Executive Minutes

Date:
Thursday, 22nd June, 2017
Time:
7.30 pm
Place:
New Council Chamber, Town Hall, Reigate
 

Attendance Details

Present:
Councillors V. Broad (Leader); Mrs N. Bramhall, K. Foreman, Dr L.R. Hack, A. Horwood, G.F. Knight, Mrs R. Mill, Mrs R. Renton and T. Schofield.
Also Present:
Councillors Mrs R. Absalom, D. Allcard, M. Blacker, J. Essex and C.T.H. Whinney.
Min NoDescriptionResolution
Part I
1 MINUTES

RESOLVED that the minutes of the meeting held on 18 May 2017 be approved as a correct record and signed.

2 APOLOGIES FOR ABSENCE

Executive Members: Councillor E. Humphreys.
Non-Executive Members: Councillors J. Ellacott and D. Pay.
 

3 DECLARATIONS OF INTEREST

None.

4 FIVE YEAR PLAN PERFORMANCE REPORT 2016-17

The Leader of the Council, Councillor V.W. Broad reminded the Executive that in December 2014 it approved the Council’s Five Year Plan to commence in 2015-16.


This plan recognised that the Council was already a high performing organisation and the Plan focused on identifying the vision and objectives over the medium term period. The plan sought to ensure that the Council continued to meet the needs and aspirations of our residents and Members, whilst overcoming the challenges (particularly financial) facing the organisation, and the wider local government sector, over the plan period.
The report outlined the Council’s performance against the Five Year Plan priorities for the period 1 April 2016 to 31 March 2017 with a detailed analysis showing how the Council had performed as monitored via the biannual residents’ survey.


The Executive were delighted to note the significant progress that had been made against the Five Year Plan’s priorities across the Council which covered the themes of People; Place and Organisation as summarised below:
• supporting residents into employment
• working with and supporting our partners
• encouraging healthy lifestyles
• improving safety
• encouraging businesses to thrive and grow
• ensuring our towns and public spaces were clean and attractive
• establishing a Development Management Plan (DMP)
• striving for financial self-sufficiency
• communicating and engaging with our residents and businesses
• increasing the value of, and income derived from, the Council’s property and assets
• maximising the potential of our staff


It was also noted that there would be a review of the Five Year Plan in the latter part of 2017 so that it remained relevant to 2020. The Executive noted a Member comment in relation to measuring performance on local environment improvement indicators as well as People, Place and Organisation.


RESOLVED that the positive progress on implementing the second year of the Council’s Five Year Plan (2015-2020) for the 2016-17 period as set out in the report be noted.


Reasons for decision: To receive the Five Year Plan progress for 2016-17.


Alternative option: None.
 

5 ANNUAL GOVERNANCE STATEMENT

The Executive noted that the Council was required to publish an annual statement on its corporate governance arrangements, which would accompany the Council’s annual Statement of Accounts.


Statutory regulations recommend that the body charged with overall responsibility for governance within the Council (in this case the Executive) should review and endorse the statement prior to its formal signature by the Leader of the Council and the Chief Executive.


A statement for the year ended 31 March 2017 was presented to the Executive as an Annex to the report and was based on the following sources of evidence:
• Annual Internal Auditor Report.
• External Audit and Inspection Reports.
• Issues identified from the Council’s Risk Registers.
• Annual assurance statements signed by the Management Team that confirmed that the Council had achieved ‘best value’ and had complied with all relevant legislation, regulations and codes of practice.


The statement included reference to the independent opinions of the Council’s internal and external auditors, which provided considerable assurance in respect of the Council’s governance arrangements. These also identified some enhancements to the framework of risk management, governance and internal control that would ensure that it remained adequate and effective.


Overall the Council was confident that it had good governance arrangements in place to ensure that resources were directed toward identified priorities which in turn would seek to ensure continued value for money.


The Executive recognised that there was always room for improvement but overall the control and governance framework had been judged to be sound by all who examined it.


RESOLVED that the Annual Governance Statement set out in Annex 1 to the report of the Executive be endorsed.


Reasons for decision: To consider the Council’s Annual Governance Statement before it was included within the annual Statement of Accounts.


Alternative options: To reject or amend the contents of the statement.
 

6 SERVICE AND FINANCIAL PLANNING PROVISIONAL OUTTURN 2016/17

The Executive Member for Finance, Councillor T. Schofield, presented the report on the 2016/17 provisional outturn for the revenue budget and capital programme which had recorded underspends respectively of £1,035,200 and £2,140,000. The Executive Member referred to the external constraints that had made it a difficult year but with careful budget management and a shrewd commercial approach to business had resulted in an exceptionally better year than could have been predicted.


