All reports 1. Governance Service receive draft report Name of GO Jeremy Williams. Date 06/12/11. Date 06/12/11

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1 DELEGATED POWERS REPORT NO SUBJECT: Barnet First Limited Company Incorporation Control sheet All of the following actions MUST be completed at each stage of the process and the signed and dated report MUST be passed to Governance Service for publishing All reports 1. Governance Service receive draft report Name of GO Jeremy Williams Date Governance Service cleared draft report as being constitutionally appropriate 3. Finance clearance obtained (report author to complete) 4. Staff and other resources issues clearance obtained (report author to complete) 5. Trade Union response received (Staffing issues only) 6. Legal clearance obtained from (report author to complete) 7. Policy & Partnerships clearance obtained (report author to complete) 8. Equalities & Diversity clearance obtained (report author to complete) 9. The above process has been checked and verified by Director, Head of Service or Deputy (report author to complete) 10. Signed & dated report, scanned or hard copy received by Governance Service for publishing 11. Report published by Governance Service to website Name of GO Maria Lugangira Date Name of Fin. officer John Hooton Date Name of Res. officer John Hooton Date Name of TU rep. N/A Date Name of Legal officer Sheila Saunders Date Name of P&P officer Julie Pal Date Name of officer Julie Pal Date Name Kate Kennally Date Name of GO Paul Frost Date 06/12/11 Name of GO Paul Frost Date 06/12/11 Officer reports: 12. Head of Service informed report is published and can be implemented. Name of GO Date N/A Cabinet Member reports: 13. Expiry of call-in period Date N/A 14. Report circulated for call-in purposes to Name of GO N/A BMOSC members & copied to Cabinet & Head of Service Date

2 ACTION TAKEN UNDER DELEGATED POWERS BY OFFICER IN CONSULTATION WITH CABINET MEMBER (S) (EXECUTIVE FUNCTION) Subject Officer taking decision Barnet First Limited Company Incorporation Director of Adult Social Care and Health Date of decision 02 December 2011 Summary Officer Contributors Status (public or exempt) Wards affected Enclosures As a part of the establishment of the Local Authority Trading Company (LATC), this report records the decision to incorporate Barnet First Limited as a temporary shell company within TheBarnetGroup LTD to facilitate the establishment of the TheBarnetGroup LTD. Once Barnet Homes Ltd has been incorporated as a subsidiary to TheBarnetGroup LTD, Barnet First will be dissolved.. Richard Harrison, Project Manager Public (with separate exempt report including Appendix 1, 2 and 3) All None Contact for further information: Richard Harrison, Project Manager, Corporate Services Directorate, Serial No. 1509

3 1. RELEVANT PREVIOUS DECISIONS 1.1 On 12 July 2011, Council approved Adults In-House Services (More Choices) Appointments to the Shadow Boards for the Local Authority Trading Company (LATC) Holding Company and the Adult Social Care LATC Subsidiary (Your Choice [Barnet]), (decision item 19). It was resolved Council confirmed; The LATC Holding Company Shadow Board and the Membership of its Shadow Board as set out below. LATC Holding Company Shadow Board Cabinet Member for Adults as the Council Representative LBB Director for Adult Social Services and Health as the Council shareholder representation The Adult Social Care (Local Authority Trading Company) LATC Subsidiary shadow board and the Membership of the subsidiary Shadow Board as set out below. Adult Social Care LATC Subsidiary Shadow Board Assistant Director for Strategic Finance as a Non-Executive Director Head of Strategic Commissioning and Supply Management for Adult Social Care and Health as Non-Executive Director LBB LD Service Manager as the Operational Director. 1.2 On 24 May 2011, Cabinet Resources Committee approved the Adults In-House Service Review Business Case and initiation of a full business plan (decision item 12). It was resolved; That the Cabinet Resources Committee approved the Adult In House Services Business Case, in order that the Council can: Appoint a LATC shadow board to begin contract negotiation between the Council and LATC Set up a holding company in the form of a Local Authority Trading Company (LATC), of which Barnet Homes would be a subsidiary Set up a subsidiary LATC for the management off those Adult Social Services currently provided in-house. Transfer the adult social care service provision from the management of the Council to the LATC following approval of the business plan. 1.3 On 14 November 2011, a delegated powers decision was taken by the Director of Adult Social Care and Health to enable the formation of TheBarnetGroup LTD (Delegated Powers Report No: 1492). The report authorised the following action through officer delegated authority; (i) That the appointment of the named interim director and company, secretary, as stated in the company formation questionnaire, is made, in order to incorporate TheBarnetGroup LTD; and

