BRISTOL 2015 LTD
CEO REPORT TO BOARD – 25 FEBRUARY 2016
The Board has requested that my final CEO report provides a robust summary of how the company has conducted its business in order to make a significant contribution to Bristol’s year as European Green Capital 2015.
My report therefore provides a full account of the company’s history from its initial inception through to the present day. It documents the company itself and the way it has operated, the finances secured and what these have been spent on, the outputs achieved to date and, where possible, the emerging evaluation and continuing investments in the city. It brings together information that is readily available in the public domain (information that the Board will already be familiar with) and also includes the commercial and in confidence papers that the Board regularly considers.
I hope that by providing all of the pertinent facts in one document, this report will also serve as a useful reference tool for Board members to use in the event they are questioned on any aspect of the company’s operations by colleagues, stakeholders or the media.
Bristol 2015 Ltd was established as a private company limited by guarantee on 28 February 2014. It is registered at Companies House with the number 08917477 and has a board of 13 directors (Appendix 1).
Under the Companies Act 2006 and related regulations, small private companies are not required to undergo an annual external audit, and are only required to file abbreviated financial statements. Small private companies are also not subject to the public sector transparency code. In order to give an increased level of assurance, Bristol 2015 Ltd elected to undergo an annual external audit, despite it not being required under the Companies Act. The company’s articles of association are attached (Appendix 2).
The Board has met on 22 separate occasions. A schedule of the meetings held, the record of attendance and the register of interests are attached (Appendix 3). In addition, the Board set up a finance subcommittee to ensure adherence to the adopted financial regulations. The subcommittee members are Malcolm Shepherd (FCMA), Peninah Achieng-Kindberg (CPFA) and the Bristol 2015 Ltd Finance Director (ACCA). Dates of the finance subcommittee meetings are also included at Appendix 3.
The remit of the company, as set out by the Board, was to ensure that Bristol’s year as European Green Capital belonged to the whole city and not one organisation. In that endeavour the company sought to support the work of the Bristol Green Capital Partnership and Bristol City Council, while delivering the conditions of the award as set out by the European Commission who awarded it. The company was also tasked with securing additional financial resources.
Between April 2014 and October 2014, the company employed consultants to help it secure finances and to establish a framework for the 2015 programme. In September 2014, the Board offered me (Nicola Yates) the role of CEO at Bristol 2015 Ltd.
In approaching me to take up the post, you indicated that the company now needed to move to a management team with more operational experience to deliver the emergent programme. In accepting the role, I cited the opportunity to work with a Board as a highly relevant development experience given the work I was engaged with in my substantive role with the Council in establishing trading companies.
Given that there are a small number of people who continue to confuse my two roles, I wanted to reiterate previous discussion with the Board in this respect. Along with other directly employed personnel, I have a Bristol 2015 Ltd contract of employment, a Bristol 2015 Ltd payroll account, a Bristol 2015 Ltd e-mail address and I am subject to Bristol 2015 Ltd policies and controls (Appendix 4). I can reassure the Board that Bristol City Council took independent legal advice about my employment with Bristol 2015 Ltd and gave me permission to take up the role. In addition, Bristol City Council also formally appointed its Strategic Director of Place as its lead officer for European Green Capital.
A list of members of the management team and their periods of office, together with the nature of their employment, is listed at Appendix 5.
The company secured a number of different income streams to deliver its activity.
At a Cabinet meeting of Bristol City Council on 27 June 2013 it was agreed to provide £1m to support Bristol 2015 European Green Capital (Appendix 6). This was initially used as a commitment to attract further investment. This money, by agreement with Bristol City Council, has now been allocated to specific local programmes and to activities and assets that will revert to the Council’s ownership once Bristol 2015 Ltd ceases to operate on 31 March 2016 (Appendices 7 and 8). Much of the original start up activity has therefore now been funded from private sector monies received.
On 25 April 2014, the government formally announced that it would provide £7m to support the year (Appendix 9). The detailed nature of this support was then negotiated and agreed between Bristol 2015 Ltd, Bristol City Council and the Department of Energy & Climate Change (DECC). The subsequent agreement detailed a programme of activities to be delivered including the budget amounts for each outcome specified, and included the reporting requirements back to the accountable officer in DECC (Appendix 10).
