To answer any questions under Procedure Rule 11.2
Minutes:
Q1. Question from Councillor Westwood to the Leader of the Council
‘What practical plans does the Leader have to honour the commitment that he made in the Lichfield Mercury some weeks ago about seeing the need for extra investment in Burntwood and the District's rural areas?’
Response from Leader of the Council
‘Parity across the District was discussed in my very first meetings with senior officers and Cabinet - and it is a principle which we are all aligned on.
So far, we have accelerated meetings with developers to bring forward undeveloped sites, increased support for a BID feasibility study should the local Burntwood Business Community have the appetite for one and given a strong steer to ensure that the Local Plan review proactively addresses key challenges faced by Burntwood.
Whilst appreciating that these are small steps, I hope that our immediacy in addressing these challenges gives Councillor Westwood some hope that our efforts will continue to ensure parity across our great District.’
Q2 Question from Councillor
Ball to the Cabinet Member for Finance and
Procurement
‘What percentage of District Council
procurement goes to genuinely local businesses and what plans has
he to maximise this to help support local businesses and our
community, along the lines of Labour controlled Oldham and Preston
Councils?’
Response from the Cabinet Member for Finance and Procurement
‘Previously, we have not analysed procurement spend by location, although the information is being compiled and can be made available following completion of the Statement of Accounts. Once I have it I shall ensure that it is shared with all Members of the Council.
On the subject of future procurement, the Council has recently entered into an arrangement with Wolverhampton City Council to provide support and advice to the Council in relation to its procurement activity. In this arrangement the Council will retain responsibility for setting procurement policy including the criteria we use for assessing procurement bids. To date these criteria have centred around quality, capability and value for money. Nevertheless, I would be prepared to consider local economic benefit to be one of these criteria, where it is appropriate to do so. I would expect this to be on a project-by-project basis.
The Public Services (Local Value) Act of 2012 places a duty on Local Authorities to consider “how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area, and how, in conducting the process of procurement, it might act with a view to securing that improvement”. Councillor Ball is right that this has been extended by Preston Council, along with a number of other Councils across the political spectrum, into the concept of community wealth building.
As we develop and improve our approach to procurement with Wolverhampton City Council we will consider best procurement practice, and therefore I will be seeking routes to incorporate community wealth building into this process, subject to compliance with European Union procurement rules.’
Q3 Question from Councillor
Ball for the Deputy Leader and Cabinet Member for
Investment, Economic Growth & Tourism
‘Given the opportunity,
would the Cabinet member recommend borrowing £50m for the
Council to fund BRS development?’
Response from the Deputy Leader and Cabinet Member for Investment, Economic Growth & Tourism
‘The Council’s Property Investment Strategy was approved by Cabinet in December 2017, which then led to Council approving the ‘Delivering the Property Investment Strategy Report’ in October 2018.
This strategy, as represented in the Council’s Medium Term Financial Strategy makes provision for the Council to borrow £45m over the coming 4 years for investment in strategic assets (property) to deliver additional income, address local needs, and support broader place shaping agendas.
The principles on which any decision will be taken to invest, based on borrowing, are defined in the Property Investment Strategy as;
· Local – property will be within the District of Lichfield, or within the economic geography (i.e. Local Enterprise Partnership, or LEP, Boundaries). It should be close enough to allow it to be effectively managed and maintained, as well as being appealing to tenants or purchasers now and in the future.
· Diversified – property investment will be diversified to broaden the portfolio and so reduce the risk, with a focus given to particular groups, such as housing and offices, when justification is clear and evidenced
· Strategic – property investment should be for the long-term and be regularly rebalanced to support our strategic priorities as well as being acceptable to our community
· Prudent – property investment will be appropriately risk assessed. Where acquisition is being considered, the current tenancy should offer some security in relation to the length of tenure, strength of the covenant and ongoing viability of the tenant. Where development is being considered, likely tenancies and pre-lets would need to be leveraged to support any financial assessment.
· Profitable – property investment will provide a return on investment, either through lettings or sales. The yield on the property should exceed the ongoing costs for management, maintenance and borrowing, while considering the full costs of acquisition or development (e.g. Stamp Duty, legal fees, external valuations and structural surveys).
Any decision to invest using borrowed funds will therefore be made based upon these principles.’
Councillor Ball asked the following Supplementary Question:
‘Would investing in Friary Grange Leisure Centre meet the strategic principles set out in the answer?’
The Deputy Leader and Cabinet Member for Investment, Economic Growth & Tourism responded:
‘I would refer Councillor Ball to the criteria set. If it meets the criteria we will look at it’.
Q4 Question from Councillor Robertson for the Cabinet Member for Communities and Housing
‘What progress has the Cabinet Member made in convincing his cabinet colleagues that the new housing company should build new genuinely affordable homes for those in need, rather than housing for sale, as he indicated to Members at a previous meeting of the Community, Housing and Health (O&S) Committee?’
Response from the Cabinet Member for Communities and Housing
‘One of the long term ambitions of the Property Investment Strategy is to be in a position to provide additional affordable housing. That was the decision of the previous Cabinet and that is still the thinking of this Cabinet.’
Councillor Robertson asked the following supplementary question
‘A lot of money is spent on housing support; has modelling taken place and is that modelling on affordable housing for rent, its impact on housing support and how it would affect profitability?’
The Cabinet Member for Communities and Housing responded
‘I will refer the question to the Deputy Leader and Cabinet Member for Investment, Economic Growth & Tourism but note that 235 affordable homes were built last year’
The Deputy Leader and Cabinet Member for Investment, Economic Growth & Tourism noted that a training session had been arranged in connection with the Investment Company and suggested the matter be discussed further then.
Q5 Question from Councillor Grange to the Cabinet Member for Finance and Procurement
‘In response to Question 2 at the meeting of 16 April 2019 in which Councillor Woodward asked about the term ‘opportunity costs’ the answer that was given was that this is not a term that was recognised or used. Whilst recognising that there has been a change in the cabinet member I think it is important to revisit this point because opportunity costs (e.g. revenue lost when one course of action is chosen over another) are frequently key to investment and financial decisions.
Can assurance be provided that opportunity costs are considered and factored into (e.g.) investment decisions where relevant?’
Response from the Cabinet Member for Finance and Procurement
‘I can reassure Councillor Grange that although it may not be a term that is used, the concept is familiar to this Authority and we are acutely aware that we have a finite amount of money to use either for investment or to fund capital projects. It is simply common sense to recognise that to spend on one item reduces the power to spend on others, unless that spend is covered by an immediate return. The countermeasure to this is to form a comprehensive Medium Term Financial Strategy, accompanied by a capital programme and Treasury Management Plan, delivering on the Council’s priorities while making best use of the public money that we are entrusted with.’