Agenda item

10:10

Report by the Director for Finance

Note: Section 5.1 to follow on Monday 11 January 2021

The Committee is invited to comment on the Capital & Investment Strategy and supporting strategies included in this report. The Capital & Investment Strategy forms Section 5 of the suite of budget papers that comprise the Business and Budget Planning 2021/22 report considered by Cabinet on 19 January 2021 and Council on 9 February 2021.  

The Committee is RECOMMENDED to consider and comment on:

a)               The Capital & Investment Strategy (Section 5.1), incorporating

                       i.       The Treasury Management Strategy 2021/22 (Section 5.2)

                     ii.       The Investment Strategy 2021/22 (Section 5.3)

                    iii.       The Property Strategy (Section 5.4)

b)              The Draft Capital Programme 2021/22 to 2030/31 (Section 5.5)

c)               Changes to the Capital Programme (Section 5.6)

Lorna Baxter, Director for Finance, introduced the item.  She summarised the Capital and Investment Strategy (Section 5.1 in Addenda 2). Members were invited to provide comments for the discussion at Cabinet on 19 January 2021. 

Treasury Management

Tim Chapple, Treasury Manager, summarised the Treasury Management and Annual Investment Strategies (Section 5.2 in Addenda) and responded to questions from Members as follows:

·         The figures in Paragraph 82 were correct and the discrepancy with figures in Paragraph 5 will be corrected in the versions of the documents for Cabinet and Full Council.

·         The figure for Capital and Developer Contributions in Paragraph 15 was a combination of capital grants, capital receipts and developer contributions.

·         All of the Capital and Developer Contributions are forecast to be spent over a 10 year period and therefore it would not be prudent to use a proportion of it to invest in external funds as it is necessary to take a 10 year view.

·         The last sentence in paragraph 35 indicated that borrowing for OxLEP may take place earlier in the year if interest rates are forecast to increase towards the end of the year.

·         While the Bank of England had not ruled out negative interest rates it would be a draconian measure and was not considered likely.

Councillor Charles Mathew asked that consideration be given in this budget to raise the limit on investment in external funds from £101m to £125m as he believed that the rates available were worth what he saw as a minimal risk.

Investment Strategy

Steve Jorden, Corporate Director, Commercial Development Assets and Investment, summarised the strategy and responded to Members’ questions as follows:

·         Members should send to him a list of any Council owned properties in their area, not being fully utilised.  Due to workloads, there was a need to prioritise the work of the property team.

·         He did not have detailed information on the proposal in Eynsham West listed on Addenda Page 39 but would communicate with the local Member after the meeting (ACTION).

·         Work was proceeding on the One Public Estate programme.  The Council was talking with District Councils, the Fire Service and the University on possible sharing of properties.

·         Post-COVID there may not be the same need for office space which may raise the possibility of sharing space with other partners.  Currently the emphasis was on exiting costly leases.

·         Meetings will not continue to be entirely online but may be a hybrid mix of some people in a room and others online.  There will therefore still be a need for a council chamber – members of the public should be able to attend physically – but whether the current chamber was the best option was open to question.

·         It was not proposed to invest in industrial property for the sole purpose of a yield but consideration would be given to developing social housing or investment for regeneration.

Property Strategy

Steve Jorden introduced the strategy.  Officers responded to questions from Members as follows:

·         The Council was working with the City Council on proposals for Speedwell House and he hoped that this would provide a platform for working together on other projects.

·         The £65.7m allocated for the strategy will be invested wisely to develop and improve the Councils property assets. Specific proposals will come forward for discussions with the Director for Finance to consider financial implications.

·         The Committee requested that non-operational smaller assets that had little value be reviewed annually.

Capital Programme

Lorna Baxter outlined the Capital Programme (Section 5.5) and the changes to it (Section 5.6).  She then took questions from Members:

·         In Section 5.6 the “Firm” projects were those starting in 2021/22 or 2022/23 whereas the “Pipeline” projects start beyond that and within the next 10 years.

·         The reference to Kiosk Replacement on Addenda Page 47 related to self-service kiosks in libraries.  She would have to come back to Members as to whether they were replacement equipment or for expansion of the service (ACTION).

The Chairman thanked officers for all the work on the budget and moved the resolution.

RESOLVED: to consider and comment on:

a)            The Capital & Investment Strategy (Section 5.1), incorporating

                     I.        The Treasury Management Strategy 2021/22 (Section 5.2)

                    II.        The Investment Strategy 2021/22 (Section 5.3)

                  III.        The Property Strategy (Section 5.4)

b)           The Draft Capital Programme 2021/22 to 2030/31 (Section 5.5)

c)            Changes to the Capital Programme (Section 5.6)