Issue - meetings

Consideration was given to the Review Report of the Dragonfly Companies and presentation made by Local Partnerships. 

The Leader introduced the item confirming the background to the decision to seek an external review of the Dragonfly Companies by Local Partnerships and her promise that the report would be made public and considered by Council.  The representatives from Local Partnerships comprised Simon Bandy and Vivien Holland in person to present the report.  In addition, Michael Coughlin was introduced to the Council via Teams.  Mr Coughlin is a consultant who has been commissioned to support the Council going forwards.

The presentation included:

Summary of findings and recommendations

Summary of findings and recommendations confirmed that the review had identified several significant issues which related to:

·       Building blocks of good governance – including the lack of clarity of purpose which caused confusion and conflict between the Council and Companies including the lack of an up to date, comprehensive company  business plan which should follow on from the business case and would clearly define how the Companies would deliver the Council’s requirements and could be used as a basis for monitoring performance. 

·       Difficulties in the working relationships between the Companies and the Council as a result of the aforementioned governance issues.

It was confirmed that the following conditions would need to be met if it was decided to retain the Companies:

·     The Council should ensure it had additional management resource and clienting capabilities.

·     The Companies would need to ensure there was sufficient resource including a dedicated finance function.

·     Clarity of purpose as set out in a refreshed and more comprehensive business plan for both Companies.

·     Creation of a working group to re-set the relationship between the Companies and the Council which should be underpinned by an operating agreement which both parties should sign up to.

·     Changes to the Company Board membership.

·     Adherence to all Company rules including reserved matters had to be assured.

·     A more robust framework in place around meetings including regular meetings of the senior management of both Companies and the Council to underpin an improved working relationship.

The steps and conditions needed in the event the business case review suggested there was no role for the Companies, and they were dissolved.  The Council must ensure it had the:

·       capacity to support a working group to lead the transition;

·       capability (or plans to acquire it) to deliver the services in-house;

·       ambition for any continued development which would not exceed the Council’s own limits;

·       financial resources sufficient to cover any TUPE implications and other staffing implications;

·       resource and due diligence relating to the transfer of contracts from the Companies to the Council;

·       a clear stakeholder and staff plan was needed; and

·       that any potential adverse financial implications were understood.

The detailed recommendations related to:

·       Purpose of the Companies, including the need for a business case and business plan.

·       Changes to the Shareholder Board to make it into a formal committee.

·       Reserved matters ensuring that control through reserved matters was actioned.

·       Conflicts of interest for  ...  view the full minutes text for item 28

Further to the report contained in the agenda, Councillor John Ritchie, Portfolio Holder for Devolution & Local Government Reform and Chair of the BDC Dragonfly Shareholder Board, read out the following statement.

“On 13^th September 2024, the Council’s Statutory Officers attempted to take a

report to the Council’s Shareholder Board.  The report outlined several concerns and felt it important that these were raised with Members.  The Dragonfly Chief Executive requested the matter be withdrawn from the agenda in order to have time to respond to the issues raised.

Immediately following this, on 23^rd September 2024, the Dragonfly Chief Executive presented a report to the Dragonfly Board of Directors requesting a restructure of the senior management structure of the company, including the role of Chief Executive.  The report, which was approved by the Board of Directors, requested approval to commence consultation with staff the very next day (24^th September 2024).  As these decisions fell within Reserved Matters, this raised further concerns.  In view of this, and following advice from the Council’s external auditors Forvis Mazars, the Council’s Shareholder Board held an urgent special meeting on 30^th September 2024.

At this meeting, it was agreed an independent review of the Dragonfly companies should take place.  A scope for the review was drafted and shared with the Dragonfly Board.  Local Partnerships were requested to undertake the review due to their extensive experience in carrying out these types of reviews.  They are owned by the Local Government Association, the Treasury and the Welsh Government.

Local Partnerships commenced the review at the end of March 2025, with the final report received on 30^th May 2025.  The report was published in its entirety as promised by the Leader, without delay, on Monday 2^nd June 2025. Councillor Yates committed to undertaking the review and publishing it immediately upon her election as Leader earlier this year.

The review report is attached at Appendix 1 to the report in the agenda, and you will find a summary of the key findings on pages 4 to 6.

Paragraph 1.3 onwards outlines a summary of the key findings.  The review has identified several significant issues which relate to the following two areas of governance:

1)    Building blocks of good governance; they identified many instances where good governance is absent or not fit for purpose which are summarised below:

·       the lack of a clarity of purpose which causes confusion and conflict between Council and companies.  This is the foundation for all other issues

·       the lack of an up-to-date, comprehensive business plan, following on from the business case, which clearly defines how the companies will deliver the Council’s requirements and which the Council could use as a basis for monitoring performance, financial & physical

·       the lack of suitably robust governance framework including Company Board composition and skills

·       Shareholder Board prominence and not being part of the committee system

·       clienting capacity and capability within the Council and capability gaps in the companies and governance bodies

·       the presence of conflicts of  ...  view the full minutes text for item 107