Members of the Committee are requested to bring their copy of the agenda for the Executive meeting on 6 October 2022.
Minutes:
The Committee considered the following reports on the Part 1 agenda for the meeting of the Executive on 6 October 2022:
(5) BUDGET MONITORING 2022/23
Report FSD22068
The report provided the first budget monitoring position for 2022/23 based on expenditure and activity levels up to the end of July 2022. The report also highlighted any significant variations which would impact on future years as well as any early warnings that could impact on the final year end position.
The Chairman reported that he had asked for some further information about the projected budget overspend for Legal Services and at the moment, excluding any invoices pending or waiting to be paid, around £150,000 of the expected £500,000 had been spent.
In response to a question concerning the cost of IT Procurement, the Director of Finance confirmed that the one-off costs had been built into the budget and the ongoing running costs needed to be built in. In terms of the revenue budget next year, costs would be reflected but not any direct saving as this was mitigated against future costs.
The Director of Finance also highlighted the impact of rising inflation on the contingency which had previously provided an element of flexibility. However, there was concern that the impact of inflation was now so significant that some of that flexibility would be lost. This would be reflected in the report presented to Members in January 2022.
RESOLVED: That the Executive be recommended to
1. Consider the latest financial position;
2. Note that a projected net overspend on services of £8,036k is forecast based on information as at July 2022.
3. Consider the comments from Chief Officers detailed in Appendix 2;
4. Note the carry forwards being requested for drawdown as set out in paragraph 3.3 of the report.
5. Note a projected reduction to the General Fund balance of £2,177k as detailed in section 3.4 of the report.
6. Note the full year cost pressures of £8.255m as detailed in section 3.5 of the report.
7. Agree to the release of funding from the 2022/23 central contingency as detailed in paragraphs 3.2.2 to 3.2.23 of the report;
8. Agree to the release of £600k from the Growth Fund reserve for the Local Plan review as detailed in paragraph. 3.9 of the report.
9. Identify any issues that should be referred to individual Portfolio Holders for further action.
10. Note the change in General Fund Earmarked Reserves as detailed in paragraph 3.12 of the report.
11. Recommend that Council agree a sum of £2.4m be drawn down from the 2022/23 contingency as detailed in paragraph 3.2.2 of the report.
(6) CAPITAL PROGRAMME MONITORING – 1ST QUARTER 2022/23
Report FSD22071
The report summarised the current position on capital expenditure and receipts following the first quarter of 2022/23 and sought the Executive’s approval to a revised capital programme.
RESOLVED: That the Executive be recommended to
1. note the report, including a total re-phasing of £4,482k from 2022/23 into future years, and agree a revised capital programme
2. approve the following amendments to the Capital Programme:
(i) increase of £8,478k to the Basic Needs capital scheme (paragraph 3.5.1 of the report)
(ii) addition of £383k of SCA grant and of £466k of Salix grant to the Capital Maintenance scheme (paragraph 3.5.2 of the report)
(iii) increase of £2,443k to the Disabled Facilities Grant capital scheme (para 3.5.3 of the report)
3. Recommend that Council approve the total increase of £8,478k to the Basic Needs capital scheme, £849k to the Capital Maintenance scheme, and £2,443k to the Disabled Facilities Grant capital scheme (see paras 3.5.1 to 3.5.3)
(12) URBAN DESIGN GUIDE SUPPLEMENTARY PLANNING DOCUMENT - CONSULTATION DRAFT
Report HPR2022/45
The report recommended that the draft Urban Design Guide Supplementary Planning Document (SPD) be published for six weeks public consultation.
The report had previously been considered by the Development Control Committee on 27 September 2022 and the Renewal Recreation and Housing PDS Committee on 4 October 2022.
A Member of the Committee expressed concern that an item that had already been scrutinised by a PDS Committee was being considered by the Executive, Resources and Contracts PDS Committee. In response the Chairman explained that he had been made aware that there had been some changes to the amendments proposed by the Development Control Committee, and he was using his Chairman’s prerogative to ask the Executive, Resources and Contracts PDS Committee to reaffirm the amendments proposed by the Development Control Committee.
RESOLVED: That the Executive, Resources and Contracts PDS Committee reaffirm the amendments proposed by the Development Control Committee on 27 September 2022.
