A decision that Lancaster City Council should directly manage the Storey Creative Industries Centre has been called-in for scrutiny.
The city council’s Cabinet discussed the future of the SCIC, which is currently managed by a private company, earlier this month and agreed to support its use as a creative industries centre but under the council’s direct management and control.
The decision was taken after the SCIC failed to meet the terms of a loan which was granted to it in February 2012.
However, the decision has now been called-in for scrutiny and the council’s Overview and Scrutiny Committee will investigate the issue at a specially arranged meeting on Tuesday 17th July at Lancaster Town Hall.
Members of the committee will consider the Cabinet report along with any additional information which has become available since the decision was taken.
The call in, made by Conservative councillors, argues the decision is unclear as to the actions that have been delegated to the chief executive and that “openness was lacking” in that the public report was not published until after the Cabinet meeting had finished.
It’s also argued the stated aim of the decision to take control of the running of the Centre is unclear and does not appear to have been set out unambiguously in the decision taken by cabinet.
“The aim ignores the financial implications of the preliminary actions decided upon, and potential future costs. The aim to be achieved by the decision is to resolve the future use of the Storey Institute building following the failure of the company to achieve profitability and at the same time to protect as far as practicable the interests of the sub tenants with businesses in the building, while also protecting the financial interests of local taxpayers.”
The call-in will seek to question the decision takers in order to make a recommendation to Cabinet (or Council) to clarify and modify the instruction given to the Chief Executive, so that the Cabinet decision leads to effective support of the Creative Industry businesses that are presently subtenants of the building while also protecting the public purse.
These reasons are public – but it is anticipated that the public will be excluded from most of the call in process to enable questions to be raised on the exempt report to Cabinet.
The meeting will start at 7.00pm, or after the conclusion of the scheduled meeting of the Budget and Performance Panel.
Members of the committee will have the opportunity to question the decision makers, make recommendations and potentially ask Cabinet to reconsider the decision.
Other options available are to refer the matter to full council who, after debate, can accept Cabinet’s decision or refer it back to Cabinet for reconsideration.
Alternatively the committee can decide to take no action, in which case the decision will be implemented.
It is interesting that the Council's Cabinet and Overview and Scrutiny Committe are making decisions that directly affect businesses located at the Storey but at no time have any of those businesses been consulted. The companies at the Storey understand better than anyone the issues that caused the financial problems and have clear ideas on a way forward for the building but continue to be ignored.
Additionally the Overview and Scrutiny Committe should also be considering the following questions:
Why did the City Council pay the insurance bills and a utility bill for SCIC in mid 2011? A situation that may lead to CC being forced to take on the large debts of a limited company as there's a precedent for settling creditors bills.
Knowing that SCIC was unable to pay its bills in mid 2011 why did the CC not take further action to protect its interests?
Who and why was a decision taken to grant the loan without a clear due diligence process? The Chief Executive had expressed doubts about the credibility of the leadership of the Ltd company but failed to put in place clear conditions such as a place on the Storey board for an officer.
Why was the decision taken to grant the loan without democratic accountability? Opening it up to scrutiny could have saved at least four more months of losses and inaction.
Why did the council officers consulted in Dec 2011 share the view that tenants should be retrospectively invoiced over £100,000 when they weren't responsible for the problems at the Storey?
There are more serious questions but these can be saved for later.