Council are acting beyond its powers by giving £16m plus to the two companies it owns
Folkestone & Hythe District Council have acted beyond their powers (ultra vires) by allowing in excess of £16 million to be paid to companies in which they allege they are the sole shareholder. There is no mechanism, or rather process or procedure within the council’s constitution; which allowed them, or allows them, to continue giving Otterpool Park LLP, or Oportinitas Ltd, any money whatsoever.
The processes and procedures as set out in the constitution; which is the council’s legal framework document, are those which they MUST follow by law.
The Constitution includes:
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the rules that the Council must follow
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how decisions are made at meetings and committees
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the Code of Conduct
Has someone complained?
Yes.
Would they be relying on the GPC in the Localism Act to permit this?
Your slightly missing the point. In the Local authority company guidance ; which is a toolkit for undertaking strategic and governance reviews of wholly or partly owned council commercial entities, such as Oportunitas Limited or Otterpool Park LLP, it states at Paragraph 3.3
The council’s shareholder role
The council must have a designated “shareholder” to represent its ownership of the entity. The process for appointing a shareholder needs to be set out in the council’s constitution which should also detail how the shareholder reports on the exercise of delegated powers.
There is no process in the council’s constitution so it cannot be a shareholder in any company, its own or others. Take a look at Thurrock or KCC Constitution, they have companies and the process for appointing a shareholder is in their respective constitutions.
I have asked a question under the FOI Act and await a reply.