We have received a number of questions about the halted South Warwickshire Merger. Answers are provided below.

1. Why was due diligence not undertaken before any resolution was reached to enter into the merger with Stratford District Council?

Due diligence was undertaken by a consultant working on behalf of the Local Government Association before the decision was made in December 2021 to make a submission to the Government. The report was one of the appendices to that December report. The due diligence report was concluded and reported to officers in May 2021. It was also presented subsequently to the Joint Arrangements Steering Group of Councillors overseeing the merger process from both Councils. That report recommended that SDC may want to undertake further due diligence on Milverton Homes. You will need to ask SDC why they waited till after the resolution was made to decide to do that. SDC have said that it was due to the discovery of new information, but they clearly misunderstand the content of the Treasury Management Strategy published in February 2022 and actual agreed transactions. Milverton Homes has only had one transaction and the decision on that involving  a loan from WDC was made in April 2021. If they had done the due diligence as originally recommended before the December decision, then that would have been known. SDC were aware of the work being done by Milverton Homes, as it expressed a clear interest in it doing some work in the SDC area. You may want to see the report that has just been presented to WDC Cabinet and Council on 11 May. 

2. What is the role of the council subsidiary Milverton Homes and why did this cause complications in the process?

From our perspective, Milverton Homes has not caused any complications to the process. It was referred to quite clearly in the due diligence report concluded in May 2021. Milverton Homes is a wholly owned Council Company which has all party support, to assist with delivering more homes in the District. The Council has invested money in the Company for which a return will and is being generated, but clearly if there is any financial difficulty the impact would come back to the Council.  We have extensive due diligence processes in place to check whether any investment is appropriate. Our Auditors have recently reported (public report) to say that they saw no issues with the work it had undertaken in 2020/21.

3. Can you provide a guarantee that the pursuit and eventual breakdown of these plans has not come at a cost to the taxpayer?

We have incurred expenditure costs of £157,559 on the Merger as a result of work that has taken place up to April 22. However, savings generated to date and those ongoing through continuing joint arrangements with Stratford will deliver a net beneficial position for Warwick District Council. See answers below.

4. You referenced savings in relation to a combined Local Plan between the two authorities, a joint waste management service and the cutting of senior staff roles. Could you provide exact figures for the savings already gained by these changes? Could you provide exact figures for the savings from these changes in the future? And which senior roles now have only one joint representative?
5. Are there any other significant savings I should be aware of?
6. Please inform me of the total figure of all savings already gained from the arrangement - rather than any future savings.

Savings achieved to date and projected:

• Joint waste management service:
  • Procurement savings of £10,200 have been gained to date
  • When the new contract commences from 1 August, forecast annual savings are expected to be £211,200 per annum
• The savings achieved through a joint management team total £156,000 up to its cessation on 12 May
• Ongoing savings as a result of a shared legal service will total £90,000 per year from 1 April 22
• Savings are estimated as £500k to WDC for doing a Joint Local Plan compared to undertaking a Local Plan by ourselves
• Savings to date have been covered within the response to question 4

7. Please tell me exactly how much the public consultation cost.

The public consultation cost £63,500, with WDC picking up 50% of this cost £31,750

8. Please tell me exactly how much the reports from Deloitte cost WDC.

The Deloitte report cost WDC £22,250

9. What is the joint study WDC spent £35,000 on?

Consultation work on behalf of WDC and SDC was completed by Opinion Research, totalling £35,000. This cost has been split 50/50 between the 2 Councils.

10. What is the ‘programme management’ WDC has so far spent £100,000 on this financial year (and would have spent every year until 2023/24)?

WDC and SDC agreed to both budget £100,000 per annum up to 23/24 to cover the costs associated with the merger, including the Transformation Programme Team (2 people), legal fees, commissioned reports and consultations (including those referred to in the responses to questions 7 and 8), and communication costs. This cost is included within the costs set out at question 3. Please see the Cabinet report taken to the 11 May meeting, which also forms part of this response.