To consider the report of the Portfolio Holder for Finance.
Minutes:
Documents:
· Report of the Portfolio Holder for Finance
Discussion:
· Audit Committee would receive the Capital Report on a regular basis for monitoring purposes
· 67% of capital has been committed but spend remained low
· 2 virements had been agreed – new school expenditure and refurbishment of Ladywell House
· The Committee asked whether there was information regarding the continuation of using capital receipts to fund transformation projects – the Head of Finance confirmed that this had been approved for the next 3 years
· Recent press coverage reported that the Brecon Cultural Hub was overspent and Members asked how this was to be funded – this information had been provided to a recent meeting of County Council and would be forwarded for information
· There was concern that the Cabinet had recently agreed to suspend declaring any further property from the County Farm Estate as surplus which would mean that the target for capital receipts will not be met
County Councillor T J Van Rees declared a personal and prejudicial interest and left the meeting for discussion of this item
· It was considered that this decision would have a significant impact on the transformation agenda. It was noted that a recent Member Seminar had indicated that the Authority would need £450M of borrowing in the next few years and that all avenues of funding should be considered including the use of the Authority’s asset base. All assets and policies need to be realigned. The Portfolio Holder confirmed that everything would be open to discussion in the next few months. There would be an intensive series of meetings regarding transforming the Council to avert the financial crisis that was looming in 2019/20 if matters were not addressed. The Committee considered that the Cabinet decision may have been premature – the Portfolio Holder reported that the Cabinet would wish to see the County Farms Estate maintained but improved to address regeneration. However, he reiterated that everything would be open to discussion during the transformation debate. The Authority was currently under-borrowed and future borrowing was included within the existing Finance Resource Model (FRM).
· A question regarding the reporting of the capitalisation of projects from revenue expenditure was raised – this would be reported as projects were fulfilled in the monthly monitoring report
· The Head of Finance was asked whether projects were ‘future proofed’ if delays were experienced. A contingency is included in all capital projects. The risk of increasing costs in delayed projects was acknowledged.
· The Committee again noted that the Authority rarely achieved its target for capital spend – there was a need to be more realistic
· A further comment was made that Impact Assessments were not necessarily embedded in the right place. The need to clearly assess impacts was essential. The Portfolio Holder agreed that this should be completed at an early stage and become integral to projects.
· Borrowing from other local authorities or our Pension Fund was noted – this tended to be for shorter term borrowing but longer term borrowing would be via the Public Works Loan Board (PWLB). This is detailed in the Treasury Management policy. The Authority have used cash reserves while investment interest has been low to fund capital projects.
· It was noted that only 0.2% interest had been paid for a loan from the Pension Fund. A Member of the Pension and Investment Committee expressed concern that the Pension Fund was in deficit and those funds would be better retained within the Fund – he agreed to take the matter up with the Pension Fund.
Outcomes:
· Details of the additional costs and funding streams for the Brecon Cultural Hub would be circulated for information.
Supporting documents: