The Executive, on 14 July 2016, authorised the Sub Committee to take on the responsibility of majority Shareholder in relation to the company (Pathway for Care) that was subsequently incorporated with Companies House. It was noted that the Council had an 80% shareholding in the Company and T7 would have the remaining 20% balance of the shareholding upon the completion of a number of landmark achievements.
The Sub Committee noted that it was responsible for determining how to manage its Shareholder Responsibilities (in preparation for the forthcoming Shareholder meeting of the Company). Associated with those responsibilities the Sub Committee noted that the following needed to be in place to support the work of the company:
• Letter of Comfort
• Shareholder Agreement
• Business Plan
• Reserved matters required from the Articles or Shareholder Agreement
• Directors Service Agreements
• Resourcing agreement
• Loan/Draw Down agreement
• Articles of Association
The Sub Committee was requested to approve the documents with the exception of the Directors Service Agreements which would be considered at a future meeting. It was also noted that the Letter of Comfort, Shareholder Agreement; Business Plan, Reserved matters, Resourcing Agreement and Loan/Draw Down Agreement were set out in the exempt part of the agenda (Part 2).
The Leader advised the Sub Committee that the Articles of Association would in effect be the constitution of the company covering the basic operating parameters of the new organisation. The Articles had been derived from the model articles of association adjusted to reflect the shared ownership of the business.
The Leader elaborated further on the background to why the Directors Service Agreements would not be considered at this meeting as the officers would be seconded into the company and the company would pay the Council for their time. As a result the officers’ remuneration would not change at this point, though it was envisaged that in time this may change as the balance of Council and company funding for key posts became different with the potential for the company to take on more responsibility for funding staff. As that position became clearer the issue of Directors Service Agreements would be a matter for the Sub-Committee to consider.
Related to this was the Resourcing Agreement, which explained how the Council would be reimbursed for officer time, accommodation and support services etc. as set in part 2 of the agenda.
(i) the following agreements and plans, that are the Shareholder responsibility for the Health and Well Being Sub Committee, be agreed (on behalf of the Council):
• Letter of Comfort (provided to the Board of Pathway to enable them to progress with registering the Company with Companies House and the Care Quality Commission) - set out in Part 2 of the agenda;
• Shareholder Agreement (as set out in Part 2 of the agenda) between the Company, T7 Group Limited and the Council including:
o the current Business Plan and
o the Loan/Draw Down agreement
• Reserved matters required by the Articles of Association or Shareholder Agreement
• Resource agreement (set out in Part 2 of the agenda)
(ii) the Head of Legal Services be authorised to finalise the above documents; and
(iii) the Articles of Association be approved (on behalf of the Council as shareholder) as presented at Annex 1 to the report (to be considered at the Shareholders meeting to follow the Sub Committee meeting).
Reasons for decision:
To approve the Shareholder responsibilities that have been delegated to the Sub Committee from the Executive to enable the Company (Pathway for Care) to take forward its operations.
Asking Officers to review the documents that form the Sub Committee’s responsibilities as Shareholder further and present them to a future meeting taking on board any comments at the meeting.
To offer comments on the draft documents and authorise the Head of Legal Services to agree/finalise the documents taking on board the comments of the Sub Committee.