Right of Reply – SSDC
We have received a detailed response from Cllr John Clark, SSDC Portfolio Holder for Economic Development and Commercial Strategy. This is in response to a piece we published online and in the December edition of The Leveller®. We are happy to publish this and will do so by way of giving the other side of the argument.
The original piece this relates to was “Secret Service” (A similar piece “Funny Smell in Yeovil appeared in our print edition of 15th December) and if you want to read more to get the context of the response you can follow the link here Secret Service
Response 1: The Commercial Strategy and its recent update are not secret: they were published in the agenda papers for (and subsequently approved at) the full Council meeting of 19th September.
The update to the policy did contain a Confidential Appendix with commercially sensitive information, and members’ discussions on those aspects of the policy were therefore held in camera. The total amount that Council has now approved to invest is £150m: the additional £75m was stated in the Financial Strategy 2020/21, which was approved at the District Executive meeting on 5th September 2019.
Editor’s note. Whilst we welcome this new response from the portfolio holder, our original piece contained a full response given by the SSDC Communications team. That response read as follows: “The position is that the disclosure of the investment fund would be prejudicial to SSDC’s affairs, because parties with whom we might wish to transact will be aware of how much we have to spend and this may weaken our negotiating position on price and other matters. It was also reasonable as there was a real chance of members wishing to discuss sensitive specifics of individual transactions and projects, whether past, current or contemplated – in other words, officers have to be mindful of not just what’s in the report but also where debate on that report might lead.”
Thank you for conceding that the extra £75m investment permission was in the public domain.
I cannot actually find in your original online piece that you raised the issue of the authority limit, but I will address it anyway. The arrangement that decisions on investment are taken by the Leader and Chief Executive, acting on the unanimous recommendation of the Investment Acquisition group is vital to implementation (more below on this).
Why? Because as I have said earlier, speed of bidding is an essential part of success, and to put a bid permission on the main Council agenda with the notice that requires would in almost all situations lead to loss of the opportunity.
The amount that Full Council delegates on investment needs a defined limit, appropriate to the expected maximum value of individual investments that may be considered.
That said, I have some sympathy with your view that this figure should be in the public domain, and will discuss with colleagues whether there are any valid reasons why we should not release it.
The referral to an ‘inner sanctum’ requires further detailed understanding of the commercial situation in which we operate. As we are competing with other commercial bidders, it is essential to work on any particular opportunity with speed, total confidentiality and thorough management of risk to the Council. The Commercial Strategy, approved by Council, addresses these elements well, but I will try to give you some insight into the detail. The expert commercial officer team looks at about 40 opportunities a month, and does a preliminary analysis on about the best-looking 10. Of these, an average of two opportunities are brought by a Chartered Surveyor, RICS Registered Valuer and investment property specialist before the Investment Acquisition Group (IAG), whose membership is openly stated in the Strategy (a highly qualified investment surveyor who manages our Commercial Property Service, the Council’s statutory ‘Section 151’ Financial Officer, the Council’s statutory Monitoring Officer (legal), the Director of Commercial Services, and myself as Portfolio Holder). Each opportunity has written proposal papers and a Red Book valuation circulated in advance, and is thoroughly examined for suitability and risk.
Only if this group is unanimously in favour is it forwarded to the Leader of Council and Chief Executive for their approval to proceed: again these two have to be unanimous. You might think that with the expertise of the commercial team, approval would always be given (and it very often is): however there have been examples where the IAG has turned down opportunities put before it, and also where the Leader and Chief Executive have turned down opportunities that the IAG has unanimously recommended (obviously we cannot go into details).