4 (ii) Following incorporation of TheBarnetGroup LTD the interim director will incorporate Your Choice (Barnet) Limited and shall be appointed as interim director of Your Choice (Barnet) Limited and shall also appoint the company secretary. The authorisation of Delegated Powers Report No: 1492 was based on the following; (i) (ii) The appointments are subsequently reported to the next General Functions Committee meeting (currently scheduled to meet on the 16 January 2012) for consideration; and The General Functions Committee determines whether to ratify the appointments. 2. CORPORATE PRIORITIES AND POLICY CONSIDERATIONS 2.1 As outlined in the Council Corporate Plan the authority is seeking an alternative delivery vehicle for services currently provided in-house by Adult Social Services. This will achieve the strategic objective of creating a more customercentric council that enables customers to efficiently achieve the desired outcomes. 2.2 The implementation of a LATC is aligned with the One Barnet objective of a new relationship with citizens. Changing the way the Council is structured to provide Adult Social Services will promote choice and independence for residents. This is a strategic fit with the personalisation agenda; the latest statement of policy in the 2010 adult social care vision the ambition is to have all service users on personal budgets, preferably as direct payments, by This is aligned with the increase in the number of personal budgets as a priority outcome in the Adult Social Care and Health 2011/12 business plan. 2.3 Service users will be empowered to select the services they require from the open market. Implementation of a LATC and the Your Choice (Barnet) subsidiary will ensure the continued provision of Adult In-House Services, registered by the Care Quality Commission rated as Excellent or Good, within a free market environment. In turn this will leave the Council free to focus on becoming a commissioner of Adult Social Services as the core business of the authority thus providing a relentless drive for efficiency with the services which remain in-house. 2.4 The decision recorded in this report will enable the delivery of the strategic objective, set out in the previous paragraph 2.1, through the implementation of a LATC ( TheBarnetGroup LTD ), the first phase of which is the company set up in accordance with the resolution of the Cabinet Resources Committee of 24 May 2011 and Delegated Power Report (by officer) 1492 of 14th November RISK MANAGEMENT ISSUES 3.1 Risk: If incorporation of TheBarnetGroup LTD group structure, including Your Choice (Barnet) Limited, is delayed until after: (i) the 12 January 2012 Cabinet Resources Committee decision; and (ii) the decision of the Board of Barnet Homes

5 with respect to the inclusion of Barnet Homes Ltd within the group structure, there will be a detrimental impact upon the ability to establish the Local Authority Trading Company with effect from 1 st February 2012; there would be insufficient time after 12 th January and before 1 st February for a number of critical activities to be carried out. These activities are outlined in paragraph 3.3 below. Mitigation: To incorporate a dormant shell company Barnet First Limited as a subsidiary of TheBarnetGroup LTD for a period of up to 3 months to enable incorporation of TheBarnetGroup LTD and Your Choice (Barnet) Limited. Barnet First Limited will have the same interim director as TheBarnetGroup LTD and Your Choice (Barnet) Limited; the encumbent Director of Business Services for Barnet Homes will be the director of the companies within the Group. Once Barnet Homes Ltd has been incorporated as a subsidiary to TheBarnetGroup Limited, Barnet First Limited will be dissolved. 3.2 Risk: Inappropriate use of Barnet First Limited as a shell company within TheBarnetGroup LTD group structure. Mitigation: Barnet First will be a shell company for a limited period of time; for a maximum of 3 months to enable TheBarnetGroup LTD group structure to be incorporated. There is no requirement to undertake any activities and there will be no budget or authority in this regard. 3.3 Risk: Inappropriate use of TheBarnetGroup LTD, Your Choice (Barnet) or Barnet First Limited as the Articles of Association for all companies are unrestricted i.e. no restrictions are placed on the activities which any of the companies can undertake. Mitigation: The Council as sole shareholder has the ability to remove and replace the interim director of TheBarnetGroup who will, in turn, be entitled to remove and replace the interim director of Your Choice (Barnet) and Barnet First Limited. In addition the Council has agreed a defined list of tasks to be conducted by the interim director for TheBarnetGroup and Your Choice (Barnet). These are: VAT registration Care Quality Commission Registration Set up of bank accounts Payroll tax reference from HMRC for Your Choice Procurement of D&O insurance The tasks mentioned above in section 3.3 are not considered to be matters which are likely to give rise to public concern. 3.4 Risk: Lead in times for critical registration tasks such as Care Quality Commission (CQC) and HMRC could lead to a loss of business continuity affecting vulnerable service users of Adult Social Services. Mitigation: Incorporate TheBarnetGroup LTD, Your Choice (Barnet) Limited and Barnet First Limited with a sole Executive Director. This will be the encumbent Director of Business Services for Barnet Homes who will remain Executive Director

