors to company boards, saying it was “not seen as good practice”.

Five current councillors are listed as directors of Nottingham City Council-linked companies including Nottingham City Transport and Nottingham City Homes.

The director policy change is one of a series of orders made by the Government-appointed Improvement and Assurance Board (IAB) overseeing change at the council.

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It says there should be a process the council must follow when appointing board directors to any of its companies.

At the time of the 2020 report the council refused to ban councillors from the boards of companies, despite the report arguing there could be a potential for a conflict of interest in some cases.

New council documents say: “The performance of each company’s board of directors is critical in delivering the council’s objectives, which should be clearly set put in the original business case, governing documents, and the annual business plan.

“The purpose of this policy is to ensure that the best possible appointees are recruited to each board and that the IAB requirements are met.”

However, the new policy does not prohibit councillors applying to become board directors and adds: “If the best candidate for appointment is a councillor, then the best interests of both the company and the council will have been met.”

Applicants will have to meet certain criteria.

“We would expect appointees to be able to demonstrate personal commitment to the city through professional, personal or voluntary activities,” documents add.

Furthermore, documents reveal non-councillor and non-council officer appointments will be entitled to remuneration of up to £400 per day.

It is common for large city councils across the country to operate some services such as transport and housing as separate companies.

The Local Democracy Reporting Service asked the council for a full list of councillors who are listed as sitting as board directors for council-owned companies.

A number of those listed as board directors are no longer sitting as councillors following the May local elections or through standing down previously.

Cllr David Mellen, the leader of the council, currently sits as a director for property developer Blueprint Limited alongside Cllr Leslie Ayoola.

David Trimble and Anne Peach, who are no longer councillors, are listed as sitting on the board as directors for the National Ice Centre and Motorpoint Arena Nottingham.

Cllr Neghat Khan sits as a director for Nottingham and Nottinghamshire Futures alongside Rebecca Langton, who has also stepped down as a councillor.

Cllr Georgia Power sits as a board director for Nottingham City Homes Limited alongside Sam Webster, who is no longer a councillor.

Mr Webster is also listed as a board director for Nottingham Revenue and Benefits, alongside former councillors Eunice Campbell-Clark and Phil Jackson.

Cllr Graham Chapman currently sits as a director on the board for Nottingham City Transport (NCT).

Former councillors Angharad Roberts and Phil Jackson are also listed as board directors for NCT.

Speaking to the Local Democracy Reporting Service, Phil Jackson, who represented Bilborough for Labour, said he believes council-owned companies should have some councillor oversight to allow for accountability.

He raised concerns over having a board completely made up of unelected members because it may make accountability more difficult, emphasising board directors for Robin Hood Energy had been “hammered” at the time.

“Councillors are politicians more than business people, but they have a part to play I think,” he said.

“The Improvement and Assurances Board (IAB) have scuppered this. They are more vigilant about who goes on the boards now.

“It is a knee-jerk reaction to Robin Hood Energy.

“The skills councillors have are not the same as officers, but the IAB is increasingly wanting councillors to be more like that.

“I do not think it is bad to have councillors on boards. It is good to have a bit of oversight.

“There is always an argument for a democratic role for councillors on how companies are structured, because it allows for democratic accountability.”

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