Agenda item

To consider the recommendations from the meeting of the Cabinet held on 3^rd May and 1^st June 2022.

The Chairman explained that recommendations had been made at meetings of Cabinet held on 3^rd May and 1^st June 2022 which had been highlighted for Members’ consideration at the meeting.

Treasury Management and Investment Strategy

The Portfolio Holder for Finance and Governance presented the Treasury Management and associated Investment, Capital and Minimum Revenue Provision Strategies.  Council was advised that these strategies detailed how the authority would deal with its debt and investments in the following financial year.  This included the Council’s prudential indicators, which local authorities had been required since 2003 to review, setting out the limits on borrowing and investing within which the Council needed to operate.

There was a statutory requirement for the Council to set these strategies on an annual basis, to report on progress on a half yearly basis and to produce a financial outturn report at the end of the year.  All of these reports needed to be considered at a meeting of Council.  Should the authority breach any of the prudential indicators, there was a requirement for Council to approve any subsequent changes.

Council was informed that the most significant change for the year ahead was that Councils could not invest for yield and the Section 151 Officer needed to certify for this.  Should the Council be found to be investing for yield, the authority would not be able to use debt financing from the Public Works Loan Board (PWLB) ever again.  This debt was significantly cheaper than commercial debt and was a cornerstone of Council investment strategy across the country.

Bromsgrove District Council had not taken out new long-term debt for some years.  However, new capital works were set out in the authority’s Capital Financing Requirement.  Even in cases where these works were financed from balances or working capital, there was a requirement for a Minimum Revenue Account (MRA) repayment.

The Capital Strategy provided further information about the Council’s plans for borrowing to fund the authority’s capital programme as well as the measures that would be taken to finance this work.  This included the Burcot Lane and Levelling Up regeneration schemes.  Information was included in respect of the Capital Financing Requirement, which was the figure on which Minimum Revenue Provision repayments were based.  In addition, Council debt levels were highlighted in the strategy.  The Council could not breech authorised limits and could only breech operational boundary limits for short periods of time.

The Treasury Management Strategy detailed the overall economic position.  Since the strategy was drafted, there had been changes to the economy due to the impact of the war in Ukraine.  Officers were anticipating that this would significantly impact on projected interest rates in the short and medium-term. 

Further information was provided about how the Council invested surplus funds.  Refinancing indicators had not been changed and were set at 100 per cent to allow for the greatest level of flexibility due to the nature of the economy.

The Minimum Revenue Position (MRP) Policy had not changed.  However, the Council would be engaging with Arlingclose over the summer to review the MRP Policy, debt and investment strategies.

The Council had to notify the Government in advance of the financial year if the authority planned to use capital receipts to fund transformation or redundancy costs.  The Council was not planning to use this facility during the year and the Government had in fact reduced its application to just transformation since the start of the 2022/23 financial year.

The recommendations were proposed by Councillor G. Denaro and seconded by Councillor K. May.

RESOLVED that

(i)              the Capital Strategy as an appropriate overarching strategy for the Council be approved;

(ii)            the Treasury Management Strategy for 2022/23 and the associated MRP policy be approved;

(iii)           the policy for Flexible use of Capital Receipts be approved;

(iv)           the Investment Strategy be approved.

Council Plan (Including the Restoration and Recovery Plan)

The Leader presented the Council Plan, including the Restoration and Recovery Plan, for Members’ consideration.

Council was informed that Bromsgrove District Council was committed to continuing to deliver services that meet the needs of residents.  Since the emergence of the Covid-19 pandemic, the Council had worked closely with partner organisations to help address the impact of the virus on the local community.  The Restoration and Recovery Plan had provided a focus on the actions that were being taken by the Council in response to the pandemic.  The majority of these actions had been completed or remained ongoing.

The Council had an approved Council Plan which had been in place prior to the Covid-19 pandemic.  The addendum to the report detailed some small changes to the plan in light of the impact of the Covid-19 pandemic.  The Council had retained strategic purposes underpinned by priorities, although the green thread had become a standalone priority for the Council.

Following the presentation of the report, Members discussed the content of the Council Plan in detail.  Questions were raised about the reasons why the addendum applied for a period of 12 months.  Council was informed that this was because Members’ terms of office were due to come to an end in May 2023 and after this date the new administration would want to develop a Council Plan that reflected their priorities.  The potential for Members to be consulted on the content of the next Council Plan was also raised.  The Leader clarified that Members would have an opportunity to contribute their thoughts after the local elections had taken place in May 2023.

During consideration of this item, concerns were raised about the costs, in terms of officer time, of developing an addendum to the Council Plan that would only apply for a relatively short period of time.  The suggestion was made that, in order to ensure the sustainability of Council services, there should be longer-term planning taking place.  The Leader explained that, following the pandemic, this was the appropriate time to review the content of the Council Plan and to review the needs of the community in light of the impact of Covid-19.  The addendum would help to support service sustainability whilst enabling the Council to work differently as the country learned to live with Covid.

The recommendations were proposed by Councillor K. May and seconded by Councillor G. Denaro.

RESOLVED that

1)          the Council Plan Addendum 2022/23 be approved and included alongside the current BDC Council Plan 2019/23; and

2)          the Recovery and Restoration Plan 2020/21 be agreed and closed.