Agenda item

To receive a report from the Cabinet on recommendations referred to the Council for determination

1)    Mid-Year Report on the Treasury Management Activities and Prudential Indicators 2019/20.

 

The Portfolio Holder for Corporate Finance and Resources introduced and moved the recommendations in the report.  The Portfolio Holder highlighted the continuing difficult economic environment; the introduction of the statutory override to mitigate the effect of any fluctuations in investments on the General Fund; the higher than expected return on investments due to higher reserves than predicted; and that the Capital Funding requirement remained static and total debt position remained unchanged.

 

The recommendations were seconded by Councillor Orson.

 

During debate the following points were noted:

·         The conclusion of the General Election had had a positive impact on the Stock Market, this would take some time to filter through to the return on investments and would have some impact on the return currently being achieved, but it was unlikely to be significant.

 

RESOLVED

 

To APPROVE the recommendations from Cabinet:

 

a)    That the mid-year position on treasury activity for 2019-20 be noted.

b)    That the mid-year position on the prudential indicators for 2019-20 be approved.

c)    To approve that a new Treasury Management Provision Reserve be established from 2019/20, with delegated authority given to the Director for Corporate Services to determine the affordable amount to contribute into this each year during the statutory override period.

 

2)    Infrastructure Funding with Leicestershire County Council

 

The Leader introduced and moved the recommendations in the report.  The Leader highlighted that for generations people had been talking about the congestion in Melton.  In 2016 the Council started working with the County on submitting a business case to Government.  Two years later £50 million was secured to support construction of the Northern and Eastern sections.  In February this year a further £15million had been secured to support the Southern section.  The Leader paid tribute to the former MP, Sir Alan Duncan who played a pivotal role in securing both bids.  The total cost of the road would be approximately £100million, the significant local contribution of £35million would be funded through income generated by growth and developer contributions.  Over the last year the Council had been working with Leicestershire County Council to agree an infrastructure funding agreement to support and share the risks associated with meeting these costs.  The report set out the components of the agreement that had been reached.  It meant that Melton Borough Council would make a contribution of £6million up to 2035 from the benefits of growth from income received from new homes.  He confirmed that there was protection for the Medium Term Financial Strategy as only income over and above that required to support core services would be used and there would be the opportunity to review the agreement should funding streams change.  The agreement balanced the desire to support infrastructure investment in Melton with prudence and protection for the future of the Council.  All members had had the opportunity to understand the details of discussions and the basis of the agreement through informal meetings. 

 

Councillor Higgins seconded the recommendation in the report and reserved his right to speak until later in the debate.

 

Councillor Evans proposed an amendment to the motion as detailed at d) below:

 

That Council approves the recommendations from Cabinet:

a) To approve that Melton Borough Council enters into an infrastructure funding agreement with Leicestershire County Council.

b) To  delegate  authority  to  the  Chief  Executive  in  consultation  with  the Leader,  the  Director  for  Governance  &  Regulatory  Services  and  the Director  for  Corporate  Services  to  negotiate  the  terms  of  the  legal agreement with the County Council.

c) To delegate authority to the Director for Governance and Regulatory Services to complete the associated legal documentation.

d) To agree that a report providing a summary of the key terms and principles of the final agreement  is presented to Council for approval prior to completion of the agreement.

 

The amendment was seconded by Councillor Holmes.

 

Councillor Evans noted that  negotiations had been difficult at times up to this point and that could result in further changes being required which all members should have the opportunity to consider.  All Councillors would be held to account for the decision and so all Councillors should be involved in the decision on the final agreement.

