Meeting documents

• (Attachment: 1)Minutes

RESOLVED that the Minutes of the meeting held on 15 June 2016 be approved as a correct record.

Committee Members: Councillors J. Clarke (substituted by Cllr D. Allcard), S. Parnall (substituted by Cllr J. Ellacott), Mrs. D.A. Ross-Tomlin and J.M. Stephenson.

Other Members: None.
 

None.

The Committee received a presentation from Cllr Mrs Natalie Bramhall, Executive Member for Property, which focused on the work being undertaken by the Council to maximise the value of, and income derived from, its property assets, as well as to continue to invest in the physical regeneration of the borough.

The presentation highlighted a number of completed and ongoing property projects, including: Donyngs, Horley and Tadworth Leisure Centres; Harlequin Theatre; Warwick Quadrant and Marketfield Way schemes in Redhill; Merstham regeneration project; Court Lodge and Russell Square schemes in Horley; Memorial Park; and Lady Neville Park.

The presentation also set out the aspirations for the future of the portfolio.

The importance of the contribution of the Council’s property activities to enable the Council to meet its financial targets was highlighted to the Committee – it is essential for the Council to generate revenue income as well as to make efficiencies.

Questions and comments related to:

• Marketfield Way – it was noted that a planning application had been submitted and a decision was awaited. The Committee noted that delivery was planned for 2019/20. The Committee noted that the Marketfield Way scheme was in the process of being substantially pre-let and pre-sold, which was the Council’s preferred approach to development to reduce developers risk.

• Court Lodge houses – The Committee noted that solar panels had been installed on the roofs, and that where viable, solar panels were considered on all Council schemes. It was noted that the Court Lodge houses had been marketed first to local residents to ensure that the scheme had a local benefit.
The Committee thanked the Portfolio Holder for attending and for responding to its questions. The Committee congratulated Cllr Mrs Bramhall and the Property Team for its achievements to date.

RESOLVED that the presentation be noted.
 

• (Attachment: 2)Item 5: Property Investment and Development Company Report (276K/bytes)

The Executive Member for Property, Cllr Mrs Bramhall, introduced a report which set out proposals to establish a Local Authority Trading Company (LATC) to undertake property investment and development activities on behalf of the Council. The proposals were due to be considered by the Executive at its meeting on 15 September 2016.
This establishment of an LATC was recommended in order to enable the Council to meet the funding challenges set down by Central Government and to become financially self-sufficient, as prioritised in the 5 Year Plan. This was in line with the property strategy agreed by the Executive in December 2014.

The Committee discussed the report, with questions and comments made regarding:

• The Committee noted that the establishing of property companies was the direction in which many Councils were now developing – Surrey County Council and Sevenoaks District Council had already established their own property companies and Spelthorne District Council was understood to be considering the same.

• The Committee considered the membership of the Property Sub-Committee with particular regard to the rotation of the Deputy Leader of the Council position. It was noted that the Leader would be able to change the membership of the Property Sub-Committee at any time to ensure that it retained an appropriate skillset. As an Executive function, only Executive Members could sit on the Sub-Committee.

• Governance of the Property Sub-Committee – the Committee heard that this would be a formal committee and like other committees it would have meeting agendas and minutes and would be open to other Members and the public to attend. The Committee noted that the Property Sub-Committee would, at least initially, meet as and when required.

• The Committee noted that existing informal reporting arrangements would be utilised to ensure that Members were kept well briefed on the progress of the Property Company, beyond the formal arrangements set out in the report. The Committee noted the need to balance transparency with the protection of commercially sensitive information.

• The Committee noted that a business plan would be supplied to the Property Sub-Committee which would include details of all intended activity to be undertaken by the Company, along with due diligence information for each planned project.

• Overview and Scrutiny of the Property Company – the Committee requested that consideration be given to including the performance of the Property Company in the Overview & Scrutiny Committee’s annual work programme

• Non-Executive Director – the Committee supported the idea of appointing a fully independent non-executive director to the board of directors of the Property Company at an appropriate time.

• Return of profits to the Council – the Committee noted that the Property Sub-Committee would be responsible for deciding how much profit would be transferred from the Property Company back to the Council, which would be achieved by way of dividend to the Council as the sole shareholder. The Committee noted that the Property Company must retain sufficient revenue to be able to operate. The process would be as transparent as possible, subject to the need to protect commercially sensitive information.

