Agenda item

Report of the Cabinet Member Finance

The Cabinet Member Finance introduced the report and explained that the Council’s current Asset Management Plan expired in 2015. He reported that advice had been received from CIPFA to review the approach to Asset Management which would help shape future thinking including the role of members in making decisions and reviewing the performance of the property portfolio. Therefore a more dynamic and purposeful document had been drawn up focused around a small number of clear, forward looking policy objectives.

The Cabinet Member explained that the Asset Management Plan was crucial in making a number of important linkages with the corporate strategy, the medium term financial strategy and with the Cheltenham economic development strategy. The key objective of the asset management policy was to use assets to generate income and cut costs.

The Cabinet Member made reference to the Athey consultant’s report which recently reported on the economic strategy. It highlighted the positive contribution the Cheltenham Development Task Force had made to promoting economic development but more work was required to bring forward more sites for commercial development. This was a key issue for the Council’s asset management.

The Cabinet Member highlighted the new draft terms of reference for the Asset Management Working Group, approved by the group at its last meeting and which would give them a more strategic role in asset management.

The Planned Maintenance Budget of £846 k which represented a substantial investment in the council’s assets was also highlighted by the Cabinet Member. He reported that at the same time a new 10 year planned maintenance programme was being worked up to provide a longer term view about the need for further investment. 

New capital projects were detailed in Appendix 4 of the report. These had been assessed and scored by a panel of officers against the corporate objectives, deliverability, likely costs and return on investment and feedback from the public consultation. The Cabinet Member emphasised that this had not been an easy process and at this stage some of the proposals required more work. High priority would however be given to projects which could attract additional external funding, such as the town hall redevelopment scheme.  This scheme had been most highly rated by the public in the public consultation. He reported that some time ago consultants had been asked to look at how the Town Hall could be improved and updated and a plan had been drawn up to increase capacity of the main hall, improve the flow of people around the building and create new dedicated spaces for events and create new hospitality and catering facilities. He proposed to earmark £2.4 million for this project (£2.2 million from the £8 million capital pot and a further £200 000 still to be found from future capital receipts). He reported that £400k should be made available immediately so that the project could be worked up in enough detail to go forward to potential funders such as the Heritage Lottery Fund and charitable trusts. It was estimated that the total scheme was likely to cost about £10 million, with £7.6 million being supplemented from other funders. The Cabinet Member Finance believed that this project would provide a lasting legacy to the town and its people.

The Cabinet Member Finance talked in general terms about the accommodation strategy which would be discussed later in the meeting. He emphasised that this was not just a freestanding project but an essential part of the Medium Term Financial Strategy to cut costs through organisational change.  In his view it was a practical example of how assets and capital could be used to generate additional income for the Council and opened up the most exciting regeneration opportunity for many years by turning the current offices to new uses and helping to revitalise the town centre. He reminded the meeting that the Council had repeatedly restated its commitment, across party lines, to relocating our offices. For all those reasons it was proposed that £2.5 million from capital be set aside to assist the acquisition of a new building.

In terms of other projects to which it was proposed that funds be allocated or held in reserve, he highlighted the investment in the cemetery and crematorium project which was a necessity both in terms of recent problems with the cremators but also the opportunity to provide a more customer friendly service. Reference was also made to Boots corner improvements to which the Council was committed although the current proposals needed to be rethought if the County Council modified the Cheltenham Transport Plan. Finally, the Cabinet Member referred to the proposal for £300k to be allocated to a new and improved children’s play area in Pittville Park.

The Cabinet Member Finance believed that the vision and implementation of the capital programme would make a lasting difference to the quality of life in the town.

The Cabinet Member said he was aware that some members may not feel they could support the £2 million in reserve for public realm improvements pending the completion of the Cheltenham Transport Plan so he suggested a separate vote on that part of the recommendations.

The Mayor invited questions to the Cabinet Member Finance.

In response to questions from Members, the Cabinet Member Finance gave the following responses:

• Could the Cabinet Member give more explanation on the internal borrowing required for the Accommodation Strategy which seemed to leave little of the pot behind and would this allocation hold up other important work in the Capital Strategy. 
  • The Cabinet Member explained that internal borrowing went on all the time and was an important part of the council's finances. What was being suggested was short-term borrowing to support the Accommodation Strategy and would be repaid over a period of seven years through revenue contribution to capital.  The use of this capital reserve had been carefully modelled so that it would not interfere with the Capital Programme and the modest cost of internal borrowing had been included in the figures.
• What questions were asked in the public budget consultation and what responses were received that would support the £2 million investment for public realm improvements and was it specific to the Cheltenham Transport Plan (CTP) going ahead?
  • The Cabinet Member did not have the details of the budget consultation to hand but advised that 300 people had taken part. The proposals today were concerned with allocating funds to commitments that had already been made. The final form of the CTP was yet to be agreed but it was accepted that some type of work in this area would be required, even if the CTP did not proceed, and hence the recommendation to put £2 million in reserve. Public realm improvements in that part of town had been very high on people's priorities.
• A member asked to what extent the public had been made aware of the shared space proposals for Boots Corner and the potential difficulties for the disabled.
  • The Cabinet Member reminded members that this was not a debate on the CTP and the Mayor supported this statement.  
• How was the £2.5 million figure in reserve for relocation of the council HQ arrived at?
  • The Cabinet Member explained it was a proportion of the capital figure that was available which would still allow other important schemes to go ahead.  It formed an essential part of the finances allowing the Accommodation Strategy to proceed.

