Decision details

That Cheltenham Borough Council (CBC) becomes a member of the new Local Government Association (LGA) company which was incorporated on 1 April 2018.

The LGA has undertaken a detailed review of its structures and, in reaching the decision to become an unlimited company, has chosen a structure which most closely replicates its previous longstanding arrangements with public authorities. Whilst membership of the company will place certain obligations on CBC, those obligations are basically the same as under the previous arrangements and do not outweigh the benefits of CBC remaining within the LGA, which can be summarised as expert/experienced support to CBC on operational, organisational development and political management matters as well as CBC being able to participate in a strong national voice for local government.

The only alternative option is not to join the LGA company. In view of the benefits that CBC has and will receive from LGA membership, this option has been rejected.

Leader of the Council, Group Leaders, Chief Finance Officer, One Legal

One Legal has advised that the LGA is an unlimited liability company which means that, if the company were to be dissolved, the 415 public authority members would be responsible for any deficit (should one occur) proportionate to the levels of annual subscription paid. Conversely, member authorities would also be entitled to a share of any assets. Also, that member authorities are liable for net liabilities of the LGA for 5 years after they cease to be members. These aspects are intended to mirror the previous arrangements under which authorities signed up to the LGA as an unincorporated association.

The Chief Finance Officer believes that it would be in CBC’s best interests to continue its membership of the LGA and that not to be a member could be detrimental to CBC. By way of example, the LGA is currently supporting CBC on three national group litigation cases and has provided considerable cost neutral support through peer review. The LGA is widely regarded as the voice of local government and is key to supporting the sector through the Fair Funding review and Business Rates retention.

The Leader of the Council has expressed his support for continued membership of the LGA, as have the two Opposition Group Leaders.