Issue - meetings

To review the Capital Investment Strategy that was adopted by Executive in July 2020 in support of service and financial planning for 2021/22 onwards.

Members reviewed the Capital Investment Strategy that was adopted by Executive in July 2020 in support of service and financial planning for 2021/22 onwards.

Councillor T. Schofield, Portfolio Holder for Finance, introduced the item. The Strategy sets out the approach to capital investment and forms a key part of the Council’s governance arrangements. It ensures that investment and financing plans can be prioritised and makes sure that capital decisions take account of stewardship, value for money, prudence, sustainability, affordability and risks. The Strategy also sets out the approach to evaluating and monitoring assets owned by the Council. The Commercial Ventures Executive Sub-Committee has responsibility for evaluating use of assets and potential future capital investments.

Members had asked 10 Advance Questions. These ranged from issues such as commercial returns, working with external advisers on investment planning and reviewing commercial opportunities. Written responses had been provided to Members with further answers to come. More detailed answers would also be given as part of the budget scrutiny process.

·         Capital receipts and repaying grants – Members asked why a grant might need to be repaid after the sale of an asset. It was confirmed that sometimes the terms of an historic grant funding agreement specified repayment of the grant after an asset was sold.

·         Woodhatch Crematorium – it was noted that the funding for this project would come from the £50m budget set out in the approved Capital Programme. All proposals for use of this capital allocation were considered by the Commercial Ventures Executive Sub-Committee against appropriate governance criteria and a commercial checklist before approval. If the Crematorium project was approved, then spending on this item would be clearly reported in quarterly budget monitoring reports.

Councillor T. Archer, Portfolio Holder for Investments and Companies confirmed that the new Commercial Strategy would be considered by Overview and Scrutiny at its December meeting. This would include principles to guide decision-making on potential commercial investments and activities.

RESOLVED – that the Capital Investment Strategy for the 2020/21 financial period be noted and the Committee’s observations and comments be considered by the Executive.

To consider the Capital Investment Strategy 2021/22.

RESOLVED That the Capital Investment Strategy be adopted as the framework for the capital programme elements of service and financial planning for 2021/22 onwards.

Councillor Schofield, Executive Member for Finance and Deputy Leader of the Council presented the Capital Investment Strategy 2021/22. The Strategy described how the Council’s capital decisions took account of stewardship, value for money, prudence, sustainability, and affordability. This was the second year since the requirement to publish a Strategy had been introduced, and it now included more detailed information about the assets owned by the Council, how they were used and how they were performing. It also included information about the new assets that the Council was planning to invest in and how they would be funded.

The Strategy reflected the outcome of the work that had been carried out over the past year to further develop the Council’s approach to capital and commercial investment, which was overseen by the Commercial Ventures Executive Sub-Committee, and Officer Board.

Councillor Schofield affirmed that further work would be undertaken on future capital investment plans as part of the 2020/21 service & financial planning process.

In response to questions and observations from Visiting Members, Councillor Schofield explained that:

·       To date no external borrowing had been necessary to acquire existing buildings, and the guidance on Minimum Revenue Provision would apply to any new borrowing

·       Whilst the gross yield on buildings was stated in the Strategy, the interim Head of Finance would provide an update on the net yield to Members present, after the meeting

·       The proposed changes to the availability of Public Works Loan Board funding will be taken account of, when confirmed

The Leader of the Council thanked the Executive Member for Finance; and commended the detailed work produced by the interim Head of Finance, her team, and the property services team in preparing the Strategy.

RESOLVED That the Capital Investment Strategy be adopted as the framework for the capital programme elements of service and financial planning for 2021/22 onwards.

Reason for decision:

The Council is required to set a budget by 11 March each year. This report and the associated documents will support this obligation for 2021/22.

Alternative options: As set out in the report, and decision notice.