Councillor Babbage seconded by Councillor Seacome proposed the following amendment.

To amend the summary of Appendix 4 of the Asset Management Plan and Capital Strategy Update as follows:

1.         Remove (iii) £2.5 million for relocation of council HQ

2.         Add (vi)  - To allocate £1.843 million for upgrade to Prince of Wales Stadium Sport and Play Hub

3.         Add (vii)  -To hold £250K in reserve to support full fttc broadband coverage in Cheltenham

4.         Add (viii) – to hold £180K in reserve for structural works at the Playhouse Theatre

5.         Add (ix) – To allocate £227K towards Leisure@gym upgrade

In proposing the amendment Councillor Babbage apologised for its late circulation. While supporting the investments for the Town Hall, the cemetery and crematorium and the Pittville Park play area, he could not support the other recommendations. He was not in favour of the Boots Corner Scheme but if it did go ahead it should be done properly and he was keen to have a guarantee that the amount put in reserve would not be spent before a final decision was made on the CTP.

He added that the removal of £2.5 million did not indicate a lack of support for the Accommodation Strategy but supported the view that any decision to relocate out of the municipal offices should be based on its own financial merit, adding £2.5 M to the Public Works Loan if necessary.

Regarding the broadband recommendation, he reminded the Cabinet Member that members had supported the motion at a recent Council meeting and he had suggested that Councillor Babbage bring something back to Council.

The Playhouse Theatre had not been in the original consultation but these were costs that the council would have to bear at some point. Therefore his proposal was that some money should be set aside in reserve and then a formal proposal brought back for budget approval at the July Council.

The gym at leisure@ were suffering from lack of space and the proposal was that the council was allocate a sum to cover 50% of the upgrade improvements. The remainder of the project would be funded through a loan on future capital receipts.

In the debate that followed a member had sympathy for the removal of the reserve for the Accommodation Strategy and agreed that the scheme should be self- financing but he could not support the other recommendations without further consultation and firm proposals. Another member was concerned by the suggestion to take out a further £2.5 million loan to finance the accommodation strategy which would increase the council's debt over the long-term or require a deeper cut in services. On that basis it was not a wise or sensible proposal.

It was confirmed that the Playhouse Theatre had a fully repairing lease and was not part of the Cheltenham Trust. The Playhouse was due to undergo a full architectural survey and undoubtedly the building would need more money spending on it which the Playhouse would not be in a position to raise for themselves.

A number of members spoke against the recommendation that the council should be putting money in reserve to support broadband coverage in Cheltenham as they felt this was not a responsibility of the Cheltenham taxpayer. They questioned where the figure had come from. In response, Councillor Babbage said it had been calculated from an estimate of £60 per household derived from figures supplied by BT and would be simply a top up on the funding he hoped BT would put forward. Another member highlighted that the recommendation was purely to put some money into reserves with the objective of getting some resources to kick start this important issue.

Councillor Mason asked for it to be recorded in the minutes that Members on the opposite side of the chamber had made a statement to the effect that the council should not be spending money on things that the Council is not directly responsible for in the debate on the amendment for agenda item 8.

In his summing up Councillor Babbage was disappointed in the response to his proposals which were intended to build on existing legacy projects using the once-in-a-lifetime opportunity presented by the £8 million capital receipt. The figures suggested for the Broadband reserve was relatively small.

In response the Cabinet Member questioned the soundness of the amendment as there was very little financial detail to support it.  He highlighted that the primary aim of the Accommodation Strategy was to reduce the burden on the revenue budget hence the need for capital investment. This amendment would make the strategy more expensive to implement by increasing borrowing.

Regarding leisure@, this needed to be regarded as a commercial enterprise and to investigate what could be borrowed without the public purse.  He had some sympathy for the position of the Playhouse Theatre and he confirmed that they had already been in touch with him on this issue.  He acknowledged there were problems at the Prince of Wales Stadium and they would need to look at levering  money in from outside sources.

Upon a vote the amendment was LOST

Voting: For 9, Against 25 and no abstentions.

Members now debated the main motion.

A member supported the investment for the Prince of Wales Stadium. It was a very tired building and the improved emergency lighting was much needed. He highlighted that the stadium was already supported by volunteers and it would be difficult for them to secure additional income to facilitate further improvements that were needed.

 In his summing up the Cabinet Member Finance said the option for investment in new facilities at the Prince of Wales Stadium could be explored but would need to be based on borrowing from future income projections or funding a private investor.

Upon a vote on the recommendations, excluding ii), were resolved unanimously.

Upon a vote on recommendation ii) this was CARRIED.

Voting:  For 30, Against 4 with 1 abstention. 

Resolved that

1.            The Planned Maintenance Programme for 2015/16 at Appendix 5 be approved

2.            The provisional allocation of the receipt of North Place / Portland Street car parks to support key property investment aspirations at Appendix 4 be approved.