Agenda item

Context:

Chartered institute of Public Finance and Accountancy (CIPFA) produced a revised regulatory Code in December 2017, which included a need for local authorities to produce a Capital Strategy. The requirements were staggered with an aim for reporting compliance during 2018/19 with a full Capital Strategyimplemented for 2019/20. This report concentrates on the former in evaluating the governance, planning and priority setting involved in presenting 2019-20 capital budget proposals and the 3 years thereafter making up the collective capital medium term financial plan.

The overall purpose of a capital strategy being to provide opportunity for engagement with Full Council to ensure overall strategy, governance procedures and risk appetite are fully understood by all elected members

The code, in describing the Capital Strategy, reports it can be delegated to

Cabinet (or similar body) with Full Council being responsible. MCC’s approach is to report budget setting process through Cabinet, with consideration and approval of the future capital programmes resting with full Council. The Council’s Constitution is consistent with compliance requirements. It is anticipated that the actual resulting capital strategy will be reconciled and consistent with a wider financial strategy and both available for consideration during the spring cycle of meetings.

Member Scrutiny:

A Member referred to Sections 4.7 and 4.10 and raised concerns regarding the formation of a housing company which the Council has already mandated, but acknowledged the lack of provision for this within the report.  The need for housing and business generation would suggest that the housing company would be a priority.  The Assistant Head of Finance explained he realised the importance of affordable housing and looked towards the administration involved in setting up a company in relation to how it applies to the need to set up a capital strategy.  This report was not seeking approval for such a company to be set up.

Concerns around affordable housing continued to be expressed, particularly the lack of emphasis on this within the Capital reports.  The Cabinet Member for Resources explained that, with regards to Housing Development Company, a report will be brought to Council in April 2019. Research is underway regarding the setting up of a development company, not necessarily specifically a housing development company.  The report to Council will clearly set out the proposals.

Councillor Watts advised that representatives of Bristol City Council are willing to discuss the pitfalls they had experienced through the same process, which he considered a better resource than the use of consultants.  The Cabinet Member assured that there would be a meeting with Bristol, as well as Welsh authorities.

The Chief Officer for Resources understood the concerns and agreed that forming a housing company today would not solve all problems, so he aims to balance our resource to make sure we are getting the acquisitions through to deal with our commercial strategy; making sure we are making suitable and adequate progress on our strategic sites; making sure we are doing all the groundwork to be well placed to move forward when proposals are brought to Council.

Councillor Watts added that 33% of the children in his ward live in deprivation, due to families being susceptible to disproportionately high rental charges.  He was keen to express the urgency of the matter.  

The Cabinet Member advised the purpose of a development company rather than a housing company would be to avoid complications around the terms of the housing stock transfer.

The Chair highlighted upcoming workshops around the LDP.

Recommendations:

The Economy and Development Select Committee resolved to agree the recommendation:

To consider and provide feedback upon the budget assumptions, pressures and savings proformas affecting this Select portfolio area.