Issue - meetings

A report of the Cabinet Member Finance and Asset Management.

The Mayor will ask Council to suspend the normal rules of debate to facilitate a presentation from officers, followed by an opportunity for Members to ask questions of the Cabinet Member and the officers.

This will be followed by a debate and vote on the recommendations where normal rules will apply.

The Mayor proposed suspension of the rules of debate set out in Rule 13 of the Council procedures for this agenda item in order to facilitate  the following :

1.    The Cabinet Member will propose the motion in the normal way (up to 10 mins)

2.    The Mayor will invite the Head of Property and Assets, Dominic Stead, and Simon Hodges, to give a presentation.

3.    This will be followed by a Q and A session where questions will be put to the Cabinet Member Finance, Councillor Rowena Hay who may ask officers to assist in any technical responses.

4.    The Mayor will then invite debate where normal rules of debate will apply concluding in a vote.

The Cabinet Member Finance introduced the report and explained that in response to enormous cuts in central government funding the council had already embraced radical changes to the way its services were organized and delivered. Adopting a commercial focus and growing the investment portfolio had been necessary as part of the drive towards financial sustainability. This represented a vital way forward for the authority given the continuing uncertainty around the fairer funding review outcome.

She reminded Members that the original basis of an Investment Property Portfolio Strategy was to establish a £10 million fund mainly financed through borrowing to purchase investment properties with the aim of generating a net yield in excess of 5%. However, like the Sainsbury’s acquisition, this particular acquisition fell outside the parameters previously set by Council and would require a further budget allocation of up to £18.1m to fund the acquisition and associated costs.

The Cabinet Member explained that this proposed acquisition of Ellenborough House, combined with other recent approved purchases of investment property, had resulted in the need to review the limits, to ensure that external debt falls within the approved boundaries.  She was requesting Council to increase the 2018/19 authorised limit to £185 million and the estimated 2019/20 limit to £185 million. Council’s approval was also sought to increase the 2018/19 operational limit to £175 million and the estimated 2019/20 operational limit to £175 million. This reflected the assessment of the expected capital borrowing need for this council, whilst allowing for a further £50million to be borrowed by 31st March next year, in the event that further capital acquisitions came forward to full council for approval with a detailed business case. These limits would continue to be reviewed by the Treasury Management Panel annually, for approval by Council at its February meeting.

The Cabinet Member went on to explain that the purchase of commercial property was to provide additional income for the Council, fulfil the intentions as set out in the report regarding the Investment Property Portfolio, and work towards meeting the challenges identified in the Medium Term Financial Strategy. In adhering to the revised guidance, the acquisition of commercial property was focused, to ensure that the asset made a contribution towards service delivery and or place-making, for example economic benefit, business rates growth and retention, or  ...  view the full minutes text for item 11