Agenda item

To receive a report by the Head of Resources regarding amendments to the Council’s Constitution to reflect the requirements of the Disposal and Acquisitions Policy, as approved by the Cabinet on 18thJune 2015.

Further to the meeting of the Cabinet in June, the Panel received and noted a report (a copy of which is appended in the Minute Book) by the Head of Resources to recommend to the Council that the Constitution be amended to reflect the new Disposal and Acquisitions Policy.

As the former thresholds and procedures within the Constitution were considered too restrictive, and to enable a more commercial approach to the management of the Council’s property portfolio, a new Disposal and Acquisitions Policy and governance arrangements had been agreed by the Cabinet to enable the Authority to manage its estate of land and buildings within a commercial environment.

Having initially been considered by the Overview and Scrutiny Panel (Economic Well-Being), the Cabinet agreed to the incorporation of the following amendments to the Policy as recommended by the Overview and Scrutiny Panel:

•   where disposal and acquisition decisions are made, that these be retrospectively reported to the Overview and Scrutiny Panel (Economic Well-Being); and

•  the new financial thresholds are reviewed 12 months following approval.

It was explained to the Panel that as the Council was required to generate £8million of savings by 2019/2020 a way of generating additional income was via selling assets or purchasing capital assets within the commercial environment.

In addition to amendments to the thresholds for the disposal and acquisition of land and property, the Cabinet approved the formation of a Treasury and Capital Management Group which had to be reflected in the Constitution.

In response to questions regarding transparency of the Council’s estate, the Panel was informed that whilst the purchase or sale of property or land was under negotiation the information was commercially sensitive and was therefore confidential.  However, once contracts were complete information could be released.

The Panel enquired whether the Council had a sufficient level of expertise to realise the value of its assets and for negotiation purposes.  It was explained to the Panel that a Commercial Investment Strategy was being developed to identify such matters as well as establish proposed investment levels, risk appetite and other factors that were essential in such a strategy.

The Panel had responsibility for considering changes to the Constitution, which included the Code of Financial Management and Code of Procurement.  During the Panels discussions it was emphasised that the Policy itself was the responsibility of the Cabinet and that the report had been presented to the Panel as it was responsible for considering proposals to review the Council’s Constitutional arrangements and to make appropriate recommendations to the Council.  Purchasing and selling land and property was not a new concept to the Council and external agents were used to obtain a view on the current market values.

In response to a question it was confirmed that the Authority could purchase residential property.  However, commercial assets currently had a better value.

As a further safeguard for good governance an additional recommendation was proposed by a Member of the Panel, that the Treasury and Capital Management Group be constituted to include a third member of the Cabinet in the event of the Leader or Deputy Leader holding the Resources Portfolio, to ensure that three Cabinet Members always have a seat on the Treasury and Capital Management Group, which was accepted by the Panel.

Having considered the Officer’s report and the amendment, the Panel

RECOMMEND

a.  that the Constitution be amended to reflect the Disposal and Acquisitions Policy attached in Annex A of the Officer’s report; and

b.  that the Treasury and Capital Management Group be constituted to include the Leader, Deputy Leader and the Executive Councillor for Resources (or in the event of the Leader or Deputy Leader holding the Resources Portfolio a third member of the Cabinet) together with relevant members of the Corporate Management Team and the Responsible Financial Officer.