Councillor Schofield was therefore pleased to report on such a positive outcome to the year. The report identified and explained key variances in the revenue budget noting in particular some of the reasons for our success being improved recyclate prices, increased car parking income, increased supply of temporary accommodation and preventative activity leading to reduced B&B accommodation costs.


In relation to the capital programme, it was noted that the main components of the 2016/17 underspend had been marginal. A significant amount of capital projects had been delivered which supported the Council’s objectives. The unspent budget would remain in the Council’s capital reserves.


The Executive Member also referred to the importance of the 5 Year Plan objectives, particularly in seeking to ensure that the Council achieved financial self sufficiency, acknowledging the necessity to identify new income streams to manage projected further reductions in existing funding.


Councillor T. Schofield therefore emphasised the importance of resourcing the 5 Year Plan priorities properly to achieve the Council’s financial objectives. He proposed therefore that the revenue underspend be used to replenish funds within the Corporate Plan Delivery Fund (CPDF) with a further £2.272m being transferred to this fund from reserves to bring the balance on the CPDF to a sensible working balance of £4.0m.


The Executive also noted the treasury performance for the year; confirmed that no prudential limits had been breached and that all decisions had been taken in accordance with the Treasury Management Strategy.


The Overview and Scrutiny Committee considered the report on 13th June 2017 and made no comments for the Executive’s consideration.


RESOLVED that:


(i) the provisional revenue and capital outturn position for 2016/17 be noted;


(ii) the use of reserves proposed in paragraph 10 of the report to the Executive be endorsed and the Finance Manager be authorised to make the necessary arrangements; and


(iii) the Annual Treasury Management Report (Annex 2 of the report to the Executive) be noted.


Reasons for decision: To advise Members of the revenue and capital expenditure for 2016/17, to seek authorisation for the proposed changes to reserves and to comply with the Council’s reporting requirements in relation to Treasury Management activity.


Alternative options: To amend the proposals to adjust reserves as set out in the report.
 

7 QUARTERLY PERFORMANCE REPORT (Q4 - JANUARY TO MARCH 2017)

A report was submitted which presented the headline issues in relation to the Council's overall performance for the period up to the end of Quarter 4 (January to March) of 2016/17.


Councillor T. Schofield, Executive Member for Finance informed the Executive that all of the Council’s 11 Key Service Indicators (KSIs) were on target or within agreed tolerances for the period.


The report also contained the current position on Strategic risks and Operational risks for 2016/17; the outcome of Internal Audit reports; the final progress report against the LGA Improvement Action Plan. In relation to the Action Plan it was noted that significant progress had been made and that the resulting activities had either been completed or incorporated in main work streams and that this was therefore the final report on this activity.


The Executive noted the potential financial implications arising from the possible withdrawal of recycling credits from Surrey County Council and Surrey Waste Partnership (which had been rated as a red risk in the Strategic Risk Register). The Executive also noted an additional Strategic Risk that had been identified in relation to Data Protection.


The report had been considered by the Overview and Scrutiny Committee on the 13th June 2017. The Committee welcomed the report and discussed a number of areas where the Council may want to consider further activities, which the Chief Executive was reviewing. The Committee made no formal observations for consideration by the Executive.


RESOLVED that the performance outlined in the report be noted.


Reasons for decision: To consider the performance for the fourth quarter of the financial year 2016/17 and progress update against the LGA Action Plan


Alternative options: None.
 

8 ACQUISITION OF FREEHOLD REDHILL

Councillor Mrs N.J. Bramhall, Executive Member for Property and Acquisitions informed the Executive that as part of the Council’s ongoing property investment and development strategy, as set out in the 5 Year Plan, the Council was considering acquiring an office building in Redhill as an investment opportunity.


It was noted that Heads of Terms had been agreed subject to Executive and Full Council approval. Given the short notice, as was common place in the property market, the report had been brought urgently to this meeting. To ensure that the acquisition was included in the Council’s Capital Programme it was subject to Full Council approval.


The Executive noted that the proposed property acquisition was an attractive office investment that was anticipated to provide an estimated initial return of 6.47% pa for the Council. There were further asset management opportunities in the building which might produce additional revenue. The income stream from this purchase would be used to support the Council’s Service and Financial Planning activities.


The due diligence activities were proceeding and subject to the result of those being satisfactory it was anticipated that completion of the purchase would be on the 30th June 2017.


