Issue - meetings

The Chairman welcomed everyone to the meeting and the call-in procedure was explained.

The Overview and Scrutiny Management Board considered Minute No. 141 of the meeting of the Cabinet held on 4th February, 2015 concerning the decision for the Council to provide an additional loan facility to the Magna Trust. The resolutions of the Cabinet were:-

“(1) That a short term Council loan facility to the Magna Trust of £250,000 be deferred.

(2) That the decision taken by the Chief Executive on 16^th January, 2015, in accordance with her delegated powers, to provide Magna with an immediate additional £100,000 loan facility, to be drawn down by Magna on demonstration of need, be noted.

(3) That the appointment of an independent consultant to undertake a review of Magna’s business, to help to strengthen the Magna business plan and to assess the future viability of Magna, be approved and a report be submitted back to the Cabinet in due course.”

The written and signed call in request, dated 9th February, 2015, read as follows:-

“At the Cabinet meeting, Wednesday 4th February, 2015, the Cabinet agreed to continue funding Magna over the short term and to hire an independent consultant to provide further insight and information into the longer term viability of the business.

UKIP does not believe this is necessary and that additional expenditure on the services of an independent consultant is a further waste of public money.

There is sufficient experience within the Authority to analyse the financial position at Magna and the management in place can provide additional information with regard to future business and the supporting services required to allow the Council to make a fully informed decision with regard to the ongoing viability of this enterprise.”

Councillor Cowles, supported by Councillor Reynolds (present) and also by Councillors Cutts, Reeder, Turner and M. Vines (not present) explained the reasons for the call-in request and presented the objections to this proposal, with reference to the following issues and views:-

a) The possible loss of employment at the Magna Centre would certainly be regrettable, however, there is no justification for this Council continuing to provide loans to the Magna Trust;

b) Equally, there is no need to appoint an independent consultant to undertake a review of the Magna Trust’s business, because this is just a very short-term study of the organisation and one which is capable of being completed by the Council’s own finance officers;

c)  The Magna Trust must be asked to prepare its own business plan and not have an independent consultant prepare one on its behalf;

d) The Council should not be making a decision on any grant for the Magna Trust until Council Members have seen and studied the Trust’s business plan;

e) The Council’s proposed funding of the ‘Man of Steel’ sculpture is also questionable and which will be questioned later this year;

f) This Council is only one of three organisations which provide funding for the operation of the Magna Centre; if the other  ...  view the full minutes text for item 105

-           Strategic Director of Resources and Transformation to report.

Councillor Hoddinott, Deputy Leader, introduced a report by Strategic Director of Resources and Transformation, proposing the provision of a one year loan facility to the Magna Trust of up to £250,000.  The existing £250,000 loan would be repaid by the 31^st March, 2015, deadline before the new loan was taken out. 

In accordance with her delegated powers, an urgent decision had been taken by the Chief Executive to provide an immediate additional loan facility of up to £100,000 to the Magna Trust.  This represented an increase of up to £100,000 to existing one year loan facility of £250,000.

It was suggested that an independent consultant be appointed to undertake a review of Magna’s business, to help to strengthen the Magna business plan and to assess the future viability of Magna and to give some assurances moving forward.  On this basis it was suggested that the short term loan facility be deferred pending the outcome of the review.

Councillor Cowles asked if the numbers for Magna in their financial statements had been looked at because from his point of view only one conclusion could be drawn.

The Deputy Leader pointed out that appointment of an independent consultant to review Magna’s current trading position would consider in detail their financial position, whilst taking account of opportunities for Magna moving forward

Resolved:-  (1)  That a short term Council loan facility to the Magna Trust of £250,000 be deferred.

(2)  That the decision taken by the Chief Executive on 16^th January, 2015, in accordance with her delegated powers, to provide Magna with an immediate additional £100,000 loan facility, to be drawn down by Magna on demonstration of need, be noted.

(3)  That the appointment of an independent consultant to undertake a review of Magna’s business, to help to strengthen the Magna business plan and to assess the future viability of Magna, be approved and a report be submitted back to the Cabinet in due course.

(Councillor Beck, Cabinet Member for Business Growth and Regeneration, declared a disclosable pecuniary interest in Minute No. 141 (Magna Trust Loan) on the basis that the Chamber of Commerce were members of the trust of Magna and left the room whilst the item was discussed)