The Corporate Director Finance, Governance and Property introduced the report and stated that the report set out the approach to capital borrowing over the coming years, as well as outlining prudential indicators. He stated that the report also contained the capital and treasury management strategy, and in previous years would have outlined the targets for investment and the investment approach. He explained that as the council were no longer pursuing new investment opportunities, the report was now based on existing capital investments, which meant that future borrowing requirements had decreased. The Corporate Director of Finance, Governance and Property highlighted point 3.3 of the report and stated that this was the same as previous years, and included temporary borrowing which had been undertaken since 2010. He explained that this also outlined changes to interest and the ability of the Council to borrow, including the Council’s move to PWLB borrowing. He commented that the MRP had not changed, but was an annual requirement to be included in the report. He summarised and stated that current levels of net borrowing were between £300 and £400million.

The Chair highlighted table 4 on page 39 of the agenda, and questioned why the total future debt appeared to increase. The Corporate Director of Finance, Governance and Property replied that this was due to the decreasing number of investments which would not be replaced once they matured. He added that this also reflected the capital programme, for example the A13 project and ongoing HRA development, as this borrowing equated to funding the capital programme. The Chair then questioned the process for the sale of assets. The Corporate Director of Finance, Governance and Property replied that the asset team were currently reviewing and classifying all government assets. He stated that these had been classified into approximately 60-70 operational assets; 50-60 community assets; and 200 assets that did not fall into either of these categories. He explained that the assets team were liaising with all directorates to ascertain service needs, for example housebuilding or local plan development potential, and then deciding if the assets needed to be disposed or could be utilised. He explained that all asset disposals over £250,000 now needed to go through Cabinet for approval, and felt that asset disposal was not just about increasing capital receipts, but also about decreasing exposure and liability. The Chair queried what level of democratic oversight occurred for asset disposals. The Corporate Director of Finance, Governance and Property replied that the asset disposal would be brought before the relevant overview and scrutiny committee. He explained that the assets due to be brought forward to Cabinet in February were not controversial, for example some tenants wished to purchase the assets. He stated that the team were developing a flowchart process for housing sites, which would go before the Housing Overview and Scrutiny Committee.

Councillor Ralph sought reassurance that all assets would be properly valued before they were sold. The Corporate Director of Finance, Governance and Property replied that since 2019 all disposals over £250,000 needed to be agreed by Cabinet, and even disposals under £250,000 needed the agreement of the Leader. He stated that the Council had a legal duty to get best value for the disposal, whether that be monetary value or social value.

The Chair then questioned the Investments Committee, and if this was still continuing now the investment strategy had been paused. The Corporate Director of Finance, Governance and Property explained that the Shadow Investment Committee had had two meetings in 2020, which had included the Portfolio Holder for Finance and Transformation and all Group Leaders. He described how at the first meeting, a report had been provided by Candle Global who provided the Council with investment advice, and had brought forward a number of governance suggestions and KPI ideas, as well as the wider borrowing portfolios and ongoing investment. He stated that the Committee had not decided whether they would be a formal Committee, and therefore follow Constitutional rules such as democratic proportionality, or would be a Shadow Committee. The Corporate Director of Finance, Governance and Property then explained that the Committee had met in December 2020 where they had been provided updates regarding the investment strategy pause. He added that the Committee had another meeting in a few weeks’ time where they would be monitoring ongoing investments. He added that due to the pause in the investment strategy, the Committee would also be deciding if there was a need for the Committee or if it could be reabsorbed back into Corporate Overview and Scrutiny Committee or the Standards and Audit Committee.

RESOLVED: That the Committee:

1. Commented on the 2021/22 Capital Strategy for consideration by Cabinet at their meeting on 10 February 2021.