6 once Barnet Homes has been incorporated as part of TheBarnetGroup LTD group structure. Once this has been achieved, Barnet First Limited will be dissolved. 3.5 I have considered whether the issues contained in paragraphs are likely to raise significant levels of public concern or comment or give rise to policy considerations and consider that in the light of the proposed mitigation, they do not. 4. EQUALITIES AND DIVERSITIES ISSUES 4.1 Under the Equality Act 2010, the council and all other organisations exercising public functions on its behalf must have due regard to the need to: a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Act; b) advance equality of opportunity between those with a protected characteristic and those without; c) promote good relations between those with a protected characteristic and those without. The protected characteristics referred to are: age; disability; gender reassignment; pregnancy and maternity; race; religion or belief; sex; sexual orientation. It also covers marriage and civil partnership with regard to eliminating discrimination 4.2 The purpose of the project is to empower vulnerable adults to make choices about, and take control over, the social services they receive. Consequently creating an organisation which can support the implementation of the Personalisation Agenda should increase choice and control for individuals. 4.3 An initial Community Equalities Impact Assessment has indicated Neutral Impact and will be revisited at each major project milestone. It has however been recognised that as the authority move to a more consumer led model services could be subject to change if demand decreases in the long run. In this case further Equalities Impact Assessments will be conducted as part of any proposed change in order to mitigate potential risk of inequality. 5. USE OF RESOURCES IMPLICATIONS (Finance, Procurement, Performance & Value for money, Staffing, IT, Property, Sustainability) 5.1 The, proposed, interim director for TheBarnetGroup LTD, Your Choice (Barnet) Limited and Barnet First Limited is an employee of Barnet Homes Ltd, for which the Council is 100 per cent shareholder. No staffing issues have been identified for the Council or Barnet Homes. 5.2 There are no negative implications associated with ICT or property. 5.3 The costs of establishing and dissolving the shell company will not exceed 600 and a high level options appraisal has demonstrated that this is the most cost effective solution. 6. LEGAL ISSUES 6.1 Legal advice has been sought from the council s external legal advisors on the structural options explored during the development of the business case. Those

