Issue - meetings

To consider Investment Opportunities 3 and 4.

Cabinet is meeting on Wednesday, 4 March and its comments and recommendations will inform the ‘Investment Opportunities 3 and 4’ report that is to be considered by Council.

Therefore, the Council report is to follow and expected to be circulated on Thursday, 5 March. The report and appendices considered by the Investment Board/Cabinet have been attached for information.

The Leader of the Council gave a summary of the report which requested that Council endorse the purchase of two investment opportunities and authorise the necessary borrowing. The Council was looking to diversify its assets. These investment opportunities had been considered by the Investment Board and Cabinet, and had been approved by both.

Councillor Fairhurst said he was concerned about the Council’s lack of an investment protocol, and that there was no separation of powers in the decision-making process. With the world experiencing an impending debt crisis and the onset of coronavirus, the Council should not consider it to be business as usual.

Councillor Dean said the Council was missing a clear strategy about where the borrowing programme was going. He was concerned that the Council would soon not only be investing to replace the hole that reduced government funding would leave in its finances, but to increase its spending levels further. As far as he was aware, there had not been any discussion about whether to increase the rate of council tax further.

The Portfolio Holder – Finance and the Budget said council tax had been increased for the upcoming year by the maximum the Council could raise it without holding a referendum. This was only being done to fill the gap in local government finances.

Councillor Barker said she was happy to see the investment opportunities being brought forward, but the Council should not lose focus on finding efficiencies and savings where possible.

In response to questions from Members, the Leader of the Council said markets recover, and market chaos should not prevent the Council from carrying out its business. Oversight of the investment process had been good and the investments had cross-party support. The Council would be prudent with income from these investments.

                        RESOLVED to

a) To endorse the acquisition of two investment opportunities

b) To authorise the necessary borrowing as set out in the reports

c) To allocate the income generated in 2020/21 for delivery of the objectives, including tackling climate change, contained in the Corporate Plan approved by the Council on 25 February 2020.

The meeting ended at 6.40pm.

To consider Investment Opportunities 3 and 4.

The Investment Board is meeting on Thursday, 27 February and its comments and recommendations will inform the ‘Investment Opportunities 3 and 4’ report that is to be considered by Cabinet.

Therefore, the report is to follow and expected to be circulated on Friday, 28 February. The report and appendices to be considered by the Investment Board have been attached for information.

RESOLVED to endorse the conclusions of the Investment Board and that:

a.    The property purchases as set out are agreed:

i.               Investment Opportunity 3, up to the sum of £21,500,000

ii.              Investment Opportunity 4, up to the sum of £7,000,000

b.    The funding ratio is on an 80% interest only and 20% repayment basis.

c.     The purchase costs are capitalised.

d.   The purchases are made as a direct investment by Uttlesford District

Council.

e.    To authorise the Director of Finance and Corporate Services in

consultation with the Leader and Portfolio Holder for Finance and

Budget to conclude the acquisition; subject to recommendation f.

f.      To request Council to endorse the purchases and to authorise the

necessary borrowing.

g.    The income generated in 2020/21 is allocated to funding the actions,

including climate change, contained in the 2020/21 Corporate Plan

Delivery Plan.

The Leader said the investment opportunities before Members had been considered by the Investment Board and had been recommended for approval. He asked the Director – Finance and Corporate Services to present the report.

The Director – Finance and Corporate Services outlined the two investment opportunities and summarised the risks posed by the proposed acquisitions.

Members discussed the issues of parking, access and succession planning in regard to Investment Opportunity 3.

In response to a Member question, the Director – Finance and Corporate Services said these would be direct investments of the Council and not purchased through Aspire, the commercial arm of the Council. He added that this approach was supported by legal advice.

The Leader said the potential risks had been debated at length during the meeting of the Investment Board and he was more than comfortable with the proposal, particularly as the opportunities before Cabinet would significantly diversify the Council’s investment portfolio if accepted. He said the additional income generated by these investments would be used to maintain council services and fund the green agenda. 

RESOLVED to endorse the conclusions of the Investment Board and that:

a.    The property purchases as set out are agreed:

i.              Investment Opportunity 3, up to the sum of £21,500,000

ii.             Investment Opportunity 4, up to the sum of £7,000,000

b.    The funding ratio is on an 80% interest only and 20% repayment basis.

c.    The purchase costs are capitalised.

d.    The purchases are made as a direct investment by Uttlesford District Council.

e.    To authorise the Director of Finance and Corporate Services in

consultation with the Leader and Portfolio Holder for Finance and Budget to conclude the acquisition; subject to recommendation f.

f.     To request Council to endorse the purchases and to authorise the necessary borrowing.

g.    The income generated in 2020/21 is allocated to funding the actions, including climate change, contained in the 2020/21 Corporate Plan Delivery Plan.

The meeting ended at 5.15pm.