The Progressive Group of Councillors on Exeter City Council will this week seek to reduce the financial risks racked up by the Labour-led Council and demand long promised measures to oversee council companies are properly put in place. The call comes as yet another Council connected Company, Exeter Science Park Ltd, runs into trouble.
At the full Council meeting on Tuesday [1] councillors will be asked to convert £1,238,966 of debt owed by Exeter Science Park Limited into shares in the company following a report confirming they will be unable to repay the loan when it falls due in January 2025 [2].
Exeter Science Park Limited is the third council company to face problems over the last two years. In 2022 the Council’s Auditors Grant Thornton found significant weaknesses in the oversight of another Council company, Exeter City Living [2].
The Progressive Group will be tabling additional recommendations to the report which seek to ensure accountability for loans made by the council and ensure proper oversight of the Council’s connected companies [3].
Progressive Group Co-Leader Councillor Diana Moore (Green) said:
“Labour were warned two years ago by Auditors to get their act together to properly oversee the Companies connected to the Council, but the Labour Executive have just carried on regardless, ignoring these warnings. Now, yet again, councillors are being asked to raise the financial risks the Council faces by stepping in to cover the debt burden of another company. The Progressive Group of councillors is demanding that long promised measures to oversee council companies are properly put in place as soon as possible.”
Progressive Group Co-Leader Micheal Mitchell (Liberal Democrat) said:
“Exeter Science Park clearly needs input from those with business acumen and experience of the R&D landscape to help it achieve its aims for the city and create jobs. It has suffered because Labour has not paid attention to how this company has been run. It is clear the Labour-led council should have been aware of this problem for some time, so why are we only hearing about it now and to come to council at a time of crisis. Labour continues to play fast and loose with council funds at a time when front line services are under real pressure.”
ENDS
Notes
Report – Exeter Science Park Limited Conversion of debt to equity FINAL.pdf
[2] Microsoft PowerPoint – Exeter Auditor’s Annual Report 20_21 Final
[3] Additional recommendations proposed by the Progressive Group of Councillors:
- That the shareholder representative report back to Council not later January 2025, on the progress on the matters in Recommendation 4 and the Company’s ability to undertake the share buy back;
- As set out in minute 27 of the Audit and Governance Minutes of 30 November 2022 the next Audit and Governance Committee receive the report on the “review of the governance of external companies” and consider appropriate arrangements for the nomination for shareholder representatives to and the proper oversight of all Council connected companies and make recommendations to the Executive.
- To provide a report of all other unsecured loans and risk to the Council of those loans.