Meeting documents

That the Council Executive:-

2.1 Note the proposed internal performance management and monitoring arrangements outlined in paragraph 4.4 and the existing delegations to officers outlined in paragraph 4.5; and

2.2 Delegate to the Executive Member for Resources, in consultation with the Executive Member for Leisure and Tourism, authority to deal with all matters relating to claims in connection with the project subject to the limitations outlined in paragraph 4.4 and 4.5.

3.1 The Council Executive at its meeting in September approved a budget for the management of the project until December 2005 and noted that a further report would be submitted to it once more was known about the scale and potential recoverability of costs incurred by the Council in respect of the Bath Spa project.

3.2 Council at its November meeting considered the position on funding work on Spa claims as part of the report on the Capital Programme Review. Included within that report were financial costings and proposed funding sources.

3.3 Whilst no prediction can be made as to the overall financial position once all claims have been dealt with, it is clear that the Council must obtain and consider the best available expert advice as to the prospect of successful claims being made both by and against it in order to fulfil its fiduciary duty to its council tax payers.

4.1 Shortly prior to the ending of the contract between the Council and Mowlem, specialist litigation lawyers were engaged to seek to ensure the maximum prospect of recovery of costs incurred by the Council in connection with the project and to minimise the prospects of the success of any claims to be made against it. They have since this date been engaged in reviewing correspondence/files and so on and advising on how to prepare for proceedings. To enable clarity of accountability and responsibility, since the summer the management of the Spa project has been effectively split into two projects. The first of these is the ongoing management and completion of the building ("the build"); the second of these is the preparation for litigation in connection with difficulties encountered in getting the Spa completed ("claim").

4.2 Since 2003, a project board had been established for the purpose of internal management and control of the project comprising appropriate officers and members to deal with both "build and claims". This board has been constituted in accordance with the Council's approved requirements for project management. Since July of this year, in accordance with those guidelines, an embryo project board has been established in connection with the management of the claims and its terms of reference on a membership and administrative arrangements have now been settled. Details of this are attached for information at Annex 1.

4.3 The main focal point for the management of all claims related matters will be this project board. It has been the Board's responsibility to ensure that a programme is established, that decisions are taken in accordance with the Council's constitution and that all necessary information is available to decision makers.

4.4 In broad terms, it is anticipated that the majority of day to day or routine decisions in connection with the claim will be taken by officers, consulting where necessary with relevant Executive Members. Decisions with significant financial, legal or policy considerations that are within approved budgets will be taken by the appropriate Executive Member in accordance with the Council's executive rules.

4.5 The Council Executive will receive a report for information on a quarterly basis and will also need to make any decisions where there are significant financial aspects which require Executive approval under the Council's budget management rules. Major matters which fall outside the Executive's approved budget will require the approval of Council.

4.6 It is vital to ensure the council's interests are protected and that there is the maximum prospect of successfully pursuing and defending claims that nothing is placed in the public domain which would be detrimental to the Council's position and compromises chances of success in them. This has to be balanced with the need to ensure proper accountability and openness of decision making and it will be the responsibility of the project board to ensure that as much information is made available to interested parties as can be consistent with the need to ensure the Council's position is protected.

5 RISK MANAGEMENT

5.1 The proper management of risk is an integral part of the proposals contained in this paper.

6 OTHER OPTIONS CONSIDERED

6.1 An option considered by the project board was for there to be a small dedicated committee of the Executive comprising three members. Whilst it was recognised that this would be the more usual method of managing claims of this nature, it was not considered that there was any particular advantage in terms of public transparency in so doing (given the likely exempt nature of the proceedings) and that there were disadvantages in terms of the efficient administration of the claims.

7 RATIONALE

7.1 The rationale is set out in the report.

8 CONSULTATION

8.1 Consultation has taken place with the Chief Executive, Major Projects Director, Resources Director, Head of Democratic Services and relevant Executive Members.

Printed on recycled paper

ANNEX 1

TERMS OF REFERENCE FOR THE SPA CLAIMS

PROJECT MANAGEMENT BOARD

Membership

> Committee Members:

> Reporting Officers/Advocates

Terms of Reference

1. To devise and monitor the Council's strategic approach to Spa Claims.

2. To control, monitor and approve claims being negotiated, adjudicated or litigated.

3. To report to the Council Executive and Council as necessary.

4. To advise the Executive and the S151 Officer of Claims received/to be made, potential gross and net liabilities related thereto, and the ongoing progress and overall financial implications and risks of such Claims.

5. To ensure the Council's External Auditors are kept informed as necessary.

6. To devise, monitor, approve and review a programme or programmes of activity relating to claims.

7. Within parameters set by the Council and the Executive, to approve, monitor and review as necessary a budget or budgets concerning claims and related expenditure.

8. In all other respects to function so far as is appropriate in accordance with the Council's approved project management arrangement.