 

During debate on the AMENDMENT the following points were noted:

·      Councillor Orson confirmed that any material deviations from the substantive, explicit clauses set out in the report would result in the report being brought back to Council for consideration, therefore the amendment duplicated the intention in the report and could cause unnecessary delay;

·      The Mayor suggested that the original motion could be amended to include a provision that any material changes would result in the agreement being brought back to Council.  This was rejected by Councillor Evans;

·      Councillor Pritchett did not feel that the report contained sufficient detail on the risks and due diligence completed so far;

·      Councillor Higgins confirmed that the Sports Centre had been removed from the agreement through mutual agreement and that there had also been compromise in relation to Secondary School funding.  The Leader had been careful to secure support from his Group as well as other members and he could see no reason for further delay;

·      Councillor Chandler requested further information on the position if the New Homes Bonus was withdrawn.  It was confirmed this would be dealt with by the review trigger as detailed in section 9.4 of the report;

--o0o--

Clarification was requested as to whether the agreement related to the northern section of the road and whether this affected a members potential interest.  The Monitoring Officer advised that ultimately any requirement to declare an interest was a matter for individual members. It was confirmed that the decision before Council extended the original agreement reached with the County Council in December 2017 to now include the southern section in addition to the northern section.

--o0o--

The Leader requested a recorded vote in accordance with Chapter 3, Part 1, Procedure Rule 17.5 b).  This was supported by Councillors Higgins and De Burle.

--o0o--

 

On being put to the vote the AMENDMENT FELL (was not carried).

 

For:

Bindloss; Carter; Evans; Hewson; Holmes; Pritchett; Wood.

(7)

 

Against:

Browne; Child; Cumbers; De Burle; Douglas; Faulkner; Fisher; Freer-Jones; Glancy; Higgins; Lumley; Orson; Smedley; Steadman; Wilkinson.

(15)

 

Abstentions:

Chandler; Graham.

(2)

 

During debate on the SUBSTANTIVE MOTION the following points were noted:

·         Councillor Higgins highlighted that although Melton Borough Council would receive 50% of the New Homes Bonus from the development of several sites resulting in approximately 4000 new houses, the development of these sites was dependent on the agreement.  All projects contained an element of risk, but in this case the risk had been calculated and balanced against the benefits in terms of economic growth, employment and improved amenities which would result from the agreement.  Delay could increase the economic risks;

·         Councillor Evans raised a point of interest that his amendment had not been intended to cause delay;

·         The Mayor reminded Councillor Evans that debate should now be restricted to the substantive motion as the amendment had fallen.

--o0o--

The Leader requested a recorded vote in accordance with Chapter 3, Part 1, Procedure Rule 17.5 b).  This was supported by Councillors Higgins and De Burle.

--o0o--

RESOLVED

 

To APPROVE the recommendations from Cabinet:

 

a)    To approve that Melton Borough Council enters into an infrastructure funding agreement with Leicestershire County Council.

b)    To delegate authority to the Chief Executive in consultation with the Leader, the Director for Governance & Regulatory Services and the Director for Corporate Services to negotiate the terms of the legal agreement with the County Council.

c)    To delegate authority to the Director for Governance and Regulatory Services to complete the associated legal documentation.

 

For:

Bindloss; Browne; Child; Cumbers; De Burle; Douglas; Faulkner; Fisher; Freer-Jones; Glancy; Higgins; Lumley; Orson; Smedley; Steadman; Wilkinson.

(16)

 

Against:

Carter; Evans; Hewson; Wood.

 (4)

 

Abstentions:

Chandler; Graham; Holmes; Pritchett.

(4)

 

3)    New Finance System

 

The Portfolio Holder for Corporate Finance and Resources introduced and moved the recommendations in the report.  The Portfolio Holder provided a brief summary of the report confirming that support for the current system was due to end in 2021 and that advances in technology meant that a replacement system would bring advantages both in terms of functionality and ease of use, as well as being less expensive.  There had been a procurement exercise and the details of the criteria and evaluation resulting in the choice of the preferred bidder could be found in the report.

 

RESOLVED

 

To APPROVE the recommendation from Cabinet:

 

To allocate £250k from the Corporate Priorities Reserve in order to fund the new finance system.