The £7m from DECC was held by Bristol City Council and the net amount due was transferred to Bristol 2015 Ltd in 15 tranches once the company had provided satisfactory progress reports (Appendix 11). Bristol City Council has never raised any concerns about progress and to my knowledge no concerns have ever been raised by the accountable officer at DECC.
Bristol 2015 Ltd entered into a contract for services with Bristol City Council for the delivery of the public monies. A copy of this contract can be found at Appendix 12. The contract was subject to regular contract monitoring meetings at which Bristol 2015 Ltd provided progress updates. At these meetings, Bristol 2015 Ltd also provided the information necessary for Bristol City Council to report to DECC. Copies of the monthly reports to DECC are available on the Council’s website.
In addition to public funding, Bristol 2015 Ltd secured funding from the private sector comprising £1.96m cash and £2.309m Value in Kind (VIK). In total, there were 19 private sector organisations that supported the year. A different commercial sponsorship agreement was negotiated with each individual organisation and is subject to commercial confidentiality. The list and level of contributions is attached (Appendix 13).
Regular sponsorship meetings were held throughout the year to ensure that Bristol 2015 Ltd delivered the contractual requirements of each sponsor. Exit interviews have now been held with sponsors who are satisfied that their agreements have been delivered. All payments from sponsors have now been received with the exception of two, both of which are due to be received by 31 March 2016. All of the sponsorship contracts were outcome based and did not include clauses that required the funds to be spent on specific activities. This has enabled the Board to exercise discretion in creating a programme for the year once the contractual requirements of all of the different parties had been fulfilled.
The Board has also received regular reports on the use of the Value in Kind pledged by the sponsors via the VIK benefits tracker. The use of VIK has varied considerably. Some VIK has been used to reduce or avoid cost via the provision of services to the company (e.g. legal), some as cost reduction contributions (e.g. Bristol 2015 Lab fit out) and some as practical support for events (e.g. opening ceremony). Other sorts of VIK created intellectual content (e.g. thought papers) and yet more was used to extend the programme by putting on additional events. The Board also agreed to transfer £600,000 back to Bristol City Council on the condition that it is used for city wide benefit and not as cost reduction to the Council. It is intended that this Value in Kind forms part of a Smart Alliance between the three tier one sponsors and Bristol City Council, the details of which are still being finalised. A list summarising the use of Value in Kind is attached (Appendix 14).
The Board will note that the financial summary provided at Appendix 15 also shows income from Arts Council England who made their highest ever ‘Exceptional award’ to support Bristol’s year as European Green Capital. Arts Council England's Exceptional award was made directly to Bristol Cultural Development Partnership (BCDP), who in turn contracted six arts projects – Arcadia, The Bristol Whales, Richard Long, Sanctum, Festival of the Future City and Withdrawn. BCDP contracted Bristol 2015 Ltd to deliver Arcadia and the Bristol Whales. In turn, Bristol 2015 Ltd contracted Arcadia Spectacular to deliver the Arcadia project, and worked with sub-contractors to deliver The Bristol Whales.
Bristol 2015 Ltd adopted a series of internal controls including financial regulations which governed the way in which operational and financial matters were conducted (see Appendices 16a and 16b). The financial controls were agreed with Bristol City Council’s Section 151 officer after a commercial and in confidence exercise had been conducted, and it is these controls that have been subject to subsequent audits.
The financial controls were principally implemented via a purchasing policy. This document identified budget holders for the various areas of expenditure and set out sign off limits for invoiced purchases, with invoices requiring director sign off over £2k, CEO/Finance Director sign off over £20k, finance subcommittee sign off over £50k, and Board sign off over £100k. The policy also required three quotes for purchases over £5k wherever possible. An expenses policy was also in place which was in line with best practice for a small private company.
The contract between Bristol 2015 Ltd and Bristol City Council required three audits to be conducted by Bristol City Council’s internal auditors to ensure that the financial controls adopted by Bristol 2015 Ltd were being adhered to. The results of the first two audits were reported to the Board on 27 August 2015 and 30 September 2015 respectively (Appendices 17a and 17b). The third and final internal audit report has now been completed and has been assessed as ‘Good’. A copy of the report will be presented to the Board at its final meeting on 24 March 2016 and is included at Appendix 17c.
In addition, although Bristol 2015 Ltd was not obliged by the Companies Act to file audited financial statements at Companies House, an external audit was conducted at the financial year end 28 February 2015 by a local firm of chartered accountants, Houghton Stone, who provided a ‘clean’ audit report (Appendix 18). A final external audit will be carried out at the financial year end 29 February 2016.
