Agenda item

(Report and annexes to follow)

The Overview & Scrutiny - Resources Committee is asked to consider the report and agree any comments or recommendations to be passed to the Executive on the proposed recommendations to Executive and Council as set out in the report.

68.1     The Senior Account addressed the Committee and introduced the Capital Strategy, Treasury Management Strategy, Asset Investment Strategy, and an infographic on the Capital Strategy. Notable changes to the strategies included:

·        A section about interest t be charged on internal borrowing incorporated into the Treasury Management Strategy 2024-25 due to increased internal borrowing as a result of mixed use schemes and housing development schemes, and;

·        The introduction of a new annexe to the Asset Investment Strategy 2024-29 outlining principles of appraisals and viability assessments.

68.2     Cllr Davidson noted an error in the ‘Prioritisation of capital projects’ table on page 5 of the Capital Strategy 2024-29, suggesting a reversal of the risk scoring such that a risk of greater than a £500,000 negative impact is displayed as score 1. Officers acknowledged this and confirmed that the correction would be made.

68.3     Cllr Atkins asked if standing asset investment appraisals will be revisited for current investments given the changes made to referred to in the principles of financial appraisals and viability assessments in annexe 2. The Senior Accountant clarified that this report does not propose reducing these period: maximum 50-year assessments are used for the General Fund and determined by the Minimum Reserve Provision (MRP) policy, while 60 year assessment periods have only been employed under the Housing Revenue Account as it is governed by different regulations.

68.4     The Chair asked if it were possible to achieve greater returns from investments over shorter payback periods, voiced concern over value for money and asked if the costs of pursuing non-monetary investment approaches could be more clearly communicated. The Senior Accountant clarified the differences between assessment periods and pay back periods, and ensured that full Value for Money reports, written by external consultants and which provide the costs of alternative options, will be provided to members in future. Officers agreed to return to members with a response regarding monetary and non-monetary options analyses at a future meeting.

68.5     Non-voting visiting member Cllr Austin noted information regarding the cost of alternative options was provided for the Cranleigh Leisure Centre, though only upon request. She also stated that she would like to see these provided as a matter of course in future.

68.6     Cllr Atkins raised a question regarding the use of asset register land values in land transfers between the HRA and General Fund. The Senior Accountant clarified that there is no planned change to including existing use value for HRA land within the viability assessment – this has been the procedure for some time. A ‘Do nothing’ option will be included in future reports to identify the existing value and revenue.

68.7     Cllr Atkins also queried the valuation methodology and the Council’s adherence to Royal Institute for Chartered Surveyors (RICS) standards and practices. The Portfolio Holder for Finance, Assets & Property clarified that RICS best practices and chartered surveyors are used in valuations, however the Council primarily uses the funding analyses and other comparables more suited to the strategic priorities of Local Authorities.

68.8     The benefits of conducting further discussions on land valuation methodology was proposed. The Chair proposed an informal follow-up meeting with the Senior Accountant, the Portfolio Holder for Finance, Assets and Property, and the Interim Executive Head of Finance to go through the contents of the briefing note with regard to the method of asset valuation, assessment periods and the social value of assets. Cllr Atkins and non-voting visiting member Cllr Austin volunteered to join the follow-up meeting.

68.9     Members noted the complexity of the report’s structure, specifically the segmented page numbering and inclusion of sub-annexes. The Committee suggested that the structure is simplified for future documents.

The Committee RESOLVED to note the report and requested that the Executive considers the comments made by the members of the Committee.