The Executive noted that, as the matter was a Key Decision it should have been identified on the published 28 Day Notice by the Council. Due to the strict bidding timetable this had not been possible. The Chairman of the Overview and Scrutiny Committee had therefore been consulted in accordance with the Access to Information Rules in the Constitution.

 

Additionally as the acquisition must proceed quickly to achieve the vendor’s timetable the Mayor had approved the disapplication of the Call-In procedure and had agreed that an Extraordinary meeting of Full Council be arranged for 29 June 2017 to consider the Executive’s recommendations.


RECOMMENDED that the purchase and funding for the acquisition of the Freehold interest of the property in Redhill as detailed in the part 2 report to the Executive be approved (noting it was subject to a number of occupational interests).


RESOLVED that the Head of Property and Head of Finance, be authorised, in consultation with the Executive Members for Property and Acquisitions and Finance to acquire the Freehold referred to in the report to the Executive (part 2 section).


Reasons for decision: To proceed with this property acquisition to support the Council’s 5 Year Plan objectives to become financially self sufficient.


Alternative options: Investigate alternative property acquisitions or do nothing.
 

9 AMENDMENT TO CAPITAL PROGRAMME

Councillor T. Schofield, Executive Member for Finance, reminded the Executive that the Council had set out in its 5 Year Plan and Treasury Management Strategy the need to become financially self-sufficient from 2020.

A key part of that strategy was to utilise the Council’s capital and assets to generate revenue income to support front line services.

 

In April and February 2017 respectively the Council approved the Treasury Management Strategy and Capital Programme for 2017/18 and beyond. This included the provision to maximise borrowing at £80m and provided for £40m to be set against specific long term property investments.

 

The Executive Member emphasised that the purpose of this report was therefore to provide greater flexibility to enable the Council to use the approved capital and borrowing to respond to investment opportunities. The report had been brought to the Executive as a matter of urgency following the identification of the investment opportunity detailed above.

 

The proposed amendments, as set out in paragraphs 14 and 15 of the Executive’s report would ensure that the Council had flexibility to respond swiftly to opportunities and secure the best deal for the Council and taxpayer.

The Executive noted that key decisions to be considered by the Executive should be included in a 28 Day Notice indicating the business that was to be transacted in public and private meetings of the Executive.


As this matter had only recently been identified the proposed business was not included in the published 28 Day Notices of business for this meeting of the Executive. As required by the regulations, the Chairman of the Overview and Scrutiny Committee had been consulted about this matter being brought forward to the Executive for the following reasons of urgency:
• The Treasury Management Strategy and Capital Programme were approved by Council in April and February. The property schemes identified within that programme had changed in response to property investment opportunities and there was a need to adjust the Council’s Capital Programme to comply with the Council’s financial procedures;
• The Property Investment elements of the Capital Programme needed to be clarified so that there was no delay on the delivery of the projects; and
• To obviate a delay to the schemes identified Full Council be requested to update the Capital Programme without delay at an Extraordinary meeting on 29 June 2017.


Following Member requests for clarification on the wording of the recommendation it was


RECOMMENDED that the Capital Programme be amended (in relation to the portfolio of property investments to incorporate Loans and Transfers to Property Companies, other investments and the investment in Marketfield Way) as set out in paragraph 14 of the report and that the supporting amended borrowing requirements as detailed in paragraph 15 of the Executive’s report be approved.

 

Reasons for decision: To ensure that the Council was able to respond flexibly to commercial opportunities in the property market to deliver the Capital Programme.


Alternative options: To not amend the Capital Programme.
 

10 STATEMENTS

The Leader of the Council made a statement in relation to the plans that the Council had in place to manage an emergency in the Borough.

11 ANY OTHER URGENT BUSINESS

None.

12 EXEMPT BUSINESS

RESOLVED that members of the Press and public be excluded from the meeting for the following items of business under Section 100A(4) of the Local Government Act 1972 on the grounds that:


(i) it involved the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Act; and

 

(ii) the public interest in maintaining the exemption outweighed the public interest in disclosing the information.
 

Part II(Confidential)
13 ACQUISITION OF FREEHOLD REDHILL
  • Item 13: Confidential Material - Acquisition of Freehold Redhill (48K/bytes)

The Executive Member for Property and Acquisitions, Councillor Mrs N.J. Bramhall informed the Executive of the various detailed financial information (including acquisition costs), details of occupational tenants and the asset management possibilities in relation to the proposed acquisition of a Freehold property in Redhill.


RESOLVED that the exempt information relating to the acquisition of a Freehold interest in Redhill be noted.
 

The meeting closed at 8.10 pm.