Transcript

Good evening everybody and welcome to the first meeting of the shareholder executive committee. Just before we start the meeting proper, I was just going to do a short introduction. Tonight obviously marks the next step in improving the governance of council committees. We know we have many committees, 27 at the last count I think, of companies owned wholly or partly by Woking Borough Council. Many of you will know that prior to 2022 we had Councillors sitting on the boards of these companies as directors and the first step really was to remove that potential conflict of interest there. That led us to the model of a shareholder advisory group which met in private to review matters relating to the companies. We have progressed that further now to the model we are starting in public this evening, the shareholder executive committee. The shareholder executive committee, or SEC, is essentially the executive committee meeting but in its role as a shareholder of the council companies. A key difference is this meeting in public. We won't be able to have all of the meeting in public but we will be aiming to have as much of the meeting as possible in public. There are commercially confidential items and for those we will need to go into a private session or a part two of the meeting but we will always seek to cover as much as possible at a higher level probably within the part one or public part of the meeting. At the end of the meeting we will have minutes and those minutes will summarise in some detail everything that has been decided and determined and anything that is put towards the companies as a result of the meeting. So we have with us this evening the executive and then representatives of both Thamesway limited and Victoria square working limited plus other advisors on the companies. So I'm going to start the proper agenda now. With item one, apologies for absence. And we have apologies for absence from Councillor Forster and Councillor Nicholson who are able to be with us this evening unfortunately. Item two is declarations of interest. There are some listed here on the agenda. Does anybody else have any declarations of interest to add? Thank you. Item three, urgent business. There are no items of urgent business. So we will move to item four which is the report of the shareholder liaison service. And the reports come from Kevin Forster and the shareholder liaison service which is the advisory body of officers that advises the shareholder executive committee. Mr Forster.

Thank you. Thank you, chair. And evening. Evening committee. Could I first introduce both Michael and Petra to the committee, both Michael and Petra provide support through the shareholder liaison and therefore the primary content of that advice. This is the first of the report to the shareholder executive from the shareholder liaison service. And as such, we identified within the report the key responsibilities of that shareholder liaison service which is to advise you as the shareholders of these companies in respect of related issues to your shareholding within those companies. The companies do operate within a company governance framework which the executive of the council approved in November last year and that provides a framework from which the advice from the shareholder liaison service is given in respect of company performance reporting against that framework. We also identified the function of the committee which is primarily to hold the companies to account and to evaluate and monitor. And whilst we would have previously done that on the shareholder advisory group, the shareholder executive strengthens the governance arrangements around that which is appropriate to the extent of the council's shareholding and investment in the companies. It's also relevant to remind the committee that responsibilities of the committee operate within the exceptional financial support arrangements and they are identified in the report as requirements for the council which is to develop a robust asset disposal plan, a strict reduction plan for debt and robust commercial and insurance governance frameworks. They are a key requirement of the intervention. I think at that stage, that's the introduction to the overall shareholder liaison service and attached to the report is an overview of the Victoria Square company business plan that we can do in part one of the report and we will be receiving a presentation on that from Victoria Square later on the agenda. Thank you, Mr. Foster. Also we've said this is the first meeting of this committee and of course I think it's important to note the financial environment is significantly more challenging than that we faced in 2022 when we first moved to the new model of company governance. We've got the section 114 notice and obviously the intervention from the secretary of state. But I guess what hasn't changed is that our requirements as a council are that our companies are delivering maximum value for the borough, taking into account financial, economic, social and other responsibilities that it has. So I think I'd like to point -- at this point look to the executive and see if anybody wanted to make any points or to raise any queries in relation to the report of the shareholder liaison committee. Thank you. Councillor Johnson. Thank you, Madam Chairman. I just think it's a very helpful start and it gives a good basis for us to look back on over time to remind ourselves what actually we are here for. Because we can, when we get involved in detail, forget sometimes the purpose of what we're looking to do. And on that basis I find this a very helpful first go at keeping us on track for what we are intending to do. Thank you. Thank you, Councillor Johnson. Councillor Roberts. Thank you, chair. I think I'd like to understand a little bit -- a little more about Victoria Square as it represents our town centre and our high street. Actually, are we in a position where I can ask questions? Let me just -- I think we were looking at the shareholder liaison service report first and then moving on to the square. Okay. Okay. Thank you. We'll move on to that shortly. And I just wanted to highlight what I feel is quite important in this particular report. So page six of the report just looks at the exceptional financial support and what's required from that. I think that's an important thing we need to bear in mind as we look at