7 legal advisers have advised that TheBarnetGroup LTD cannot be incorporated with only one subsidiary. As Barnet Homes Ltd is not yet ready to be incorporated (it is awaiting the conclusion of Articles of Association), the advice given is that a shell company should be incorporated and dissolved as and when Barnet Homes Ltd is incorporated within the group. The company formation questionnaire will be completed in respect of the shell company, Barnet First LTD for registration with Companies House. 6.2 This will then allow the incorporation of the TheBarnetGroup LTD as per the DPR 1492 to proceed. Once it has been incorporated the interim director may provide the corporate authority necessary in order to incorporate Your Choice (Barnet) LTD. 6.3 The Articles of Association for Barnet First Ltd have been prepared by the external legal advisors. 6.4 Consideration will be given to the need, or otherwise, for a separate agreement between the council, Barnet Homes Ltd and the Director of Business Services for Barnet Homes with respect to the appointment of the Director of Business Services as Director and Company Secretary of all of the companies within TheBarnet Group. 7. CONSTITUTIONAL POWERS 7.1 The Council s constitution, Part 3 (Responsibility for Functions) paragraph 6.1 (General Powers Delegated to Officers) states that Chief Officers can take decisions, in consultation with the Cabinet Member concerned (or without consultation where it is a decision authorised to be taken by the Chief Officer that involves the implementation of an earlier decision of the Council or Cabinet or Committee or it is in respect of operational matters within the Chief Officer s sphere of managerial or professional responsibility and is not significant in terms of budget or policy): to discharge the functions allocated to them or dealt with by them or their staff, except for matters specifically reserved to Executive Members, Cabinet meeting, Cabinet Committees, Committees or Council; in all matters where they have managerial or professional authority; 7.2 This report is intended to implement the decision of Cabinet Resources Committee, 24 May 2011, as set out in paragraph 7.1 above, in respect of the setting up of the Local Authority Trading Company and to implement the decision of Delegated Powers Report No: 1492 to incorporate TheBarnetGroup Limited and Your Choice (Barnet) Limited. 7.3 In accordance with the General Functions Committee s terms of reference, set out in Part 3 (Responsibility for Functions) section 2 of the Council s Constitution, the General Functions Committee is responsible for the appointments of representatives to outside bodies. As such, the appointments recorded in this delegated powers report, will be reported to the next General Functions Committee, for the Committee to determine whether to ratify the appointments of the interim director and the company secretary to Barnet First Ltd.

8 8. BACKGROUND INFORMATION 8.1 The Delegated Powers Report 1492 sets out the structure for the Local Authority Trading Company. This will consist of a group model with a holding company TheBarnetGroup LTD with two subsidiaries Your Choice (Barnet) Ltd and Barnet Homes Ltd. although, initially, a shell company, Barnet First Limited, will be in the group in place of Barnet Homes Ltd. 8.2 The implementation date of the Local Authority Trading Company is 1 February 2012 subject to Cabinet Resources Committee decision on 12 January The establishment of Barnet First Ltd forms an essential part of the transition plan to establish the Local Authority Trading Company as set out below; (i) (ii) (iii) (iv) Barnet First Limited will be incorporated as part of TheBarnetGroup to establish the group structure as set out in Delegated Power Report An interim director for the entire group of companies; TheBarnet Group LTD, Your Choice (Barnet) Limited and Barnet First Limited has been identified and will be in place to enable critical activities to progress ahead of 12 January 2012 Cabinet Resources Committee and subject to approval from that committee go-live for TheBarnetGroup LTD on 1 February Subject to Cabinet Resources Committee on 12 January 2012 and Barnet Homes board approval on 13 January 2012, Barnet Homes will become part of TheBarnetGroup structure. Upon incorporation of Barnet Homes within The Barnet Group structure, Barnet First Limited will be dissolved. 9. LIST OF BACKGROUND PAPERS 9.1 Adults In-House Service Review: Initiation of Full Business Plan, Agenda item 12 presented to Cabinet Resource Committee on 24 May TheBarnetGroup LTD Company Incorporation, Delegated powers Report No: CONSULTATION WITH CABINET MEMBER(S) 10.1 The Lead Member for Adult Services has been consulted and has approved the establishment of Barnet First Ltd for the purposes of establishing the Local Authority Trading Company,TheBarnetGroup Ltd 11. OFFICER S DECISION I authorise the following action 11.1 That, following incorporation of TheBarnetGroup Ltd. the interim director shall incorporate the shell company, Barnet First Ltd and shall be appointed

9 as interim director and also appoint the company secretary of Barnet First Ltd; 11.2 The appointments referred to in paragraph 11.1 are based on the following: (i) (ii) That the appointments are subsequently reported to the next General Functions Committee meeting (currently scheduled to meet on the 16 January 2012) for consideration; and That the General Functions Committee determines whether to ratify the appointments DECISION OF DIRECTOR OF ADULT SOCIAL CARE AND HEALTH Signed Date 2 December 2011