To review the final report of the Panel.

N.B.  The report and associated appendices are Open with the exclusion of Appendix A1 which is Exempt.

The Chairman introduced the final draft report from the Scrutiny Panel ‘To review the running of Invest East Lindsey Limited, with a particular focus on Kingfisher Caravan Park’, pages 87 to 206 of the Agenda refer.

Members were reminded that the report and associated appendices were Open with the exclusion of Appendix A1 which was Exempt.

The Chairman thanked the Scrutiny Panel for their hard work and referred Members to the ‘Quality Check Criteria’ to consider whether the scope of the scrutiny had been met by the report, page 109 to 112 of the Agenda refer.

Councillor Daniel Simpson as Chairman of the Scrutiny Panel provided Members with a brief introduction and provided justification for the inclusion of the Exempt appendix.

Members were invited to put their comments and questions forward.

• Referring to the Paragraph which stated that ‘A point of concern to Scrutiny was the churn of members of these Boards’, the Chairman requested clarification on the context, page 101 of the Agenda refers.  In response, the Scrutiny Panel Chairman advised Members that the churn was the number of people in the early years of Invest East Lindsey that were appointed to and subsequently left the Board.  The Scrutiny Panel Chairman further advised Members that the time served on the Board was limited to a set period which could be renewed and that in that in the early days of the company, the churn of Board members was greater than the agreed timeframe. 

• In reference to the statement ‘To date Invest East Lindsey has borrowed around £6 million from ELDC and has outstanding debt of £4 million’, the Chairman noted that the same paragraph was repeated twice, pages 96 and 102 of the Agenda refer.  In response, the Chairman of the Scrutiny Panel confirmed that the duplication was intentional to emphasise a point.

• A Member commented that it was essential when setting up a company to have good governance and an active risk management plan and that the report evidenced this was lacking for Invest East Lindsey.  In response, the Chairman commented that the same principles applied across a range of Council activities.

• A Member queried whether Invest East Lindsey had plans to overcome challenges identified in the key lines of enquiry.  In response, the Scrutiny Panel Chairman confirmed to Members that steps had been taken to overcome some of the challenges where future plans could have been compromised and that the report had highlighted and made reference to the measures they had taken.

• The Scrutiny Panel Chairman highlighted the complexity of the financial information that was examined and noted that the Audit and Governance Committee had received the internal audit report.  The Scrutiny Panel Chairman further commented that a forensic accountant may have been more effective at drawing out specific pieces of information to determine whether the business was financially viable and concluded that Scrutiny Panels were facilitators rather than trying to examine information as professionals.

• The Chairman commented that there was a clear divide between the roles of Audit and Governance and Overview Committee, and that the Council could consider finding the resources should there be a need for independent scrutiny.

• A Member voiced concern with the findings of the internal audit report noting that the Council had lent the organisation over £4 million of public money and agreed that the findings should be emphasised in the scrutiny report. 

The Chairman thanked Councillor Simpson and the Scrutiny Panel for their contribution.

Following which it was,

RESOLVED:

 • That the draft report of the ‘To review the running of Invest East Lindsey Limited, with a particular focus on Kingfisher Caravan Park‘ Scrutiny Panel be noted.

• That Overview Committee recommended the report for consideration at the next Council meeting.