the companies and the governance. So for example, we've got the requirement in there for asset disposals, for debt reduction, and for having robust commercial governance and assurance frameworks in place. I think they're really good points to bear in mind as we go through these papers this evening and discuss them with the various companies. As Councillor Johnson has said, it's a really good basis just to set us off on this. Okay. So there's no further points on the report of the shareholder liaison service. At this point, then, we just need to resolve that that report be received. That's agreed, executive? Thank you very much. So that moves us on, then, to the second part of the shareholder liaison service report, which is a sort of top-line overview of the business plan for Victoria Square Woking Limited. I think we're going to first have a short presentation of that. Thanks very much, and good evening. I wasn't going to go through it in detail. The intention was to give a quick overview and then, needless to say, invite questions. So just to emphasise, this is really about delivering a company that's going to work for the 100 per cent shareholding of Woking Borough Council. We are improving governance post that transfer in April. We're looking at robust operation of the business. We're looking to resolve a range of legacy issues to make sure that we've got excellent liquid assets that can deliver ultimately for the taxpayer and the public purse. We're developing a long-term commercial strategy and have appointed Knight-Frank for that purpose. And in addition to all of that, we will be looking to deliver optimal but affordable debt repayments. Part and parcel of that is very much the financial management of the business. I'm delighted to introduce Elizabeth Hill as our new finance director. We have, I'm delighted to say, a further financial controller joining on the 8th of July, and so we will see significant change in the quality and proactive nature of financial reporting for Victoria Square through the period to Christmas, and that includes transition of financial management from our previous joint venture partner, Moyallen, through to Victoria Square by the end of the year. Beyond that, very, very happy to discuss and take questions. Thank you very much, Tim. That's really helpful. Good to have a quick intro like that, but obviously, no point in going through the whole report, which is before us here. I just wanted to pick up on where we are on the governance side of things, really. Obviously, there have been changes to the board. We've got a new chair in Jane Wynn. Just wanted to get some early indications of how you feel the board is performing. How is it getting up to speed with the business and bringing the subject expertise of those who join the board to address the key business issues and priorities? I'll start and maybe pass to Jane Wynn for additional comment. Jane's added significantly to the rigor and discipline expected at board reporting, which is great. She's also been extremely supportive, but also highlighted the need for developing resource within the business as well as at board. We also have a separate new non-exec director, Jean-Marc Van de Veer, who is chief executive of a business called Platform and has significant real estate experience, both strategy and particularly residential, from British Land amongst other organizations. I also, before him, spent significant time at British Land, and I can certainly say that that is a super learning ground in that particular sector. He's already brought his property skills and strategic thinking to board and was interrogating us in absolutely the right way at the last board meeting we had on the 18th of June. We also have Colin Taylor, continuing as an interim non-exec director, and he also adds complementary skills from a public sector and from a marketing perspective. And I know that Jane is in the process of recruiting a new non-exec director to complement that group with financial specialization. So that in itself is a significant improvement. There are new expectations on financial reporting, and we're working together on achieving better transparency, which you in turn will see at shareholder executive committee over the next few months. But I think we need to give Elizabeth and the financial team a little bit of time to be able to develop proactive management accounting, and then no doubt dashboard reporting that we can then feed through, potentially filter but deliver clear and concise reporting here. Jane, I don't know if you want to add anything. I'm not sure there's too much I can add to that. But to give you reassurance, Councillors, we had our first board meeting last week, and yes, it's new ways of working for many of us in the room, in the chamber this evening. But it was a very positive board meeting. As Tim said, there was a usual scrutiny and rigor to the business plan that you're considering, and a wide range of topics. So there was good horizon scanning. Everyone around the board is very alive to the complexity. They understand the technical detail, but they also have the empathy as to what we are trying to achieve and the values that one puts to that. So I was very pleased as a first meeting. We're in our first rhythm of these reporting cycles, and we'll get faster and we'll get more agile. So that process is starting. There's a lot of work to do, but I think I've been very reassured and very happy as to the intent and motivation and investment in the recovery plan that I've seen since being appointed. So I'm very encouraged by that. Thank you. Thank you, Tim and Jane. Jane, can I just ask, you've obviously got the recruitment process in train for the finance person, a finance person for the board as a non-executive. Will that complete the necessary skills for the board, or would you envision that anything further is needed? I'm expecting that to be it. Thank you. Thank you. That was an easy one. I'm going to turn to the executive now and see if they have questions that they'd like to put. Councillor Roberts, you had some earlier. Are you ready? Thank you, Chair, and thank you, Tim, for that update and the report. I get the sense that it's been good progress on moving from what was a joint venture, moving from what was a development company to an operating company, and I'm encouraged to hear some comments about settling into a new