Agenda item

To consider an Investment Opportunity.

The Leader of the Council outlined the report. He said reduced funding from central government had put pressure on the budget and if the Council was to continue to provide the current level of services, additional income needed to be generated through investment opportunities such as this one. The investment project came in two stages. The decision to proceed with Phase Two of the investment would be brought for Council’s consideration during the 2020/21 financial year.

Councillor Khan said he agreed that additional income was needed to maintain council services but the report inadequately informed Members of the risk management measures that would be implemented to safeguard the Council’s interests. Furthermore, the Investment Board had only heard indirectly from independent investment advisors, and legal advice had only been received the night before. This was a matter of procedure and governance and he asked for the decision to be deferred until further information was provided.

Councillor Caton said the report only outlined the “best case scenario.” He requested that members be given “worst” and “mid-case” scenarios to assist in their deliberations. More robust procedures needed to be put in place by the Council as a stronger risk analysis was needed before taking such a decision.

Councillor Fairhurst said this was an exciting moment but the opportunity should not be taken on “blind faith”. Further information was required before Members could be asked to make a decision of this importance.

Councillor Lees said the investment had to be made to ensure the continuation of council services. Investments, by their nature, were uncertain but Members could only make a decision based on the evidence before them. She said due diligence had been carried out and she supported the recommendation.

Councillor Coote said the governance surrounding the investment process did require improvement, but there was no alternative in the face of budget cuts other than to support this investment opportunity.

Councillor Lavelle said more time was spent on risk management than any other aspect of this investment during the Board’s deliberations. He said the risks of such an investment had been considered carefully and effectively.

Councillor Light said she accepted that income would need to be generated through investments but she could not support this opportunity due to the lack of information presented to Members.

Councillor Hargreaves said legal advisors were satisfied with the Council’s approach to the investment and such advice had been circulated with members of the Investment Board.

Councillor Khan said he was not anti-investment or risk averse but there was not enough evidence before him to make a decision. He proposed deferral of the item.

The Chief Executive said the debate could be adjourned which, in effect, would defer the item.

Councillor Khan proposed for the debate to be adjourned. Councillor Light seconded and requested a recorded vote.

The Leader said he was perturbed that Liberal Democrat members had numerous opportunities to raise their concerns at the Investment Board but had waited until Full Council to “kick the can down the road”. The Council would be in financial difficulty if an investment was not made.

Councillor Barker said she agreed and the Council needed to continue down the road of investment to ensure services were maintained.

The vote to adjourn the debate was as follows:

The motion was defeated: 6 for, 26 against and 2 abstentions.

The Chair moved to a vote on the original motion as set out in the report:

Council RESOLVED:

i)              To endorse the acquisition of Phase 1 of Investment Opportunity 2; and

ii)             To authorise the necessary borrowing as set out in the reports, to a maximum of £32 million.

The Chair adjourned the meeting at 6.15pm. The meeting was reconvened at 7.30pm and the public were readmitted.

Councillor Bagnall arrived at 7.30pm and participated in the remainder of the meeting.