Issue - meetings

The Executive Member for Finance, Governance and Organisation and Deputy Leader.

RESOLVED – that the Executive:

(i)               Recommend to Council that the Capital Investment Strategy be adopted as the framework for the Capital Programme elements of service and financial planning for 2024/25 onwards.

Councillor Lewanski, the Deputy Leader and Executive Member for Finance, Governance and Organisation explained that the report presented the latest version of the Council’s Capital Investment Strategy.

None of the information in this report was new, but it did bring all aspects together to demonstrate that there was a plan to ensure that capital spending decisions took account of the authority’s stewardship, value for money, prudence, sustainability, and affordability responsibilities.

This was particularly important in the current financial climate, especially in light of those authorities that were now finding themselves in financial difficulties due in part to not having sufficient control over their capital spending and borrowing commitments.

The report also included information about the significant assets that were in Council ownership, how they were used and how they were performing, as well as information about the new capital assets that the Council was investing in and how they were being funded.

These activities were supported by the work of the Partner, Shareholder and Trustee Sub-Committee and officer boards.

The next step would be to continue the work that was now in progress to confirm future capital investment plans as part of the service and financial planning process.

Members of Overview and Scrutiny Committee made no formal observations to the Executive on the Capital Investment Strategy, although there were several comments and questions, and these were published in an Addendum to the agenda.

The Chair of the Overview and Scrutiny Committee made the following comments:

·         The report on Commercial Property Performance in 2022/23 that was submitted to the Partner, Shareholder and Trustee Executive Sub-Committee held prior to this meeting had helped to answer some of the detailed questions on property investment returns that the Overview and Scrutiny Committee had raised regarding Tables 1,2 and 3 in this report.

·         The Committee had considered the current position regarding plans for Beech House and again this had been discussed at the Partner, Shareholder and Trustee Executive Sub-Committee.

·         The Capital Programme did not yet include any significant investment in electric vehicles despite options being considered. There had also been discussion around the requirement for investment in refurbishing buildings to improve energy efficiency to support delivery of the approved Environment Sustainability Strategy, however allocations had not been made in the Capital Programme.

In response to the comments, it was explained that various options were being considered relating to vehicle replacement, including electric and hydrogen power. The Chair of the Overview and Scrutiny Committee was thanked for the Committee’s comments.

A visiting member stated that Surrey County Council’s (SCC) capital programme for refurbishing buildings to improve energy efficiency was funded through a combination of grants, loans and invest to save projects as well as using some of their own resources, and that there was a Green Finance Strategy had been adopted for this. It was questioned whether the Council could develop further the Capital Strategy for these environmental elements as it represented a gap in the Capital Investment Strategy currently.

In response the Leader explained that  ...  view the full minutes text for item 18

To review the Capital Investment Strategy 2024/25 to 2028/29.

RECOMMENDED that Overview and Scrutiny Committee:

Notes the report and raises any comments for consideration by Executive.

The Executive Member for Corporate Policy and Resources introduced the Capital Investment Strategy, on behalf of Councillor Victor Lewanski, Executive Member for Finance, Governance & Organisation.

This report presents the latest version of the Council’s Capital Investment Strategy which demonstrates how the Council plans to ensure that capital spending decisions take account of the authority’s stewardship, value for money, prudence, sustainability, and affordability responsibilities.

This is particularly important in the current financial climate, especially in light of those authorities that are now finding themselves in financial difficulties due in part to not having sufficient control over their capital spending and borrowing commitments.

The report also includes information about the significant Council-owned assets, how they are used and how they are performing. Also, information about planned capital assets investments and how they are being funded.

These activities are supported by the work of the Partner, Shareholder and Trustee Sub-Committee and officer boards.

The next step will be to continue the work that is now in progress to confirm future capital investment plans as part of the service & financial planning process.

The Executive Member for Corporate Policy and Resources invited any comments or questions from O&S members.

The following clarifications were provided:

Capital Assets

Members requested information on the net yield from the assets listed in table 3 of the report, together with the portfolio total gross and net yield. In addition, a reconciliation of the assets listed in tables 1 and 3. An explanation was also sought for why table 2 included entries for both the Tadworth Centre and the Banstead Sports Centre. These would be provided in a written answer following the meeting.

It was confirmed that the assets listed had been classified under the CIPFA Code of Practice for preparing the statement of accounts. A written response would be provided to explain the basis for the classifications.

Assets under Construction

It was confirmed that £73.614 million of assets under construction predominantly related to the Marketfield Way development.

Significant Assets

It was confirmed that some of the community assets had a low book value because they could not be sold, developed, or disposed of, but that they did still have “community value”.

Property Assets

Members commented on the significant drop in the valuation of Beech House compared to its purchase price, noting that the Capital Programme included a significant capital spend. It was confirmed that officers were preparing options for the future use of Beech House and a report would be presented to Partner, Shareholder, and Trustee Executive Sub-Committee when the recommended plans were confirmed. Also, that the £3 million allocation in the Capital Programme estimate was based on the estimated cost of a previous scheme for a former tenant that was not progressed, and a more modest project was being considered.

Asset Performance and Condition

It was confirmed that the approved Capital Programme does not currently include significant investment in electric vehicles. Options were currently being considered and a business case was expected to be brought to Executive later  ...  view the full minutes text for item 17