Over the past three months I have been asking questions of the Corporate Scrutiny Com­­mittee at Forest of Dean District Council regarding the Forest of Dean Health and Social Care Community Interest Company. In answer to the latest of these on February 4 I was advised that the £26,424.81 loaned by Forest of Dean District Council to the company was in payment of three invoices for completing registration of the company and necessary company documents, completing a strategic business plan, setting up the Project Board and supporting the company once registered. As a company can be set up for less than £100, this company has never traded and has no employees, the amount would appear excessive. No specific details of the invoices were given.

When this loan was agreed in December 2008, repayment was to be made once the company obtained a grant. This grant was not forthcoming. In lieu, the Forest of Dean District Council was to receive shares in the company to hold in trust for the community. One assumes that these would be £1 shares and that the Forest of Dean District Council would therefore hold £26,424 of them.

However, a search of the records submitted to Companies House reveals that the capital of the company as at December 9, 2009 is £50 in 50 shares allotted equally to the five directors. It appears that no shares have been issued to Forest of Dean District Council. Whether the council is aware of this is unclear.

From the answer to my latest question I gather that a meeting with company representatives to clarify the position has been requested within the next month. It cannot come too soon.

The chairman of the Corporate Scrutiny Committee commented that it was necessary to ascertain the worth of these shares held by Forest of Dean District Council (if, indeed, any have been issued to the council). It is difficult to see how they can be worth anything at all as the company has £50 in capital and over £20,000 of debt.

Even if the relevant shares are issued the council will end up with a holding in a moribund company that is unlikely ever to trade.

The Audit Commission recently censured the council for providing poor value for money and it appears that council support for this company is an example of exactly what the Audit Commissioners meant. – Daphne Pearson (Dr), Redbrook