Management of the Bristol 2015 Ltd programme by the Board has been achieved via the project tracker presented at each Board meeting. The Board will recall it also conducted an in-depth half year review in June 2015. I have provided fortnightly CEO updates via email which have then subsequently been widely distributed to stakeholders, once commercial and personal data had been removed. The management team has also met regularly, reviewing plans and management accounts in order to monitor day to day performance.
The strategic grants programme has been administered by Bristol City Council and subject to regular monitoring. The Council operated a staged payment process with payments activated on delivery of reports, as set out in the grant condition paperwork. A number of projects are still ongoing and consequently the last staged payments are scheduled to continue into the next financial year, as outlined in Appendix 19. Bristol City Council also administered the neighbourhood grants programme, utilising their existing Neighbourhood Partnership structures, and monies for both of these programmes were held at all times in Bristol City Council’s accounts. Quartet Community Foundation administered the small grants programme. A full list of grants is included at Appendix 20.
Funds provided to programme partners – including the Bristol Green Capital Partnership, GWE Business West Ltd (Go Green), Low Carbon South West (Go Green) and Big Green Week (now Love the Future) – have all been subject to contracts with Bristol 2015 Ltd with agreed outcomes and programme partners have provided regular progress reports.
CASH RECONCILIATION AND FINANCIAL SUMMARY
The Board will be aware of the cash reconciliations. Cash flowing into the company was subject to a three stage payment process agreed with sponsoring organisations and the retrospective draw down of monies for DECC funded activities.
The Board is also therefore aware that not all of the £7m awarded by DECC flowed into Bristol 2015 Ltd accounts. This is due to Bristol City Council undertaking some activities on behalf of the company, including administering strategic and neighbourhood grants and activity relating to Bristol’s presence at the COP21 Climate Summit in Paris. In addition, the schools programme is funded for a further two years. In these instances the Council has retained the funds. The latest cash reconciliation is attached at Appendix 21.
A financial summary which shows total expenditure across the overall programme split by funding source is attached (Appendix 15). The summary is supported by two schedules which provide a further breakdown of the public funds received from DECC and Bristol City Council.
Arrangements have been put in place to ensure that administrative requirements for the company are taken care of after Bristol 2015 Ltd stops employing staff on 31 March 2016. The audit of the year ended 29 February 2016 will take place during the week commencing 14 March 2016, and an initial set of accounts will be produced. The bank account will be closed on 31 March 2016 and the remaining funds passed to Bristol City Council. On 31 March 2016, physical data needing to be stored, along with an external hard drive, will be passed to Houghton Stone, the external accountants, who will store the data for the requisite time. Houghton Stone will finalise the 29 February 2016 financial statements and arrange for them to be signed. They will then file them at Companies House and file a nil tax return. Houghton Stone will be paid in advance for their services and no financial liabilities will remain.
EUROPEAN GREEN CAPITAL 2015 PROGRAMME
Bristol 2015 Ltd delivered only a small part of Bristol’s year-long European Green Capital 2015 programme, with much of the activity borne out of the individual, community and organisational enthusiasm to get involved.
The company itself was set up to ensure that the European Green Capital award belonged to the city as a whole, with no single individual or organisation dominating. There will therefore be many and varied views on whether the money the company spent was spent on the right things, at the right time, in the right way – this will continue to be a subjective judgement in my view.
The reality is also that the actual programme delivered by Bristol 2015 Ltd was subject to considerable influence by a range of stakeholders and funders who often had competing demands and expectations.
The European Commission had a number of clear criteria contained in a Memorandum of Understanding that were a condition of accepting the award, including providing a platform for international profile (Appendix 22). The Bristol Green Capital Partnership was very keen to see local projects and grants for business, individuals and voluntary organisations. Bristol City Council's focus was on lasting impact for the city. A wide range of sponsoring organisations had different reasons for being involved and their sponsorship agreements contained a variety of individual requirements and expectations. The Bristol 2015 Ltd Board members inevitably had a wide variety of views on the programme, being made up of local and national sustainability experts and community and civic leaders in their own right. The final programme was therefore a combination of all of these influences and requirements, as well as being structured to achieve the three overarching aims for the year: local empowerment, sustainability leadership and international profile.
