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ITEM EX20

EXECUTIVE – 10 DECEMBER 2002

GTE FOR OXFORDSHIRE

Report by Director of Environmental Services

Introduction

  1. On 1 October 2002, the Executive gave in principle approval to funding GTE work through to the end of the "Project Authorisation" phase in 2005/06, and as part of this agreed a significant increase in capital funding for the GTE Project for 2003/04, with £800,000 identified for the scheme. This figure is subject to confirmation following the Government’s Single Capital Pot (SCP) allocation for the County and the division of this funding between budgets.

  2. The GTE Project is being run by a "Special Purpose Company" comprising 15 public and private sector partners, which own shares in the company and have directors on its board. These include the County Council, which is represented by Councillor Bill Bradshaw, who chairs the Company. At the time the GTE Project Company was set up, the Council placed the Company in the "bodies useful to the Council’s work" category, and it currently has "non-strategic" outside body status.

  3. Given the significant increases in County Council funding, it was agreed that further consideration needed to be given to the mechanism by which this funding is spent and the control procedures required to achieve this. I undertook to report back to the Executive on these matters and this is the principal subject of this report. The report also considers the need to change the status of the Company given the recent developments that have taken place.

    4. Background

  4. County Council funding previously allocated to GTE has been transferred to the Project Company in the form of a conditional grant, the condition being that the funding is spent on the GTE project, specifically the delivery of work outputs and targets clearly identified and agreed (for example the undertaking of the current Project Definition work programme).

  5. The Project Company was set up in a particular way, such that the combined participation of the local authorities involved (the City Council are also shareholders and have a director on the board) is less than 20% of both the total shareholding in the company and the total number of directors on the board. The reason for this is that exceeding this 20% figure would mean that local authorities would be deemed to have influence or control over the Company, which would mean the Company would effectively be viewed as an extension of the local authorities’ activity and, for example, expenditure of the Company would count as that of the local authorities involved.

  6. It is considered advantageous to maintain both the Company running the GTE Project, and the set up of the Company as described above, for a number of reasons:

    1. It allows the Company to operate independently of the County Council (for example appointment of consultants is not required to be undertaken via a tendering process);

    2. It provides a mechanism for private sector partners to join the Company and contribute funds to GTE – some £300,000 of private sector cash and work in kind has been contributed to the Company so far;

    3. It would maintain the genuine public-private sector partnership approach to GTE, which is advantageous in terms of drawing in private sector expertise, involving key local stakeholders in the development of GTE, and demonstrating an approach consistent with Government policy which has been successful elsewhere (for example, the recently-approved tram system in Nottingham was promoted along similar lines).

    Proposals

  7. Three means of achieving greater County Council involvement in the project are proposed, covering the project’s status, day-to-day officer and member input and the management of the proposed additional funding.

  8. Firstly, it is proposed that Council be recommended to agree that GTE should be given "strategic" outside body status. This is on the basis of:

    1. the significant additional (and ongoing) County Council funding agreed in principle for the project;

    2. the increased strategic importance of GTE, given for example the recently agreed strategy for the A40 corridor (which includes the GTE project as an essential element) and the close interrelationship between GTE and the development of the railway through Oxford (in particular the proposed relocation of Oxford Station);

    3. the increased likelihood of funding to implement GTE being bid for as a Major Scheme in the next Local Transport Plan.

    Should this change of status be agreed, the appointments to the GTE board will be within the gift of the Executive. If not, the appropriate recommendations will need to be made to Democracy & Organisation Committee, following consultation with the appropriate Executive Member and Scrutiny Chair(s)/Deputy Chair(s).

  9. It is felt that the second objective would be achieved by the appointment of an additional County Council representative to the GTE Company board. This would still allow the combined local authority representation to be within the 20% threshold identified above. Given the executive arrangements now in place, it is logical that the Executive Member for Transport be nominated as the additional member.

