Agenda and minutes

Councillors and officers to declare any interests which they may have in any of the items on the Summons for the meeting.

Councillors and officers were invited to declare any interests which they had in any of the items on the Summons.

The following interests were declared:-

Personal Interests

This Council Meeting believes that the best interests of the residents of Stockport have been neglected and that there have been serious and on-going failures of corporate governance and financial oversight of the Council’s wholly owned company Solutions SK which have resulted in:

·         The loss of over £5 million;

·         The wiping out of all alleged “profits” at SSK since its inception in 2006;

·         tying up of £5 million of taxpayers’ money in an earmarked reserve to support SSK which now cannot be used on frontline and priority services during difficult times and a sum which is equivalent to around 33% or one third of the Executives’ savings and cuts requirement for 2013/14;

·         Additional financial pressures on the Council’s own budget including the removal of £1.235 million in available cash resources as a result of the cancellation of the volume discount usually received from SSK and the inability to access the £5 million in cash resources in an earmarked reserve (as above);

·         Additional unforeseen expenditure of hundreds of thousands of pounds incurred in investigating this matter; and

·         The likely incurring by the Council of further significant expenditure of hundreds of thousands of pounds in financing SSKs recovery plan.

This Council Meeting believes that the political governance of SSK has been politically incompetent and remains seriously concerned by the failures which have occurred, including:

·         The failure for the minimum level of financial information required to monitor the company effectively to ever be provided or requested, despite the covenants laid out at the set-up of the company;

·         The failure to ensure that serious concerns raised by internal audit were ever addressed and the mitigating recommendations implemented;

·         The failure to hold the prescribed regular, correctly organised and minuted meetings by bodies overseeing the company;

·         The failure to ensure that the covenanted duty to agree an annual SSK business plan and annual budget with the Council was fulfilled consistently from the company’s inception;

·         The failure to ensure that legal documents such as the Annual Accounts of Solutions SK bore any resemblance to the true performance of Solutions SK; and

·         The failure to ensure those councillors in a position of responsibility for oversight either demonstrate capability for the role or undertake suitable training.

This Council Meeting further believes:

·         That the disastrous financial management at Solutions SK would not have continued for so long had there been any meaningful oversight of the company’s activities by elected members of this Council;

·         That this lack of oversight arose because of the deliberate policy of the Liberal Democrat-controlled Executive to deny opposition councillors and members of the public access to information on the affairs of Solutions SK, or any opportunity to hold management and directors to account.

This Council Meeting deeply regrets that until now, not one person has been held accountable for the crisis at SSK, the failings identified in the KPMG and Cobbetts report and the incompetent political  governance of the Council’s Wholly Owned Company, SSK.

This Council Meeting further regrets that so far no formal proposals for the reconstitution of the SSK Contributors Committee and reform of oversight of the company have been put forward by the ruling group and believes that this matter should be looked at by an all-party Working Party as a matter of urgency as soon as Cobbetts and KPMG report back on their findings and make recommendations for the corporate governance of the company.

This Council Meeting therefore has no confidence in the Contributors Committee.

Moved by:                  Councillor Andy Verdeille

Seconded by:           Councillor Syd Lloyd

MOVED AND SECONDED - This Council Meeting believes that the best interests of the residents of Stockport have been neglected and that there have been serious and on-going failures of corporate governance and financial oversight of the Council’s wholly owned company Solutions SK which have resulted in:

·         The loss of over £5 million;

·         The wiping out of all alleged “profits” at SSK since its inception in 2006;

·         tying up of £5 million of taxpayers’ money in an earmarked reserve to support SSK which now cannot be used on frontline and priority services during difficult times and a sum which is equivalent to around 33% or one third of the Executives’ savings and cuts requirement for 2013/14;

·         Additional financial pressures on the Council’s own budget including the removal of £1.235 million in available cash resources as a result of the cancellation of the volume discount usually received from SSK and the inability to access the £5 million in cash resources in an earmarked reserve (as above);

·         Additional unforeseen expenditure of hundreds of thousands of pounds incurred in investigating this matter; and

·         The likely incurring by the Council of further significant expenditure of hundreds of thousands of pounds in financing SSKs recovery plan.

This Council Meeting believes that the political governance of SSK has been politically incompetent and remains seriously concerned by the failures which have occurred, including:

·         The failure for the minimum level of financial information required to monitor the company effectively to ever be provided or requested, despite the covenants laid out at the set-up of the company;

·         The failure to ensure that serious concerns raised by internal audit were ever addressed and the mitigating recommendations implemented;

·         The failure to hold the prescribed regular, correctly organised and minuted meetings by bodies overseeing the company;

·         The failure to ensure that the covenanted duty to agree an annual SSK business plan and annual budget with the Council was fulfilled consistently from the company’s inception;

·         The failure to ensure that legal documents such as the Annual Accounts of Solutions SK bore any resemblance to the true performance of Solutions SK; and

·         The failure to ensure those councillors in a position of responsibility for oversight either demonstrate capability for the role or undertake suitable training.

This Council Meeting further believes:

·         That the disastrous financial management at Solutions SK would not have continued for so long had there been any meaningful oversight of the company’s activities by elected members of this Council;

·         That this lack of oversight arose because of the deliberate policy of the Liberal Democrat-controlled Executive to deny opposition councillors and members of the public access to information on the affairs of Solutions SK, or any opportunity to hold management and directors to account.

This Council Meeting deeply regrets that until now, not one person has been held accountable for the crisis at SSK, the failings identified in the KPMG and Cobbetts report and the incompetent political  governance of the Council’s Wholly Owned Company, SSK.

This Council Meeting further regrets that so far no formal proposals for the reconstitution of the SSK Contributors Committee and reform of oversight of the company have been put forward by the ruling group and believes that this matter should be looked at by an all-party Working Party as a matter of urgency as soon as Cobbetts and KPMG report back on their findings and make recommendations for the corporate governance of the company.

This Council Meeting therefore has no confidence in the Contributors Committee.

AMENDMENT MOVED AND SECONDED - This Council notes:-

·         That there has been an extensive, multi-phase independent investigation into SSK’s financial situation.

·         That all Group Leaders had access to the investigation and to agreeing the Terms of Reference for all phases of that independent investigation.

·         That all Groups had the opportunity to ask questions of the Investigators after Phase one was published and copies of the redacted report had been circulated to all members,  ...  view the full minutes text for item 2.(i)