Issue - meetings

Reports of the Cabinet Member Finance TO FOLLOW :

·         Property acquisition (1)

·         Property acquisition (2)

·         Property acquisition (3)

RESOLVED THAT

The recommendations be approved as amended.

The Cabinet Member Finance introduced the exempt report regarding an opportunity which had arisen for a potential commercial property acquisition. Cabinet’s approval of the business case and supporting information was now being sought prior to Council’s consideration of the budget allocation.

She 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 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 she had requested the Chief Finance Officer to write a commercial strategy that would be submitted to Cabinet on 12 December for 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 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.

She provided Members with more details of the property under discussion. With any property investment the need to assess the options and criteria was paramount and the financial objectives and revenue delivery of this potential acquisition had been assessed and that the prescribed target yield met expectations. She went on to address the issue of risks and explained how the risks associated with this proposed acquisition had been identified and scored appropriately. She concluded that commercialisation was the route to maintain and enhance service delivery.

The Cabinet Member Finance informed Members that Asset Management Working   Group were consulted on the proposal on  27 November and were supportive of the acquisition.

The Cabinet Member then advised that since circulation of the report an additional financial projection had been developed and was tabled to Members. As a result recommendation 2.1 was amended. Members supported the amendment.

Members then raised questions on the report and responses were given.

RESOLVED THAT

The recommendations be approved as amended.