cadence as an operational business. All I would suspect exactly what we would expect from a business going through that transition. The question that I was keen to ask, having read the report and having talked to you over the sort of various meetings that we've had, is that it can't have escaped anybody's notice that the purpose of a town centre has changed the mainstay for perhaps the whole of this century has been retail, retails in sort of terminal decline. Can you speak to the town centre offer? I'm particularly interested because you're one of a number of players in working town centre, very closely associated of course, and how well given that there are a number of players we can respond to the changing needs of our residents and visitors to our town centre. Thank you. Okay, needless to say we're limited from a Victoria Square perspective by the buildings that were constructed and the units and three towers that we built. In terms of contribution, we're moving the property management services arrangements with Savills as centre manager for the area into one place so we have single point of responsibility. You're not able to pick that up from the business plan. In terms of adding the ingredients and the glue that hold together a successful vibrant town centre, we will be looking at commercialisation outside of units as part of our long-term commercial strategy. As you may be aware we are limited by the sterile nature of Henry Plaza but we have options to change that but at the moment cost would be prohibitive I would say. Other than that we're working very closely with joining owners Wolsey Place which is a natural fit with our own return and leisure offer and we're also, in fact this afternoon I spent time with the centre manager driving peacocks to establish how we can encourage Aurora as owner of peacocks to repurpose the currently vacant Debenhams and add life into that asset. I would say that is a risk to the town centre but I'm sure that they are very aware of that and looking to improve both the activity but also ultimately the net operating income from that asset in time. And on top of that the marches goes from strength to strength. We've been above 98 per cent occupied since August 2023 and that's adding a significant population in excess of 1500 people to the town centre and hopefully that will set a precedent to allow greater activity, greater population in Woking which further drives the economy and adds to the potential for flourishing retailers, food and drink offers, leisure and so on. Just to say thank you I think it's again reassuring that we're working with in all the right ways to integrate the experience for residents particularly as it relates to Wolsey Place. I appreciate the difficulties working with a completely different party in the peacocks but again encouraged that we're working much more closely with them and I think we have to recognise that there is a risk there, don't we? Absolutely but nonetheless you go to comparable town centres and perhaps with the exception of the peacocks Wolsey and Victoria Square are remarkably successful and we do have interest in our vacant units including wider range, occupiers, one hot yoga operation believe it or not so additional offers that Woking doesn't necessarily have at the moment and we'll also be looking at other initiatives even potentially in public spaces where we can. Thank you Tim. Councillor Johnson. Thank you Madam Chair regarding Victoria Square I'm interested in the infrastructure side and the additional accountancy because it's not just about people it's about structure and systems and IT systems and I'd be interested to know that we're getting those up to speed as well because there's quite a lot involved in Victoria Square as a business, different aspects of it. I'd be grateful to know if we feel comfortable about taking the business forward or will you need to change quite a lot to get there to get the structure in place and systems in place, IT in particular I would think. A couple of more detailed questions I guess, the comments that were raised on the documents you sent through it talks about prepare the title and technical due diligence to implement the strategy clearly and successfully, can you explain what that actually means please? And secondly, are we on track to open the hotel as it says here in late September this year, I don't know when this was prepared but as time moved on and we are closer to being more accurate with that do you think? With the cladding issues are they going to be resolved and so on? Because it's quite an important part of the strategy to get that up and running isn't it? So I'd appreciate some comments on those please, thank you. Thank you, in terms of systems, people, organization, there will be changes, there already are changes. Elizabeth for one is looking to introduce a new accounting system so that we can transfer from the SAGE system that's operated by YALM, that will be part and parcel of our financial reporting and upgrade across financial management generally, we're also in the process of seeking an asset management lead or director that will bring additional discipline and we may well also need to bring in someone with property investment expertise to support the long-term commercial strategy which will flow from the Knight-Frank exercise and then interface with Interpath Advisory. At this point just a quick question whether or not this is part one or part two type material and whether we should be dropping into detail now or later? My question is in part one and so we ought to stick to what I've asked I think. Okay, perfect, so beyond that significant change and you will see the results of that as we move forward to more transparent financial reporting when we are proactive on a monthly basis. In terms of the reference to title strategy, we know that when we go through our long-term commercial strategy, we will be looking to, for want of a better word, divest or bring in new investors. To be able to do that, the existing corporate and title structure will not work. We've got a freehold, Victoria Square Woking Limited and two 25-year leases to the two subsidiary companies. Those would not be saleable as investments. So we will need to restructure once we know our optimal long-term strategy both for valuation purposes but also potentially for bringing in new investors and releasing value to the