Issue - meetings

Report of the Cabinet Member Finance

RESOLVED THAT

The recommended strategy for the asset portfolio and the specific recommendations for each of the properties, as set out in the asset review be approved, subject to the completion of the relevant option appraisals and subsequent appropriate approval process.

In the absence of the Cabinet Member Finance the Leader introduced the report which recommended a strategy for the asset portfolio and the specific recommendations for each of the properties as set out in the asset review.

He explained that many Councils were facing a tough and complex set of pressures – funding cuts, rising demand for services with increased costs associated with its provision and economic growth challenges. Further spending cuts were inevitable and likely to be in the next two months with the Local Government settlement and the decision on the new homes bonus.

Demographic and economic pressures on authorities and their services were increasing so the question was how could local authorities transform themselves to respond to the pressures they faced. The current thinking of Government was to make councils become less reliant on Revenue Support Grant and other centrally controlled grant funding.  It was therefore this Cabinet’s aspiration to become financially sustainable by 2021-2022. This was one of the reasons why the Cabinet Member Finance had requested the Chief Finance Officer to write a commercial strategy for which she was seeking Cabinet approval.

Many councils were facing an increasing need for reinvestment in resources and services, ranging from community cohesion, health and social care to education and infrastructure. The status quo would only lead to service reduction. Councils would need to have a relentless focus on generating additional sources of revenue income as government grant continued to fall and interest rates remained low. The Leader said that the Cabinet Member believed that the focus, where market conditions allowed, should be on areas such as investments in the commercial property portfolio and regeneration through both direct and indirect investment to boost local economic activity.

The Leader then addressed the issue of risk stating that risk was not the same as uncertainty. Risk was a logical probability function whereas uncertainty was anything but. He said that those councils who adopted a more commercial approach would need to identify assumptions and risks. The risks associated with the proposed acquisition had been identified and scored appropriately but the Cabinet Member Finance had questioned what the alternative to those risks would be which would in essence be cuts to services the public relied on. The Chief Finance Officer had also questioned whether the council could afford not to take the risks of commercial decisions.

In conclusion the Leader believed that commercialisation was the route to maintain and enhance service delivery. An appetite for risk was therefore needed whilst understanding and assessing those risks. Diversification and due diligence would be key to success.

Finally the Leader highlighted that whilst the council would maximise the use of its assets there were other things it could do.

RESOLVED THAT

The recommended strategy for the asset portfolio and the specific recommendations for each of the properties, as set out in the asset review be approved, subject to the completion of the relevant option appraisals and subsequent appropriate approval process.