Issue - meetings

Report of the Cabinet Member Finance and Assets.

The Cabinet Member Finance and Assets presented the report, recalling the council’s journey in recent years. With a decade of austerity and a commitment to fund discretionary services, this council looked commercialise its operations wherever possible. With the cost of services at £22m and income from local taxation and grants equalling £14m, they had to fill the void of £8m with trading and investment income. How the council used capital and managed investments was more important than ever, in order to ensure it was maximising the returns generated to support the general fund budget.

The documents presented to Council set out how they planned to do this over the next 12 months. These strategies were all mandatory for local authorities and should be reviewed and approved by Council each year. Together with the asset management strategy, they provided the framework for all our capital, asset and investment decisions for the coming year. He also presented for approval the annual Minimum Revenue Provision statement, which explained how the payment of their borrowings had been calculated. There had been no significant changes to their approach for the coming year as they were still waiting for a formal response to the government consultation from 2021, which had still not been published.

The Mayor moved into Member questions:

• One Member noted that some property purchases used short-term loans, and queried the possible impact of this when it came to renewal, with interest rates creeping up. The Executive Director Finance, Assets and Regeneration clarified that they took a hybrid approach, and all the investments they classified as operational were subject to long-term borrowing. Four or five years ago, when they made a number of strategic investments in the town including a supermarket and a number of office buildings, these were financed using what was called a basket of maturities. Instead of taking one loan over 40 years, they took 40 loans over 40 years, with the first loan maturing each year and so on. All of those were fixed. The rationale for that was that it saved some £990k in interest over the 40 years. The only strategic investment they now had in short-term borrowing was the land acquisition at West Cheltenham. The rationale for this was that if they got it right, over time they would release plots to developers to develop out, and obtaining capital receipts to offset this debt repayment. He reassured Members that they were not in a situation where the majority of their debts were short-term loans.

• One Member asked about the opportunity costs and time and effort needed to seek the available sources of funding from the government. The Cabinet Member Finance and Assets agreed that officers had to spend a lot of time working on bids when they could be doing other things, but unfortunately this was how the government chose to operate now. Funding was only made available through limited windows and they had to compete with other authorities for it.

There being no further questions, the  ...  view the full minutes text for item 9