(17) IT PROCUREMENT AND PROVISION (PART 1)
Report CSD22069
(Having previously declared a pecuniary interest the Chairman left the room, and the Vice-Chairman assumed the Chair)
The report provided an analysis of the work agreed by the Executive at its meeting on 30 June 2021 and set out options and recommendations for the Executive to consider on the future of IT Services including procurement options. The Portfolio Holder for Resources, Commissioning and Contract Management had been consulted on the analysis of options in this report. Any future changes to the IT infrastructure technology would be submitted for consideration and decision making by Members as and when necessary, as they would be part of the IT infrastructure transformation.
In response to a number questions, the Assistant Director for IT advised that the SWOT analysis was something that was undertaken for IT projects and had previously proved successful. The Assistant Director further advised that consultancy costs for the last two years related to IT projects and that some costs would be reduced as a result of the further in-house capacity.
The Assistant Director for IT further advised that the core service received from BT was good however a review of the market and value for money suggested that the best option would be to make increases to the in-house capacity to future proof the service and bridge the capacity gap. The Committee noted that where IT advice was needed, departments were required to approach the Council’s IT department in the first instance. If expertise was available in house this was utilised and where necessary external expertise was purchased.
The Assistant Director agreed to bring back paper prior to any extension after the initial five-year period.
RESOLVED: That the Executive be recommended to note the options explored in the report.
(18) PROPERTY INVESTMENT FUND PORTFOLIO – PORTFOLIO PERFORMANCE, INVESTMENT STRATEGY AND MITIGATION FUND (PART 1)
The report related to the Council’s Property Investment Fund Portfolio, providing an update to Members on the Portfolio’s performance, and setting out the proposed Investment Strategy and supporting Key Performance Indicators to be adopted.
Members noted that the retail sector had been struggling and this had resulted in an impact on the Council’s investments funds. However, some high street properties had been purchased for strategic reasons and the fluctuations in property value would only become an issue at the point the properties were sold. The Chairman noted that the high street properties were currently proving an income stream through the rent paid by tenants.
In response to a question, the Head of Estates and Asset Management advised that the report detailed 21 assets held in the Investment Fund which were intended to generate a revenue stream that supported Council service delivery. The properties were all let to tenants, and the key objectives were maximising revenue and mitigating against falling revenue. The Committee noted that in 2020 the Executive had taken the decision to bring in an external firm of Chartered Surveyors to provide advice on the Asset Management Plan for the Investment Fund and Officers were now seeking authority to proceed with the recommended strategy. In terms of resourcing, the Council’s Property Team was relatively slim, but it was a team of fully qualified Chartered Surveyors with support from an external resource which had already been bought in.
Members noted that the priority of the Investment Fund in 2014 had been to invest money and achieve income. The properties had been bought on a long-term basis and the report before the Committee set out that there had been a 13% return on the initial investment suggesting that the priority had been met. The Chairman also highlighted that there had been a great deal of scrutiny when the properties had been purchased.
A Member expressed concern around the approach being taken and the initial lack of active management of the investment property portfolio. It was suggested that a professional company should have been bought in to actively manage the portfolio from the start. The Member requested that the Committee have sight of the results of the active management strategy after the first year.
The Chairman advised the Committee that he had requested that consideration be given to a joint venture with Fidelity who managed the Pension Fund.
RESOLVED: That the Executive be recommended to approve
1. The adoption of the Investment Strategy (Strategic Objectives) as set out in Section 3.3 (3.3.21)
2. The adoption of the Key Performance Indicators as set out in Section 3.3 (3.3.23 – 3.3.25)
3. The creation of a mitigation fund equating to 10% of the rental income generated by the Investment Fund properties as set out in Section 3.3 (3.3.26 – 3.3.30) with reporting on this to be included within the annual ERC PDS portfolio performance reports.
4. Delegate authority to the Director, Assistant Director & Head of Estates & Asset Management in consultation with the Portfolio Holder for Resources to act within the adopted Strategy and Key Performance Indicators
5. The disbandment of the Property Investment Advisory Board to be replaced with regular Officer briefings to the Portfolio Holder for Resources for general asset management and performance updates with reporting to the Executive for material deviations from the adopted Investment Strategy and for key decisions such as acquisitions and disposals alongside the annual comprehensive performance report currently in place.