Letter from the Ministry of Housing, Communities and Local Government appointing Sir Tony Redmond as Chair of the Nottingham City Council Improvement and Assurance Board. This letter includes the Board’s terms of reference.
The non-statutory review led by Max Caller focused on issues identified in a recent Public Interest Report on the council’s governance of Robin Hood Energy, the not-for-profit company it set up to tackle fuel poverty in the city.
Following the publication of Max Caller’s non-statutory review of Nottingham City Council on 17 December 2020, the Secretary of State for Communities and Local Government announced his intention to establish an Improvement and Assurance Board to provide the ongoing support the Council needs to deliver a recovery.
Letter to Sir Tony Redmond appointing him as Chair of the Nottingham City Council Improvement and Assurance Board.
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The report, which was carried out by Government investigator Max Caller found: “The degree to which the companies are autonomous from the council also varies considerably, with some not having any direct employees and utilising the services, exclusively, of NCC employees.
“In these instances, it is difficult to understand what benefit exists in them operating on a standalone basis, given the additional burdens of company reporting and governance requirements.”
“Some companies were also established / acquired to either profitably grow activity beyond NCC core services, or to help transform existing service delivery.
“Although there are examples of these objectives being met in some instances, there are a number where this is not the case and they have actually been a considerable drain on the council finances.”
The issue of putting councillors on the boards of companies without specialist knowledge receives significant attention in the report.
Work is ongoing within the council to look at this, and the leader of the council David Mellen said the findings of the latest report would be taken into account as part of this review.
The report found: “The role of (councillors as) non-executives is only effective when they have detailed sector knowledge, experience of interrogating management reports – especially financial reports – and an understanding of the risks that are inherent within the sector.
“There are some examples where councillors are fulfilling the role of nonexecutive and providing a good balance of support and challenge, but these seem to be in a minority.
“It is also a cause of great frustration to some management teams that they have no say in who is appointed to their board and the frequency with which changes are made, both of which are valid concerns.
On the performance of the companies, it found: “It is evident that recent financial performance across the companies is variable and, in many instances, deteriorating.
“Overall, the outlook (for council owned companies) for 2020/21 … despite the various support initiatives from the Government including the furlough scheme, is poor.
“Unless there is swift and comprehensive intervention it is highly likely that further funding will need to be made available to some of the companies, as has happened with NIC (Nottingham Ice Centre) since (April 2020)
“The onset of Covid-19 … highlights some of the risks of the commercialisation agenda that NCC has pursued over recent years.
“There are also some major capital investment decisions that need to be made as a matter of urgency and sufficient focus needs to be given to those critical choices, which will have far-reaching consequences if delayed further.
“In developing an appropriate medium- and long-term – strategy for which activities NCC consider might be best delivered in house, as opposed to the current approach, consideration needs to be given to the management bandwidth available within NCC.
In response, Nottingham City Council has said it has: “Fully accepted the findings of a rapid review carried out on behalf of the Ministry of Housing, Communities and Local Government.
