Agenda item

To consider the following finance related reports scheduled for Cabinet consideration on 18 March 2020:

·                Capital Investment Strategy (non-treasury) 2020-2025

The O&S Board is asked to scrutinise the reports and make recommendations to Cabinet as appropriate.

Cabinet members invited to attend for this item: Councillor David Brown, Portfolio Holder for Finance and Councilor Mark Howell, Portfolio Holder for Regeneration.

The Cabinet report will be published on Tuesday 10 March 2020 and available to view at the following link: https://democracy.bcpcouncil.gov.uk/ieListDocuments.aspx?CId=285&MId=3727&Ver=4

Capital Investment Strategy (non-treasury) – The Portfolio Holder for Finance introduced the report, a copy of which had been circulated and which appears as Appendix ‘F’ to the Cabinet minutes of 18 March 2020 in the Minute Book. The Board was advised that the strategy updated the legacy assets, including a financial appraisal at appendix B to the report. A key issue in asking Cabinet to approve the strategy was aligning with current corporate strategy. In the ensuing discussion several points were raised, including:

A Councillor suggested that paragraph 2.3.3 of the appendix should be removed. The Portfolio Holder responded that there was a need to make sure the portfolio was diversified. There would need to be a business case and due diligence for any change with a view to risk.

It was noted that BCP Council had inherited a number of investments through the preceding authorities and bringing them together within one strategy helped to provide a more balanced picture of the overall portfolio of the Council. At present there were certain investments in the portfolio which skewed the overall picture.

A Councillor commented that the net yield and profits percentages, as set out in Appendix 2, were far too low and therefore not worth taking the risk on the investments. The Board was advised that all investments would be scrutinised by the Section 151 officer who was content with this low risk strategy. The strategy aimed to find the right balance which could be reviewed periodically if not performing appropriately.

It was confirmed that Mallard Road retail park was not making a loss. The business plan was for a £1.8m surplus but it returned a £1.6m surplus. It was partly a long term investment in terms of property value. Original cost included fees.

The Board discussed the principle of investing within the BCP Council area. The Portfolio Holder noted that there was additional socioeconomic value if investing within area but by exception would look outside of the area if it would provide a particularly identified environmental benefit. However, there were plenty of investment opportunities within the local area.

Some of the Board members commented that the triple bottom line and proposal to invest within the area was limiting and showed a lack of ambition. The Portfolio Holder suggested that the strategy would ensure the best outcome for people of the area.

A Councillor asked about the Council’s Declaration of a climate change emergency and how an environmental impact would work for each case. The Board was informed that it would challenge the Council to look at the sustainable angle of investments and work with organisations to ensure that they become more environmentally sustainable but would be considered on a case by case basis to consider.

RECOMMENDED: That Cabinet amend paragraph 2.3.3 of Appendix A –‘Capital Investment Strategy (Non-Treasury) 2020-2025’ to remove all text following the end of the first sentence ‘In making an investment decision, the Council will take a balanced portfolio approach’.

Voting: For: 9, Against: 1, 3 abstentions Cllr G Farquhar asked for his abstention to be recorded.