City council urged to drop councillors from boards of companies

Nottingham City Council has been urged to remove councillors from the boards of its wholly-owned companies.

Elected councillors are on the boards of all council-owned companies, including Nottingham City Transport, Robin Hood Energy, and Enviroenergy.

In August, a public interest report into the financial failures at Robin Hood Energy found: “It is not seen as good practice for councillors to be on the boards of local authority companies, with other mechanisms used to ensure that the company meets the council’s policy objectives.

“Having councillors on company boards can lead to a failure to properly separate the two sets of interest – of the company and of the council – and it appears that this occurred in relation to the expectation that the Council would continue to fund RHE indefinitely.”

Today (Monday, October 5), at a full council meeting of Nottingham City Council, the leader David Mellen was asked by a member of the public about the role of councillors on boards.

The question said: “It is recognised, particularly in the recommendations, that having councillors on company boards is not specifically forbidden, but can the leader please comment on this statement, particularly why the council is proposing to go against what the auditor considers to be best practice by in fact retaining councillors on boards?”

In response, councillor Mellen, who represents the Dales ward for Labour, said: “We have a clear commitment to ensure all board members have the required knowledge and experience to challenge the management of companies.

“At no point did (the auditor who published the public interest report) say ‘don’t use councillors on the boards of companies’.

“We have done so for many years in different companies, like Nottingham City Transport, which has been judged bus operator of the year a number of times.

“I am committed to ensuring we continue to move in the right direction. Although we do not for a moment underestimate the challenges involved it is right we review our overall approach to using councillors on boards, training and supporting them appropriately.

“Acknowledging it is not the place for councillors to be industry experts , but to bring their knowledge and electoral mandate alongside other directors so that in aggregate they have the skills and knowledge to hold company managers to account.

“We know the first hand benefits in accountability of having local people elected by Nottingham residents on company boards.

“Essential training will be mandatory, and retention of roles will be dependent on the completion of necessary changes.”


Nottinghamshire Live – Local News