Agenda item

It is a statutory requirement for local authorities to produce an annual Capital Strategy.  The Capital Strategy brings together the Council’s detailed policies, procedures and plans relating to cash investments and property assets.  It incorporates the Treasury Management Framework, Prudential Indicators and Property Investment Strategy for 2020/2021.  

Recommendation

The Executive recommends to Council that the Capital Strategy for 2020/2021, incorporating the Treasury Management Strategy, Prudential Indicators and Property Investment Strategy, is approved.

Cllr Jerry Hyman left the meeting before the start of consideration of this item.

61.1    The Leader moved the recommendation to approve the Capital Strategy for 2020/21, which was seconded by Cllr Paul Follows. The Leader invited the Portfolio Holder, Cllr Mark Merryweather, to present the proposals.

61.2    Cllr Merryweather reported that it was a statutory requirement for local authorities to produce an annual capital strategy. The Capital Strategy brought together the Council’s detailed policies, procedures and plans relating to cash investments and property assets. Only minor amendments were proposed to the Treasury Management strategies. More substantive changes were proposed to the Property Investment Strategy, to allow the Council more scope to explore investment opportunities that would generate an income for the Council. The current property portfolio was wholly commercial office, industrial and retail space, and heavily concentrated in Farnham. Having taken legal advice, it was now proposed to diversity and invest in open market rental residential property, and it was expected that the most attractive opportunities would be those where the Council had the strategic cost advantage of building on its own land. These developments would be in addition to the Housing Revenue Account, and would contribute to Waverley’s Local Plan housing targets, be built to a high standard of design, and the rental income would contribute to Waverley’s General Fund balance.

61.3    The Property Investment Strategy continued to keep risk and good governance at the heart of decision-making and these sections had been strengthened. The Strategy also now reflected the Council’s Climate Change commitment.

61.4    Cllr Peter Martin was pleased to support the Capital Strategy, although he had some reservations about the move into residential property, and the proposal to keep investments within the confines of the borough. However, all proposals were considered on a case-by-case basis and assessed against the agreed criteria. He also had concerns about whether the budgeted level of income could be achieved in 2020/21, but was content to support the Capital Strategy.

61.5    Cllr John Gray noted that the Executive had reduced the number of independent members on the Investment Advisory Board, and that the Audit Committee had not had an opportunity to review the proposals, which had been submitted to the Value for Money Overview & Scrutiny Committee instead. He noted also that since the elections in May 2019, the Audit Committee had not yet reviewed its terms of reference, which the committee had previously agreed to do at its first meeting in the new council year. This was important because of the potential confusion in the roles of Audit Committee and O&S, and their respective lines of reporting. Given the substantial sums of money that would need to be invested to generate the required level of income, and the risks involved in property investment, Cllr Gray was concerned that the Audit Committee had not had an opportunity to review the Capital Strategy. There was not sufficient time in Council to review such technical documents and he felt that the Audit Committee should be able to review these thoroughly and seek assurances or independently raise concerns if necessary.

61.6    Cllr Merryweather responded by assuring Members that he was fully aware of the risks of property investment, but some carefully considered risks would be necessary in order to generate income to balance the General Fund. Cllr Merryweather welcomed the interest of the Audit Committee in the Capital Strategy, and their having a stronger role in it.

61.7    The Mayor put the recommendation to approve the Capital Strategy for 2020/2021, and

            Council RESOLVED that the Capital Strategy for 2020/2021, incorporating the Treasury Management Strategy, Prudential Indicators and Property Investment Strategy be approved.

For 46

Cllrs Brian Adams, Christine Baker, David Beaman, Roger Blishen, Peter Clark, Richard Cole, Martin D’Arcy, Kevin Deanus, Sally Dickson, Brian Edmonds, Patricia Ellis, David Else, Jenny Else, Jan Floyd-Douglass, Paul Follows, Maxine Gale, Michael Goodridge, Michaela Gray, Joan Heagin, Val Henry, George Hesse, Daniel Hunt, Peter Isherwood, Jacquie Keen, Robert Knowles, Anna James, Andy MacLeod, Peter Marriott, Michaela Martin, Peter Martin, Mark Merryweather, Kika Mirylees, John Neale, Peter Nicholson, Nick Palmer, Julia Potts, Ruth Reed, Paul Rivers, Penny Rivers, John Robini, Anne-Marie Rosoman, Trevor Sadler, Liz Townsend, John Ward, Steve Williams, George Wilson

Abstentions 4

Steve Cosser, Mary Foryszewski, John Gray, Penny Marriott

Against 0