The strength of the core programme, together with the development of a unique brand and the rollout of the branding toolkit was, in my view, a key factor in mobilising individuals, business and communities to take action and get involved. Over 240 different licensees signed up at the Brand Hub to access and use the brand assets and tools for free. This enabled us to invite the city, in its widest sense, to come and join us as a key partner in the city’s year as European Green Capital, all connected by a single identity. The Bristol 2015 website listed over 700 events, of which more than 75% were not directly led by Bristol 2015 Ltd itself. In addition, the ‘in it for good’ strapline allowed people to adapt the key proposition of being ‘in it’ for their own purposes, meaning anyone could be in it for whatever reason worked for them – ‘for their family’, ‘for their health’ etc. In social media, the #initforgood hashtag was mentioned nearly 1,000 times, giving a reach of four million.
The brand symbolised a shared, long term responsibility for creating a happier, healthier city and is now being developed into a citywide brand because the recognition of the brand is so high.
The first phase of the public awareness campaign was intended to raise awareness, which we did by staging an opening ceremony, creating a web and social media presence and dressing the city. The second phase sought to inspire engagement by recruiting well known Ambassadors, sharing stories on our website and staging events. The third phase of the campaign focused on action: we challenged people to make a change with our Do15 in 2015 campaign which saw over 10,000 people pledge. Finally, we are now encouraging people to continue being environmentally aware by reminding the city that ‘it doesn’t stop here’.
Key elements of the year will be highlighted in more detail in the citywide review which the Board has commissioned and which is scheduled for completion before the end of March.
VALUE FOR MONEY
I know that the Board has been keen to demonstrate the value for money of the company and its contribution to the European Green Capital 2015 year as a whole. Reports documenting success metrics have been produced throughout the year and further evaluation has been independently commissioned as the year has drawn to an end. While outputs and activity have been recorded wherever possible, the Board will also recognise that the value of the year in respect of everything from the behaviour change of individuals and businesses, the reputation of Bristol as a leader in sustainability and the opportunity to attract inward investment will continue to grow in ways that it is not yet possible to quantify.
For Bristol 2015 Ltd as a company, volunteers played a vital part in making the money we had go as far as possible and I can say with confidence that our core programme was enhanced by more than 100,000 hours of Green Capital associated volunteering. We were able to utilise the experience, knowledge, commitment and enthusiasm of Board members who put in many hours of unpaid work, especially the chairman Andrew Garrad. There were many other volunteers who did everything from staffing the shop and community ‘Lab’ space on Bristol’s Harbourside, to providing translation services for international delegations. The company also made use of interns who wanted both the work experience and to simply be able to say they ‘were part of it’. I know the Board recognises that without the efforts of these and many other individuals and groups the amount of money secured for the formal programme of activity would not have gone as far as it did. This is evidenced in the accounts which show that only 8% of spend was on core costs.
Bristol 2015 Ltd has funded and produced an ambitious citywide review document working in conjunction with Bristol City Council and the Bristol Green Capital Partnership. The final version will be reported for the record at the Board's final meeting in March 2016. Any such review could not hope to report all of the events, conversations, grants, conferences and other activity that happened throughout the city’s year as European Green Capital but it does aim to capture the breadth and scale of activity, as well as the spirit and commitment of the city to this agenda.
Public awareness activity:
An independent evaluation of the work that Bristol 2015 Ltd has undertaken on public awareness activity was commissioned from Prime Decision. A copy of their report is attached at Appendix 23. The report compares how much Bristol 2015 spent on public awareness (marketing, digital and PR) and the reach achieved with other European Green Capitals. The headlines from this report show that there was both high awareness of the award across the city (85%) and associated high recognition of the brand (also 85%). By comparison, the preceding title-holder, Copenhagen, claimed 75% awareness. Comparing European Green Capitals from 2010-2015 and allowing for different population sizes, Bristol matches or surpasses all other cities in terms of press coverage, social media followers and unique website views/visits.
Bristol 2015 Ltd can also start to point to the continued impact of both the projects it funded directly and the additional investment leveraged as a result of Bristol’s status as European Green Capital 2015. We are still collating data on these projects but they include the £7m grant awarded to the West of England region last month by the Office for Low Emission Vehicles; a further £1m (£999,450) secured by Avon Wildlife Trust on the back of the My Wild City initiative to improve the green spaces within Housing Association estates; and value in kind donated to Spike Island by Arup and Skanska which directly contributed to them being awarded an Arts Council England capital grant worth £499,976 to improve the long-term environmental sustainability of their building. These three examples demonstrate in turn: the benefit derived from association with the profile of our Green Capital year; scaling up a project that was directly funded as part of the year, and creating the conditions for collaborations across the city.
