Urgent changes recommended for MGLs business model

The city council are the sole stakeholder in this arms length company responsible for marketing the city. Last year MGL were flagged as having cash flow problems which led the city council to take action with a temporary lending facility. As part of this the council ordered an in-depth and independent review into the organisation.

Two sets of consultants with specific experience were engaged to undertake a detailed review of finance, governance and management. The review involved seeking the views of a wide range of individuals and organisations. The review has now concluded with a number of key findings and recommended actions.

The consultants provided feedback on four key areas – summarised below:

1. Purpose, vision, strategic and operational management
Lack of clarity in all of these areas. Too much focus on events delivery and not enough on marketing the city as a whole to an external audience. City Council requirements too broad and far ranging and need to be focused.
2. Governance
Not enough accountability for decision making and a board structure that is too large and based on stakeholder representation instead of skill based.
3. Finance management
Informality of financial controls and procedures. Trading under unprofitable circumstances and financial volatility.
4. UK: Digital Retail Innovation Centre (UK:DRIC)
Lack of alignment and in need of urgent and full review.

Summary of the recommendations:

1. To endorse the proposal that Gloucester needs an effective, dynamic and collaborative Place Marketing Organisation (PMO) and that MGL should refocus it efforts to deliver this requirement.
2. To recommend to the Board of MGL the urgent appointment of an interim Managing Director.
3. The interim Managing Director to work with the Board to re-determine the company vision, mission and purpose, its business plan, its staffing structures, skills needs and budgets and to commence the process of recruiting a permanent Managing Director.
4. To bring the budget, seconded staff and commissioning responsibilities for the delivery of the city events programme to the city council.
5. To change the mix of executive and non-executive directors and that the directors have the necessary skills and experience to hold the company to account and provide effective governance.
6. To appoint two additional Gloucester City Council representatives to the Board of MGL (a cabinet member and a corporate director)

Cllr Steve Morgan, Cabinet Member for Culture and Leisure at Gloucester City Council said: “We remain committed to MGL being as independent as possible; however it is clear that we need to maintain appropriate oversight of the operations. Clearly MGL has had success with many of its projects, but it has not managed its cash flow well enough. We have been given no option but to provide them with a cash flow facility so we have a duty to ensure that there is appropriate operational and financial management. ”

Cllr Steve Morgan continued: “The review identified a number of positives within the organisation and we don’t want to detract from the good work the team do. We will support MGL to get back to clearly focussing on the important work of promoting our great city of Gloucester.”
The recommendations have gone to Overview and Scrutiny Committee and will then go to Cabinet on 15 January 2020.