• The Committee noted that any conflicts of interest arising would be addressed in accordance with the Council’s existing procedures.

• The Committee suggested that consideration be given where possible to opportunities for linkage with the third sector.

• The Committee noted that the Council would retain the option to keep any property investment and development activity within its own portfolio

• Investment decisions – the Committee noted that the Property Sub-Committee would be limited to making property related decisions. The Council would retain authority for decisions regarding investment and development.

• The Committee was pleased to hear that the Council would continue to prioritise investment and development decisions which would provide a social return. A balance had been and would be struck on every scheme and the Property Company would be committed to furthering the 5 Year Plan.

• The Committee heard that the transfer of certain assets to the Property Company would enable the renting of residential units, which was an activity in which the Council was currently restricted from engaging under the Housing Act.

• The Committee heard that affordable housing would continue to be sought wherever viable; it was recognised that viability tended to be particularly restricted in town centres.

RESOLVED that:

(i) the report be noted;

(ii) the Executive be asked to have regard to the comments of the Overview & Scrutiny Committee; and

(iii) the following observations be made to the Executive:
a. that the Committee was in support of the proposals; and
b. that consideration be given to the introduction of a Non-Executive Director to the Board of Directors of the Property Company at an appropriate time in the future.
 

• (Attachment: 3)Item 6: Quarterly Performance Report (Q1 - April to June 2016) (250K/bytes)

The Committee received a report that detailed the major variances on performance in relation to the Council's Key Service Indicators, Revenue and Capital Budget Monitoring, and Internal Audit reports. It also reported on progress against the Council’s LGA Action Plan, and highlighted two new strategic risks that had been identified in Quarter 1.

The detailed performance information had been placed in the eMembers Room and the Committee had received one advanced question and response relating to an overspend in Legal Services. The Committee discussed this further and noted that management action was being taken to correct the position.

The Committee discussed the report, with further questions and comments made regarding:

• Recycling income – the Committee were pleased to note that the Council had the best textile collection rate in Surrey. It was noted that the Council was about to enter into a new contract for dry mixed recyclates at rates that were significantly better than had been budgeted. It was confirmed that the ongoing renegotiation of Surrey County Council recycling funding would not impact on the budget for 2016/17. The Committee noted that the current collection and separation arrangements for recyclates remained the most economical option.

• Raven Housing Trust – the Committee were pleased to note that discussions about the future of the Council’s strategic working relationship with Raven were continuing and progressing well. The Committee noted that the outcome would be reported to the Executive later in the year.

RESOLVED that:
(i) the performance update and advance question be noted; and
(ii) no observations be made to the Executive.
 

• (Attachment: 4)Item 7: Budget Scrutiny Review Panel (123K/bytes)

The Committee received a report setting out the proposed approach to the budget scrutiny process during 2016/17. The Committee noted that the proposed process and scope of the Panel’s work was identical to previous years, in which the Panel had been a valuable part of the budget preparation programme.

The Chairman drew the attention of the Committee to the fact that meetings of the Panel were open to any Councillor to attend.

RESOLVED that:
(i) the membership and timetable for the preparation for the budget for 2017/18 be agreed, as set out in the report; and
(ii) the scope of the Budget Scrutiny Review Panel work during 2016/17 be agreed, as set out in the report.
 

It was reported that there were no items arising from the Executive that might be subject to the ‘call-in’ procedure in accordance with the provisions of the Overview and Scrutiny Procedure Rules.

None.

RESOLVED that members of the Press and public be excluded from the meeting for the following item of business under Section 100A(4) of the Local Government Act 1972 on the grounds that:

(i) It involves the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of the Schedule 12A of the Act; and
(ii) The public interest in maintain the exemption outweighs the public interest in disclosing the information.
 

• (Attachment: 5)Item 11: Property Investment and Development Company Part 2 Report (39K/bytes)

The Committee considered the exempt information in relation to the creation of the Local Authority Trading Company. This included financial information and a list of initial sites which it was proposed to transfer into the Property Company.

RESOLVED that the exempt information in relation to the report be noted.