GREATER LONDON ENTERPRISE BOARD (Hansard, 9 December 1985)

§ Lord Elton

In giving consents to GLC expenditure to meet the running costs of the GLEB during the current financial year my right honourable friend has made it clear that he would expect control of the board and its assets, which have been funded by London ratepayers, to pass at least to a significant proportion of London boroughs at abolition of the GLC. He therefore welcomes the steps which have been taken both to allow London boroughs to exercise a controlling influence from 1st April 1986, should they wish to do so, and for the board's assets to be returned to all London ratepayers via the Residuary Body in the event of the board's dissolution.

In order to enable the London boroughs to decide whether to exercise the option now proposed and to assist him in reaching a decision on outstanding applications for consent from the GLC for further grants to the board, my right honourable friend has called for an independent assessment of the board's financial situation and viability to be undertaken with the following terms of reference:

Terms of Reference for an Independent Assessment of GLEB:

1. Review the arrangements proposed to be made with the London boroughs to provide financial support for GLEB, both in respect of ongoing commitments of the board in 1985–86 and 1986–87 and new investments proposed to be made.
2. Assess the minimum sum required from the GLC and/or the London boroughs in 1985–86 and 1986–1987 in order to maintain the value and viability of GLEB's existing assets and investments. This assessment will be based upon:

2.1 a review of the validity and appropriateness of the assumptions and bases used by the board in assessing the amount required;
2.2 a review of the adequacy of the financial data available to support the amount required;
2.3 a review of the consistency of both the assumptions and the financial data for each area of the board's activities;
2.4 an evaluation of the board's current assets and liabilities including a list of assets which are capable of being disposed of without further company investment for values in excess of £50,000 in each case.

3. Assess GLEB's ability to continue as a going concern until the end of 1986–87 financial year. This assessment will be based inter alia upon:

3.1 a review of the options identified by the board for funding the future operations of GLEB;
3.2 an evaluation of the proposals for funding by the boroughs (see 3.1 above) against the sum required to maintain value and viability of assets, investments (see 2 above) and the board's current financial position as reflected by 2.4 above;
3.3 the projected cash flow of the board and the group for the years 1985–86 and 1986–87.

4. The report on these assessments should be accompanied by a copy of the board's and the group's projected revenue account, balance sheet and source and application of funds statements (including a breakdown of the components of working capital requirements) for the years 1985–86 and 1986–87, prepared in accordance with the appropriate statements of standard accounting practice; and should contain confirmation or otherwise that neither the figures arrived at nor the basis of the assessments made are affected by the exclusion of subsidiaries from consolidation.