Issue - meetings

To enable the Cabinet to consider and agree the preferred option relating to the future of the Company and to also note the decision of the Company Board in relation to the three Local Delivery Vehicles.

RESOLVED that Cabinet –

(a)    notes the decision of the North Essex Garden Communities Ltd Board on 6^th July 2020 to take all the necessary steps to wind up the three Local Delivery Vehicles, namely Colchester Braintree Borders Ltd, Tendring Colchester Borders Ltd and West of Braintree Ltd;

(b)    notes Colchester Borough Council’s disappointing decision not to approve their partnership contribution to the NEGC project and requests that the Leader of Tendring District Council formally write to Colchester Borough Council to express this Council’s concerns with regard to future working arrangements and seeking clarity around remedying their equal share of project responsibilities;

(c)    approves, as a Shareholder, that North Essex Garden Communities Ltd. ceases trading with effect from 31 August 2020; and

(d)   approves the necessary winding up procedures are undertaken, subject to the Leader of the Council, in consultation with the Section 151 Officer and the Monitoring Officer, being satisfied around the final accounting processes.

Councillors Stock and G V Guglielmi, as members of the Cabinet and therefore decision makers, each had earlier in the meeting declared a Personal Interest in Agenda Item 9 – report A.2 – North Essex Garden Communities Ltd. insofar as they were, respectively, a Director and an alternate Director of NEGC Ltd.

The Cabinet gave consideration to a report of the Leader of the Council (A.2) which enabled it to consider and agree the preferred option relating to the future of the Company and to note the decision of the Company Board in relation to the three Local Delivery Vehicles.

The Leader’s report set out for Cabinet the options for the future of the North Essex Garden Communities Ltd. and the three Local Delivery Vehicles (LDVs) following receipt of the Local Plan Inspector’s letter on 15 May 2020 and focused on the following points:

·           NEGC Ltd – its structure and purpose and company liabilities and resources;

·           Winding up the Company – the legal process;

·           Employment implications – pension strain and redundancy/TUPE implications; and the

·           Financial implications.

Cabinet was made aware that, on 6 July 2020, the North Essex Garden Communities Ltd Board, consisting of representatives from each of the North Essex Authorities (“the Councils”), had met to consider the current position and to agree the preferred options for the future of the Company and the three LDVs. At that meeting it was agreed that:

·           the Company would recommended to the shareholders to cease operations of NEGC Ltd on 31 August 2020 and thereafter begin activities to close the company down;

·           the Company would recommend to the shareholders to consider the closure of the three LDV companies in line with the NEGC Ltd closure; and

·           the Company would recommend to the shareholders to make the NEGC Managing Director post redundant as of 31 August 2020.

It was reported that the Councils had worked closely together to consider the options available to each of them as Shareholders, and, as a result of that action, the following options had been identified:

Option 1 – Braintree District Council would ‘exit’ and restructure to reflect an alternative purpose;

Option 2 – the Company continues to work on proposals for delivery models for the NEAs to decide upon, though this would require substantial ongoing financial contributions;

Option 3 – the NEAs remain within the Company, but restructure to make it fit for purpose, though this would require ongoing substantial financial contributions; and

Option 4 – Close the Company and three current LDVs.

Cabinet was informed that, following an evaluation of the current position, the options available and the issues identified within the Leader’s report, Option 4 was recommended as the preferred way forward for this Council. The reasons behind that recommendation were that:-

(1)    for the Company to carry on with a view to becoming part of the delivery vehicle would require a company restructure and substantive variations to both the Shareholder Agreements and the Articles;

(2)    the Company had not expressed any interest in progressing  ...  view the full minutes text for item 35