CLEC Inquiry: Koragate and what went so wrong

The County Council is conducting an inquiry into procedural mistakes made with the Cambridge Library Enterprise Centre decision (now rescinded).

The Chair of the Council’s Audit & Accounts Committee, Cllr Mike Shellens, has called for submissions from the public as well as from councillors. If you would like to contribute, please email your submission to [email protected] The deadline has been set as 17th August but it is hoped this will be extended, given the holiday period. The deadline is 24th August. For full details of how to participate, see the County Council’s website.

Here is my submission:

Cambridge Library Enterprise Centre

Introduction
I write as a member of the Highways & Community Infrastructure (HCI) Committee. Since May 2015 I have been the Liberal Democrat spokes on that committee, which has responsibility for the Library Service amongst other functions. I was previously spokesperson for libraries in 2013-14 when libraries came under the Resources portfolio.

Background
Some time in 2013 Kora-Regus approached Cambridgeshire County Council with a proposal to create an enterprise centre on the third floor of Cambridge Central Library. Despite being the spokes for most of 2013, I was unaware of the CLEC proposal until it was presented to us in our agenda pack for the HCI meeting of 17th March 2015. This was about a week before the committee meeting at which we were being asked to take a decision. Cllr Susan van de Ven, our spokes at the time, told us that she had only been made aware of the proposal late February 2015 at a spokes meeting. The item had been marked confidential.

Given that officers had been in discussion with Kora since 2013, it is inexcusable that this was kept secret from most members for such a long time, not only because of the lack of transparency but also because we did not have enough information to make a decision. I also question why our spokes was asked to keep the matter secret: how could she possibly have briefed or taken soundings from our group?

I was inclined not to support the proposals for the following reasons:
we had little background on Kora and no evidence of its effectiveness
the case for closing the library café was weak
there had been a complete lack of consultation with library users or the general public

I shared my concerns with Lib Dem colleagues Barbara Ashwood and Susan van de Ven when we met to discuss this and other agenda items – our usual practice before a committee meeting. We agreed on questions which we would put to officers before the meeting, and that at the meeting we would ask to defer the proposal until we had a presentation by Kora and public consultation.

On March 17th , our amendment requesting consultation and working up of alternative options was lost and the CLEC proposals were passed, with 12 members for and 1 against (myself). Three other members (Ashwood, van de Ven and Kavanagh) abstained.

We requested a decision review by General Purposes Committee. That committee’s 14th April meeting was attended by several members of the public and by Julian Huppert MP, whose support we had sought. A 3,000 signature petition against the plans was presented by Sara Payne. GPC referred the item back to HCI for reconsideration following consultation and more information from officers.

Following the meeting, officers arranged a presentation for councillors by Kora’s Global MD Roger Perrin, and a public meeting on the CLEC on 6th May. The councillor presentation did nothing to allay my doubts about Kora’s competence: I asked Mr Perrin what research he had done into his potential client base in Cambridge and what evidence he had of demand for additional enterprise centre services. He told me that no research had been carried out.

At the end of May, a FoI request response exposed the fact that officers had held no fewer than 37 meetings with Kora. The County responded very late, just a few days before the 2nd June HCI meeting at which the proposals were reconsidered. The series of meetings was referred to during the debate by the public speakers as well as by councillors. Despite robust and well argued opposition from councillors plus the public, the proposal went through again, although this time the vote was close: 7-6 in favour.

We called the decision in again, this time to Full Council. On 5th June, there was another important revelation: a local blogger, Phil Rodgers, published his findings that Roger Perrin, who styles himself ‘Global Managing Director’ of Kora, was disqualified from being a director in the UK and had already had one business fail, leaving over £1.5 million of debt.

This resulted in the proposals being suspended and in the chair of HCI calling a special meeting to review the decision in the light of the new information. The committee met again on 26th June and rescinded the decision. This time the vote was unanimous, apart from the Labour committee member, who questioned whether the committee retained powers to revoke the decision, given that there had been a Full Council call-in. (This is a moot point and should be clarified in our constitution.)

Political and democratic context
This proposal has attracted an extraordinary level of public engagement:
three demonstrations against the proposals outside Shire Hall and Central Library
a 38 Degrees petition with nearly 4,000 signatures
campaign group with over 200 supporters on Facebook as well as petition signatories
Freedom of Information requests
research into Kora
big attendances at council meetings
public speakers
an unprecedented number of correspondence with councillors – email, phone calls and letters
high volume of comments, both in the public consultation and in the library comments book

Despite well researched and presented arguments, opposition to the proposals was on the whole politely ignored by the Conservative members of the committee.

What went wrong?
Leaving aside the merits or otherwise of giving up library space to create an enterprise centre, there were several flaws in process:

Lack of competition
Officers pursued an unsolicited proposal from an unknown company without offering the opportunity to other bidders.

Secrecy
A senior officer signed a confidentiality agreement, which compromised her.
The CLEC proposals and negotiations were not divulged to councillors until as late as possible, despite meetings having been taking place since December 2013.
There had been no consultation whatsoever with the public or even with library users.
The only justification for the suppression of information was that the company had requested confidentiality. The secrecy clearly advantaged Kora as it kept the field clear for them, but the officers should not have agreed to withold information from council members.

Poor reporting
Councillors were expected to take a decision on inadequate facts – there was some sketchy information on Kora, the preferred partner but hardly any on the two alternative options. The financial projections were dubious and, as my colleague Cllr Jenkins showed at the third meeting, did not compare like with like when assessing Kora alongside the in-house options; they also failed to take into account existing income from room lettings. Effectively, we as councillors were not equipped to do our job.

Standards
Kora-Regus has a poor reputation amongst existing users and avoids paying tax in the UK. Although they act within the law, it is questionable whether an organization that avoids paying its taxes is an appropriate partner for a local authority.

Lack of due diligence
The Council should have checked the credentials of Kora and the chief negotiator more thoroughly. Given that it was prepared to commit public money to reconfiguring the library in preparation for the CLEC, the Council should also have researched the viability of the project, or required evidence from the partner company of unmet demand for enterprise centre services and that the projected income would materialize.

Amanda Taylor
Cambridge
August 2015

TIMELINE (including links to minutes and web posts.)

2013
December CCC holds first meeting with Kora

2015
Late February Party spokespeople briefed
w/b 9th March HCI members presented with report for decision on 17th March
17th March HCI committee CLEC #1. Passed 12-1.
14th April General Purposes Committee. 38 Degrees petition presented. CLEC decision reviewed.
28th April Kora presentation to councillors at Shire Hall
6th May Public meeting on CLEC at Central Library
29th May FoI request response reveals 37 private meetings between Kora and CCC
2nd June HCI committee CLEC #2. Passed 7-6.
5th June CLEC suspended after revelations Roger Perrin was serving a disqualification
26th June Special HCI meeting CLEC #3. Rescinded 12-1.