taxpayer and the public purse. And finally in terms of the hotel, the current date that I'm given by Sir Robert McAlpine is the 16th of September for completion of the works and as a result at the moment end of September is realistic. However, as we know, there are risks and we will expect an updated programme relatively shortly and we will be sharing the outcome from that when it's available. Thank you, Tim. Councillor Lyons. Thank you. Just before I ask the question I was going to ask, can I just, in your answer to Councillor Roberts' questions, you used the phrase 'sterile nature of Henry Plaza', can I just ask what you meant by that? Because I don't understand it. Very fair question. Regrettably the brief for Henry Plaza was to deliver a space that could carry no fire load. As a result we are limited in terms of what activity we can bring into that space and it has to be people-based. We can't bring in, let's say, a set of market stalls for a farmer's market or something along those lines. We can change that but at a reasonably significant budget and it's something that we've looked at. We have put that on the shelf and it will be useful from a long-term commercial strategy perspective. Yes, that makes sense, thank you. One of the biggest wins we've had in recent years is getting Italia Conti to come to the town and it's certainly something, and I bring friends to working for the first time, they're surprised to see it, and it is certainly a much more vibrant town having third level students based here for the first time in, as long as I've lived here anyway. To what extent are we making use of Italia Conti and the opportunities that having them in the town bring, and do you see them playing a bigger role than they currently do going forwards? We have regular interaction, we've offered various opportunities to perform publicly, I'd see that increasing as they bed in. I think they're settling down, we're looking at the end of their second academic year, and I think as they get more established and grow, they may well be looking for additional space, having a greater impact on the town center, and hopefully you will see them performing rather than simply out at break time within privately-owned public spaces. Thank you, Tim. Thank you, Councillor Lyons. Do you have any further questions from the Executive? Another point that I was interested in putting is around that future vision piece, I suppose, really, and where you would see Victoria Square getting to in terms of the success of the shop units in recent years. I don't know if anyone's heard it, but there's various rumors that go around at different times that different parts are closing down or not going to be there. Do we feel that the units that are there are trading well and being successful at the moment? I think generally, yes. Boots are performing spectacularly. Marks and Spencers are performing well, and I think the two of them are vital to the success of the scheme as a whole. We're also working closely with Marks and Spencers to increase their basket size, get better real as well as digital wayfinding so that people realize that they can bring their cars into the green car park, use the trolleys, which are not used enough to drive much greater revenue for Marks and Spencers and create an even more successful anchor for the scheme. Elsewhere, our retailers appear to be operating reasonably or successfully with the exception of a couple of retailers. We're aware that Lark perhaps could be performing better, and we're working with them. And in terms of the residual two units on Commercial Way, hopefully Hot Yoga, Hot Hub Yoga will manage to get a business plan forward to us to scrutinize and occupy that space. And in addition, the residual unit on Henry Plaza adjacent to the entrance to Export House is very close to completion, alerting to super cuts. Thanks for that, just good to clarify, because there is a crazy rumor that keeps popping up and I keep quashing along the way, so it's good to have that in public. Thank you, Tim. Right, if there are no further questions or points from the Executive, we're not going to make a decision on this part of the report, so we'll be looking in some more detail in the part two of the agenda when we look to whether we're accepting the business plan or not at this stage. Thank you for your responses to date. That takes us on then to the work program. So this is a standard piece, which is just setting out what our work program is going to be for the year under this new committee. If you look at a PDF, it puts things in all sorts of different places, why it can't standardize, I have absolutely no idea, but that's what I was struggling with, finding the settings. Right, I'm on the program now. So if you look at the program before you, you'll see that we have monthly meetings of the shareholder Executive Committee, and there are items we'd expect to see come to us monthly, quarterly, the occasion will be six monthly and annual, so we have a fairly clearly set out program that we would keep to, inevitably I guess there may be other items that would need to come into this program, but it's essentially about tracking the financial and performance reports, about having business plans coming through on an annual basis, and a rolling program of those coming through from different council companies, with the main ones being here this evening, Victoria Square and Tensway, and the other significant one being Brookwood, who we'll see a little later in the year, Brookwood Cemetery. Does anybody have any queries or points on the work program, anything to add at all? No? Okay, that's great, thank you very much. So are we happy to accept the work program, and resolve that as received? Thank you. This takes us on to item seven on the agenda, so this is where we end part one of the meeting, and I propose that the press and public be excluded from the meeting during consideration of items 8 to 11, in view of the nature of the proceedings, that if members of the press and public were present during this item, there would be disclosure to them of the exempt information as defined in paragraph three of part one of schedule 12A to the local government act, 1972. And I'd like to look to a member of the executive to set that proposal, Councillor Lyons, thank you very much. So we will now take a short pause while we move into part two, and stop the recording