The contract between Bristol 2015 Ltd and Bristol City Council specifies that all of the assets that the company holds at termination of the contract on 31 March 2016, including physical assets, intellectual property and Value in Kind, will revert to the Council. These assets include a solar balloon, office equipment and furniture, a website for re-use and website functionality for re-purpose by multiple organisations, intellectual property for a citywide brand and the Bristol Method knowledge sharing platform. Bristol 2015 Ltd has written the value of each asset to zero but the Board will be aware of the value that each of these assets will confer on the Council as it makes use of them (Appendix 8).
CLOSING AND HANDOVER CEREMONIES
Since the last Board meeting, the closing ceremony was held on 5 February 2016 at Colston Hall and was attended by over 800 people. The afternoon, compered by TV presenter Miranda Krestovnikoff and Ujima Radio’s Julz Davies, brought together success stories from across our programme – from grant winners and school children to participants in Neighbourhood Arts projects and representatives from business. The ceremony also included a look forward at continuing projects such as Refill Bristol.
As our chairman Andrew Garrad said on the day, "It doesn’t stop here. Our journey to become a happier, healthier city will continue into 2016 and beyond, and our ambition and energy has only been increased by our year in the spotlight”. However, the Board will be aware that not everyone attending was positive about the year and a small demonstration was held outside the venue.
The following week, on 9 February 2016, the official handover ceremony organised by the European Commission took place in Brussels, at which Ljubljana become the seventh city to be officially awarded the prestige of European Green Capital status. The event was broadcast live via the European Commission's Green Capital web pages. During the ceremony, Commissioner Vella made particular reference to Bristol’s approach to delivering our year as European Green Capital, stating that we had significantly raised the bar. Bristol has also been highly commended in correspondence received from both the current and former Director-Generals for Environment at the European Commission, Daniel Calleja Crespo and Karl Falkenberg (Appendices 24a and 24b).
M SHED EXHIBITION
One of the final projects Bristol 2015 Ltd has commissioned is a permanent display at M Shed. The display will occupy the final gallery at the end of the Bristol Life section of the museum, on the first floor. The exhibition will include appropriate artwork, display panels, digital displays (where the public can access the large amount of digital content captured during our year) and a facility for visitors to consider what pledge(s) they might make to be more sustainable. A project plan is currently being written and will be presented at the final Board meeting in March. The exhibition will be launched to coincide with the Festival of Nature in June 2016.
ARRANGEMENTS FOR MARCH
Three further members of staff leave on 29 February 2016. Two staff members remain to complete the review document and leave by 11 March 2016. This will leave just three remaining members of staff. The Head of Digital will continue to work on ensuring that the website can be re-used and re-purposed until 31 March 2016. The Finance Director and I will also remain until the contract between Bristol 2015 Ltd and Bristol City Council terminates on 31 March 2016.
Any residual funds will be transferred to the Council at 31 March 2016.
Information generated by the 2015 programme such as digital content, stakeholder databases and original artwork will be available to Bristol City Council from 1 April 2016.
Company data required to be retained by statute will be held for the requisite period at the offices of Houghton Stone, Bristol.
Whilst I believe this report provides a single narrative of the company’s activities for the Board, I am aware that there remains a degree of unhappiness amongst a very small number of people about the year and the role of Bristol 2015 Ltd.
Bristol raised more money to deliver its core programme than any preceding European Green Capital. The way in which the money has been used will, as I have already outlined, be subjective and could be called into question by those not involved in the decision making, so we must consider whether we could and should have done more to involve a wider range of stakeholders in developing the programme.
No other European Green Capital has set up a company to secure public and private investment and deliver a core programme. Whether this was the right vehicle, or whether establishing a charitable trust would have been better, or indeed whether some other mechanism should have been used, must be another key question.
Given that the company was in effect a start-up, could we have done things differently in the early stages to balance the need to develop a coherent core programme in a short timeframe with the expectations of the local community it served, the desire for clarity about what was happening and the need to establish due business processes?
The chairman himself in his closing ceremony address stated that there are several things we might do differently were we starting again today with the benefit of considerable hindsight. He is therefore intending to speak to a number of people, including Board members, in order to prepare a document summarising the lessons learned, which might be helpful for others to use in the future.