Agenda item

Cabinet Member: Leader

Forward Plan Ref: 2018/134

Contact: Alexandra Bailey, Director of Capital & Investment Delivery Tel:07768 027257; Lorna Baxter, Director of Finance Tel: 07393 001218; Owen Jenkins, Director for Operations Tel: 07554 103542

Report by Strategic Director for Communities (CA7).

To approve the inclusion of significant investment in the Council’s assets as part of the proposed Capital Programme to 2029, the funding for which will be included in the proposed Budget for 2019/20 and Medium Term Financial Plan to 2022/23 which will be considered by Cabinet in January 2019.

The Cabinet is RECOMMENDED to:

(a)          note the report; and

(b)          approve the inclusion of significant investment in the Council’s assets as part of the proposed Capital Programme to 2029, the funding for which will be included in the proposed Budget for 2019/20 and Medium Term Financial Plan to 2022/23 which will be considered by Cabinet in January 2019.

Cabinet had before it a report which sought approval to the inclusion of significant investment in the Council’s assets as part of the proposed Capital Programme to 2029, the funding for which would be included in the proposed Budget for 2019/20 and Medium Term Financial Plan to 2022/23, which was due to be considered by Cabinet in January 2019.

Councillor Bob Johnston, local member for Kennington & Radley, whilst welcoming the recommendations commented on the need to ensure that the correct resource, staff and project management were in place to administer the investment and to ensure that any potential contractors were also pre-assessed to ensure that they had the right skill sets.

Councillor John Sanders, Shadow Cabinet Member for Environment spoke in support of the report. He believed that the only way out of austerity was to invest and that this was an excellent plan in this regard.  He believed that you could not achieve growth without investment and that the growth had the potential to boost funding for the Council.  He cautioned the Cabinet to take note of the changes in demography and increase in population as they were key to determining future infrastructure needs and to take note of past contract issues and urged the Cabinet to keep as much of the work in-house as possible and to, at the very, least keep the management of the project in-house.

Councillor Charles Mathew, local member for Eynsham, whilst having sympathy for the need of further investment in schools and highways, expressed concern over further external borrowing in addition to £350m current external borrowing which currently cost the Council £16m per year.  He believed the Council should be decreasing not increasing external borrowing.  The present plans suggested that the extra potential council tax to 2023/24 could service any extra loan.  He cautioned that this was inappropriate measure at this time when all the Council finances were under such pressure.   He urged the Cabinet to only use internal borrowing and that external borrowing was used only if there was guaranteed means to repay it.

Councillor David Bartholomew, Cabinet Member for Finance responded to the financial points raised.  He reassured members that each project would be dealt with prudence and caution, have its own individual business case and would be carried out over a number of years when the Council was sure that it had the Council Tax base growth to fund it, so that the Council did not spend the money until it was sure the money was available and that resources would be identified at that time. 

Although Councillor Bartholomew agreed that internal borrowing was preferable, he did not feel that it was appropriate to tie the Treasury Management Team in to internal borrowing if circumstances arose when a much better return could be achieved with external investments and the capital funding was obtained via the PWLB. 

Councillor Ian Hudspeth, Leader of the Council moved the recommendations and responded to the points made explaining that this investment was key to the growth deal and by investing in the highways and infrastructure now it would free up resource to provide vital services to protect the most vulnerable.  This investment together with the growth deal was showing true investment in Oxfordshire’s economy.  Better connectivity would encourage more businesses to Oxfordshire generating additional business rates which could be reinvested into services.  He confirmed that the Council would be taking a cautious phased approach which would include very careful monitoring.

RESOLVED:  to:

(a)          note the report; and

(b)          approve the inclusion of significant investment in the Council’s assets as part of the proposed Capital Programme to 2029, the funding for which will be included in the proposed Budget for 2019/20 and Medium Term Financial Plan to 2022/23 which will be considered by Cabinet in January 2019.