Council Owned Entities
Council Owned Entity” is an organisation that is owned by the Council. This organisation is set up to deliver services on the Council's behalf.
Councils are being encouraged to become more financially independent and reduce their reliance on government funding. The Localism Act 2011 and the Local Government Act 2003 support this by giving Councils more freedom to trade, charge, borrow and invest.
Where a council wants to trade for profit, the law requires this to be done through a company that has been set up for a commercial purpose. If the organisation is not set up to make a profit, other legal structures may be used, such as a Limited Liability Partnership (LLP).
Cornwall Council owns or has joint ownership of the following entities:
- Corserv Ltd
- Treveth Holdings LLP
- Celtic Sea Power Ltd
- Langarth Garden Village LLP
- Cornwall Housing Ltd
Role of Entities
Council Owned Entities are set up for many different reasons and can provide a range of benefits to the Council, such as:
- To make a profit and return a cash benefit to the Council which can be reinvested across all Council services
- To make a service more efficient by operating in a commercial environment
- To intervene in the market
- To manage demand
- To take a service into public management
- To turn around a failing service
Shareholder/Owner Representative
The Council is the Shareholder/Owner for each Council Owned Entity. As a default, this function is exercised by the Leader of the Council. The Owner can appoint a Shareholder/Owner Representative which will usually be the Chief Executive of the Council, but could be senior officer. The Shareholder/Owner or Shareholder Representative will ordinarily approve all reserved matters, though some may be referred to Cabinet.
The Chief Executive is the Shareholder/Owner Representative for Corserv Ltd, Cornwall Housing Ltd, Treveth Holdings LLP and Langarth Village LLP.
The Chief Operating Officer and Section 151 is the Shareholder/Owner Representative for Celtic Sea Power.
The role of Elected Members in Council Owned Entities
Elected Members help oversee and guide these entities. Their involvement spans several committees and roles, as listed below.
Cabinet or Leader Decision Making
Cabinet reviews the performance of the Council Owned Entities against their business plans through Cabinet quarterly performance reporting.
Business plan approval
Cabinet or Leader approves strategic business plans.
New entities
Cabinet review and approve proposals to set up new entities.
Reserved matters
They handle key decisions on reserved matters.
Delegated authority
The Cabinet can pass specific decisions to an officer.
Overview and Scrutiny Committee
Scrutiny role
The Corporate Finance and Performance (CFP) Overview and Scrutiny Committee (OSC) carry out the scrutiny function of the Shareholder/Owner's Board and can call the Shareholder/Owner's Board to account on any relevant matter. Each Council Owned Entity must produce one and four-year business plans which are subject to comment from CFP OSC and approved by Cabinet.
The other Council OSC's carry out the scrutiny function of the Shareholder/Owner, in respect of matters as they relate to the OSC's area of responsibility.
Recommendations to Cabinet
Provides recommendations on the business plans of Council Owned Entities.
Audit Committee
The Council's Audit Committee reviews the Annual Governance Statement. This sets out:
- the controls
- risk management processes
- and systems
that it has in place to govern the Council Owned Entities and the findings and learnings from any review of the entities during that period.
Annual review
Audit Committee review the Annual Shareholder/Member Reports for each entity to ensure compliance.
Advice
They provide governance and compliance advice to the Shareholder/Owner.
Endorsements
They review all entity business plans and reports to protect the Shareholder’s interests.
Shareholder/Owners Board
The Shareholder/Owners Board provides strategic assurance to the Shareholder/Owner that their interests are protected.
Chair
Comprises the Leader and Deputy Leader (Chair)
Advisory function
They advises the Shareholder on strategic matters, including reserved matters, without making decisions.
Endorsements
They endorse entity business plans and Shareholder/Member reports to safeguard the Shareholder’s position.