1. Noted that the West Herts Crematorium Joint Committee has resolved to agree to the adoption of a Lead Authority model for the future operation of the Joint Committee
2. Agreed that the Lead Authority model be adopted and that Three Rivers District Council be the Lead Authority.
3. Agreed that a new Joint Committee Agreement be developed along with any other legal documents required to facilitate the new governance structure and delegates authority to the Strategic Director (Corporate and Commercial Services) in consultation with the Assistant Director, Legal and Democratic Services and the Council’s nominated member of the Joint Committee to finalise and complete the new Joint Committee Agreement and any other legal documents required.
1. That Cabinet notes that the West Herts Crematorium Joint Committee has resolved to agree to the adoption of a Lead Authority model for the future operation of the Joint Committee
2. That Cabinet agrees that the Lead Authority model be adopted and that Three Rivers District Council be the Lead Authority.
3. That Cabinet agrees that a new Joint Committee Agreement be developed along with any other legal documents required to facilitate the new governance structure and delegates authority to the Strategic Director (Corporate and Commercial Services) in consultation with the Assistant Director, Legal and Democratic Services and the Council’s nominated member of the Joint Committee to finalise and complete the new Joint Committee Agreement and any other legal documents required.
Building strong and vibrant communities Ensuring economic growth and prosperity Ensuring efficient, effective and modern service delivery
Statutory Officer Comments:
The proposed governance framework is appropriate to ensure that the two crematoria can operate efficiently within a sound legal structure. The Joint Committee Agreement will be developed to ensure that each authority’s obligations, liabilities and share of any surplus are clearly defined and agreed. This will be developed with support from external solicitors who will help to ensure that a balanced approach is agreed across the partnership.
Deputy s151 Officer:
The single lead authority structure should provide a clear transparent approach to operations reporting and governance, with the board overseeing key decisions making. The Joint Committee Agreement that will be developed, by the partnership, will provide greater detail of the shared financial risks and rewards and will also set out a clear reporting and performance monitoring framework.
Farida introduced the report and said that it set out different options for governing the West Herts Crematorium and approval was sought for the preferred option, which was to have a lead authority model, that lead authority would be Three Rivers Council. They had volunteered for the role so advise was sort from Anthony Collins solicitors and they did propose different options on how the West Herts Crematorium could be governed however they advised that the proposed model was the most efficient and most economically viable.
Delegation was also sought to set up a new joint committee agreement, which woul be more formal than the working arrangements that they currently had, especially with the new crematorium being built at Bunkers Park this would be needed.
Cllr Williams asked if this would be on similar lines to the 5 members from the 5 councils and the appropriate support for that.
Farida said it would.
Cllr Williams asked Nigel Howcutt if anything from a financial perspective now that the new crematorium was on our land.
Nigel Howcutt said that this paper was outlining the decision for Three Rivers to be the lead authority, which made sense as they were already operating one of the 2 sites involved in the committee, this seemed logical and sensible rather than setting up a new entity in another local authority names. The next step was around those detailed legal agreements of how the new committee agreement will set out, that would require a lot more work and approval, going back to the member sits on the committee, Terry Douris and making sure that they were happy as an organisation with the new terms agreed. They do not see them being vastly different in terms of benefits, risks and liabilities but they will be nuanced in there, bringing them up to date with current legislation, legalities as well as issues around the pension schemes for the risk and liabilities. On tha basis of 5 partners, equal partnership, equal involvement, equal risk and equal profit share. In terms of exactly how it would work has yet to be decided. From there perspective they were not perceiving any significant change going forward but the details were yet to be formalised or even proposed at that point in time.
Cllr Barratt asked if it would be like a business that they were 20% share of.
Nigel explained that that was essentially how it was set up at the moment and when they were having difficulties some years ago all 5 partners put money on, equal partners, equal share and equally now at the moment they all gain equal payment from the dividend from that site. What would work slightly differently would be that they would now be a land owner and Three Rivers were land owners they would get additional payments from the use of the land, which means partners will have a slightly different arrangement but reflects what they will have invested in it. Now they would have the land that the new crematorium sits on so they will get a rental income for that and some peripheral services will be used at the cemetery next door.
Cllr Barrett asked if Three Rivers would get an income from the additional crematorium site.
Nigel Howcutt said that they would get exactly the same rental agreement they Dacorum would get for ours. From that perspective there was a parity in terms of what they would put in they would get a similar return.
Cllr Barratt asked if there was a lease from the authority to the consortium as it were.
Nigel Howcutt explained that as part of the agreement they would arrange a lease, currently they have a license to build on the site and the idea was that they would offer that up until the point there was a crematorium built on that site, then there would be a lease and they could talk about ownership, the risk of liabilities, insurance etc. That would all be dovetailed into the new agreement that will be set up. Members, via the lead member for the crematorium would be involved in those discussions and the final approvals. The West Herts Crematorium Joint Committee would then approve it but after the members from each authority have had a chance to feed into that.
Cllr Barratt asked if any surplus was to arise would that be a taxable surplus.
Nigel Howcutt responded that at this moment they were set up in a strange situation with historical nuances, their profit is put into a reserve on the bottom line, it seemed that it was a community interest, which is part of the reason having to look at this agreement and the legalities behind it. Part of the reason they have a licence on the site was because they need to have an agreement in place and the legal basis of the new agreement before they do a long-term lease. It around tidying ups some of the governance arrangements that have been in place for many years, bringing it up to speed and where they want it to be with the other 4 partners also.
Cllr Williams said that now they have the facility on their own land and more stake in game it was appropriate that they have an arrangement in place.
Nigel Howcutt agreed and said that this group previously made the decision that they were going to have a partnership in the delivery of the crematorium, which meant that they have the expertise of Three Rivers, they’re bringing reduced risk as they have got their partners that are sharing that risk but they were delivering a new community service to the residents of Dacorum, from that perspective they get a lot out of it. They get a lot of support and equally will have a very transparent arrangement for future profit shares. If the entity grows like they expect it too in the business case it would make profit in future years, at which point they would get a share of that profit as well as delivering an additional service to the residents. They could argue they would get slightly more out of it than other partners that do not have the crematorium on their land.