Issue - meetings

To consider proposals for a Capital Investment Strategy.  

RECOMMENDED that the Capital Investment Strategy 2019/20 be approved.

Councillor T. Schofield, Deputy Leader and Executive Member for Finance, introduced the latest version of the Council’s Capital Investment Strategy. It was noted that the Strategy formed a key part of the Council’s governance arrangements and provided a mechanism by which investment and financing plans could be prioritised.

Councillor Schofield explained that the Strategy was intended to be an integral part of the Council’s Policy Framework and would ensure capital decisions took account of stewardship, value for money, prudence, sustainability and affordability.

In response to questions it was explained that:

-       An outline Strategy had previously been approved by the Executive at the start of the financial year.

-       The updated version, set out in Annex 1 to the report presented to the Executive, reflected the outcome of excellent work that had been carried out over recent months to further develop the Council approach to capital investment. It was highlighted that this had been overseen by the new Commercial Ventures Executive Sub-Committee and Officer Board.

-       The Strategy would be integral to service and financial planning and should be read in conjunction with the Corporate Plan, and supporting strategies, the Commercial Investment Strategy, Capital Programme, Medium Term Financial Plan, Treasury Management Strategy Statement and Asset Management Plan. 

It was noted that the Overview and Scrutiny Committee had considered the Capital Investment Strategy 2019/20 on 12 September 2019. The Leader of the Council thanked the Committee for its questions and highlighted that a number of observations had been circulated to the Executive by the Chair of the Overview and Scrutiny Committee ahead of the meeting. This included feedback and questions on a variety of matters, including: the work plan and next steps; issues being considered by the Commercial Ventures Executive Sub-Committee; progress in relation to investments in property and capital scheme developments over the last five years; capacity issues / gaps in permanent staff across the property team; options in relation to the purchase of shares and the provision of loans. The input from the Committee was welcomed and it was noted that these observations had been fully captured in the minutes from the meeting.  

RECOMMENDED that the Capital Investment Strategy 2019/20 be approved.

Reason for decision: To support the adoption of a Capital Investment Strategy for the 2019/20 financial period.

Alternative options:  To either defer the report and ask Officers to provide more information and/or clarification on any specific points or to not support the contents of the report.

To consider the Capital Investment Strategy for the 2019/20 financial period and, where appropriate, provide feedback for consideration by the Executive.

Members considered the Capital Investment Strategy for the 2019/20 financial period and provided feedback for consideration by the Executive.

The Executive Member for Finance, Councillor T. Schofield presented the latest Capital Investment Strategy. This forms a key part of the Council’s governance arrangements. It provides a mechanism by which investment and financing plans can be prioritised, ensuring that capital decisions took account of stewardship, value for money, prudence, sustainability and affordability. An Outline Capital Investment Strategy was approved by the Executive in March. This report reflects work carried out over recent months, overseen by the Commercial Ventures Executive Sub-Committee (CVESC) and Commercial Ventures Officer board. There will be further work to complete going forward. The Strategy will be used to support the 2020/21 Service and Financial Planning process when prioritising future capital investment plans and identification of new sources of income to address the forecast budget gap.

Members had a number of questions and comments on the report, relating to the following topics:

·       Work plan – the Chair commented that this was still work in progress. The Strategy had started to develop the numbers required to help meet the Council’s financial objectives. It was expected to develop further as priorities in the new Corporate Plan and Housing Strategy were finalised. This was set out in a logical sequence as the Council started to look at Budget gaps, set out its final plans and proposed commercial investments.

·       Feasibility studies – Members asked about progress during recent months, including the allocation of £25m in the Capital Programme for investment in corporate priorities in 2019/20 onwards and the creation of an earmarked reserve of £250k that was available to fund feasibility studies. The report confirmed that the Commercial Ventures Executive Sub-Committee now has delegated authority to approve investment of these funds. It was commented that the feasibility studies were revenue expenditure as opposed to the £25 million which is capital investment. It was confirmed that the wording would be amended to clarify this.

·       Commercial Ventures Executive Sub-Committee (CVESC) – the Chair made the point that there was on-going work to evaluate the risk profile and capital investment criteria which had been overseen by the CVESC. A lot of work had been undertaken by the CVESC at informal meetings but so far nothing had formally come to that Committee so far. He asked for assurances that a report would be formally put forward and that the Overview and Scrutiny Committee would be consulted. This was a very important area as it was looking at management information about investment performance as well as setting criteria for future investment. The Overview and Scrutiny Committee would also want to comment on proposals. The Executive Member for Finance gave those reassurances. CVESC, since its establishment in May, worked in both a formal and informal setting. These items would eventually come through to a formal meeting for discussion.

·       Social and environmental impacts – Members asked if the Council reviewed any undue environmental impact of capital investment schemes while looking  ...  view the full minutes text for item 6