  10. Since Councillor Bradshaw was appointed (June 1999), Councillor John Dennis was appointed as his alternate to the board. Although this appointment was never formally terminated, it is considered to have come to an end at the County Council election in June 2001 (even though Councillor Dennis has since been re-elected to the Council.)

  11. The issue of an alternate raises the question that, if two County Councillors were to sit on the board of the Project Company, whether each would require an alternate. On balance, given the frequency of board Meetings and member involvement in the Company’s activities, it is felt that one alternate (who could substitute for either County Council board member) would be sufficient. Again, considering the Executive arrangements now in place, it would be logical for the Executive Member for Strategic Planning and Waste Management to be nominated as the County Council’s alternate Director.

  12. Both the appointment of an additional County Council Director and a new alternate Director would need to be endorsed by the board of the Project Company, which next meets on 20 January. I have no reason to believe that these appointments would not be accepted by the board; indeed they are likely to be welcomed as a reflection of the County Council’s increased commitment to the project.

  13. At officer level, responsibility for the GTE Project has recently transferred to the Sustainable Transport (Special Projects) Group within Environmental Services, as proposed in the report to 1 October Executive. This will allow the project to be managed alongside complementary proposals such as the County’s recently approved strategy for the A40 (which is partially predicated on GTE being delivered) and the Premium Routes study. Additional resources have been approved for this Group to strengthen the officer input to the project.

  14. Turning to the financial arrangements, it is proposed that funding agreed to the project be allocated to the Project Company in the form of a conditional grant, as previously. However, in order for the allocation and expenditure of this funding to be more closely monitored, the following is proposed:

    1. that the allocation for 2003/04, currently £800,000, is granted in up to four stages, with an initial allocation to be made in April 2003 (following approval of the capital programme in March) and further allocations on (for example) a quarterly basis, as required and agreed;

    2. that each allocation is more closely tied to specific project milestones and deliverables, to be agreed with the County Council directors on the board;

    3. that an annual report is submitted to the Executive, detailing how the funds have been spent in the previous financial year and outlining the funding required for the forthcoming financial year, for consideration as part of the annual capital programme.

    Conclusions

  15. Three means are proposed to secure greater County Council involvement in the management and development of the GTE Project:

    1. A change of status of the County Council’s designation of GTE, from a non-strategic to a strategic outside body. This will need to be agreed by Full Council.

    2. The appointment of the Executive Member for Transport as an additional County Council Director on the GTE board, together with the appointment of the Executive Member for Strategic Planning & Waste Management as an alternate Director for either board member. These can be agreed by the Executive subject to (i) above and would be subject to the approval of the GTE board;

    3. Introducing more stringent control and monitoring of how County Council funding granted to the Project Company is spent, to be agreed with the County Council Directors on the board and reported back to the board on an annual basis.

    Environmental Implications

  16. There are no significant implications arising from this report.

    17. Financial and Staff Implications

  17. The principal implications for the project were identified in the report to 1 October meeting of the Executive. There are no further significant implications arising.

    18. RECOMMENDATIONS

  18. The Executive is RECOMMENDED to:

          1. RECOMMEND the Council to agree the inclusion of GTE for Oxfordshire in the list of strategic outside bodies for the purpose of Section H of the Constitution;

          2. subject to (a) above, approve the appointment of the Executive Member for Transport as an additional County Council Director on the GTE board, together with the appointment of the Executive Member for Strategic Planning & Waste Management as an alternate Director for either County Council board member;

          3. subject to the finalisation of the Capital Programme for 2003/04, agree that the funding provisionally allocated to the project for 2003/04 be conditionally granted to the Project Company in up to four stages, with the amounts and conditions for each stage to be agreed by the County Council Directors on the board in consultation with the Director for Environment & Economy.

DAVID YOUNG
Director of Environmental Services

Background papers: Nil

Contact Officer: John Disley Tel: Oxford 810460

November 2002

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