Agenda and minutes

To receive as a correct record the minutes of Cabinet held on Tuesday, 6 December 2016 (previously circulated). 

The minutes of the meeting held on 6^th December 2016 were approved as a correct record.

The Chairman advised that there were no items of urgent business.

No declarations were made at this point.

Members were advised that there had been no requests to speak at the meeting in accordance with Cabinet’s agreed procedure.

Referral from Overview and Scrutiny Committee following Call-in on 4 January 2017 regarding Heysham Gateway – (Report to follow)

(Cabinet Member with Special Responsibility Councillor Hanson)

Councillor Caroline Jackson presented a report from the Overview and Scrutiny Committee which advised Cabinet of the outcome of the call-in of the Cabinet decision in relation to the Heysham Gateway (Cabinet Minute 38) and requested Cabinet to consider the recommendations of the Overview and Scrutiny Committee, as follows:

(1)    Our belief that understanding of Cabinet’s decisions in relation to property development and disposal will be enhanced and the need for calling-in decisions will be reduced if additional information is shared with Overview and Scrutiny Members. 

Therefore, when Cabinet is asked to approve the disposal of each parcel of land on Heysham Gateway, such additional information should include presentation of the development appraisals for purchasers. 

(2)    Our interpretation of the reference in resolution 3 to “the principles at section 4.11 of the report” is that this is equivalent to “a decision in principle” and that it is therefore not a mandatory decision to follow the section to the letter in every case. 

This interpretation is based on information – not spelled out in the original report to Cabinet but - provided to Overview and Scrutiny Members during a site visit to the Heysham Gateway on 3^rd January 2017.

(i)         That key larger plots will be sold on long leasehold (rather than as  freeholds) to allow both local authorities to retain sufficient control over the site to maintain over a long period the environmental and other standards expected in a quality industrial park. 

(ii)        That in line with option B3, smaller plots will be disposed of in ways that will accommodate the differing needs of smaller and start-up businesses that may require 25 year leases or licences to occupy developed sites for short periods subject to costs of remediation of the land not inhibiting such development.

(iii)       That Cabinet will receive an accurate acreage of its landholding in the area, both total and developable. 

(3)    That opportunities may arise for sharing of heating or power supplies within an integrated business/industrial park and that nothing in Cabinet’s December 2016 decision would prevent the City Council from developing units within the Heysham Gateway for short term occupational lease should it decide to emphasise obtaining future revenue from the site, rather than using its landholdings to generate capital receipts as is the current focus of the County Council. 

Councillor Hanson proposed, seconded by Councillor Leyshon:-

“That the report be noted.”

Councillors then voted:-

Resolved unanimously:

(1)          That the report be noted.

(Cabinet Member with Special Responsibility Councillor Leyshon)

Report of Chief Officer (Resources)

(Cabinet Member with Special Responsibility Councillor Leyshon)

Cabinet received a report from the Chief Officer (Resources) which sought a decision on a proposed variation to the draft heads of terms for the disposal of St. Leonard’s House, as previously submitted to Cabinet in the report dated 29 March 2016.

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

With regards to the proposed deed of variation, the officer preferred option is to approve Option 2 i.e. approve the deed of variation. Officers consider that doing so will protect the financial viability of the redevelopment proposal and that the existence of a signed legally binding copy of the building contract for the development provides enough certainty to be comfortable that the building work will proceed, especially when combined with the significant time and financial investment Robertson has already put into the scheme.  

The report provided a solution to a technical Stamp Duty Land Tax implication of the buy-back clause introduced during the drafting of the heads of terms that has only become apparent through process as the project has developed. The acceptance of the deed of variation would give the redevelopment of St. Leonard’s House and all the advantages associated with it the best chance of success by simply adjusting the point at which the Council waives its right to buy-back the freehold interest in the building.

Councillor Leyshon proposed, seconded by Councillor Hanson:-

“That the recommendation, as set out in the report, be approved.”

Councillors then voted:-

Resolved unanimously:

(1)       That Officers be authorised to incorporate the proposed deed of variation, as set out  ...  view the full minutes text for item 49.

(Cabinet Member with Special Responsibility Councillor Whitehead)

Report of Chief Officer (Resources)   -  (Report to follow)

(Cabinet Member with Special Responsibility Councillor Whitehead)

Cabinet received a report from the Chief Officer (Resources) which provided information on the latest budget position for current and future years, to inform Cabinet’s budget and policy framework proposals and to allow it to make final recommendations to Council regarding council tax levels for 2017/18.

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

Options are dependent very much on Members’ views on spending priorities balanced against council tax levels.  As such, a full options analysis could only be undertaken once any alternative proposals are known and it should be noted that Officers may require more time to do this.  Outline options are highlighted below, however.

–               Regarding council tax, two basic options are set out at section 6 of the report.  Other alternative options can be modelled at Cabinet’s request.

-               With regard to including savings and growth options to produce a budget in line with preferred council tax levels, any proposals put forward by Cabinet should be considered affordable, alongside the development of priorities.  Emphasis should be very much on the medium to longer-term position.

Under the Constitution, Cabinet is required to put forward budget proposals for Council’s consideration, in time for them to be referred back as appropriate.  This is why recommendations are required to feed into the Council meeting in early February, prior to the actual Budget Council in March.

The two-phased budget strategy adopted by Cabinet is considered to be an effective way of managing the main risks of budget affordability and financial sustainability, by allowing more time for prioritisation and planning.

Generally Officer preferred options are reflected in the recommendations, with the exception of council tax.

In view of the level of savings still needed in future years, the ongoing impact that council tax freezes have, the Council’s current financial strategy and the fact that the Council is not yet clear about how and when it will achieve a financially sustainable budget, the Officer preferred option for council tax is to retain the existing £5 year on year increase, subject to confirmation of local referendum thresholds.  Although a budget surplus is currently forecast in next year, one-off spending pressures could easily swallow that up.

The Officer preferred option would change only if the Council fundamentally reduces its ambitions regarding service delivery, evidenced through the adoption of a clear statement and strategy for doing so.

The Council’s financial challenges continue and in order to protect its future viability, it has no real choice other than to focus on balancing its budget for the medium term.  The two-phased budget strategy adopted is in support of this aim, as is the Council’s wider financial strategy.  The approach also allows the Council to respond to new information and developments and this is crucial, given the forthcoming fundamental finance reforms underway and the huge inherent uncertainties that currently exist.

Councillor Whitehead proposed, seconded by Councillor Pattison:-

“That the recommendations, as  ...  view the full minutes text for item 50.

(Cabinet Members with Special Responsibility Councillors Leytham & Whitehead)

Joint Report of Chief Officer (Resources) & Chief Officer (Health & Housing) – (Report to follow)

(Cabinet Member with Special Responsibility Councillor Leytham)

Cabinet received a joint report from the ChiefOfficer(Health andHousing) andChief Officer(Resources) which provided an updateon thecouncilhousingbudgetarypositionandsoughtCabinet’sdecisionson council housing rent levelsfor 2017/18andtargetsforfuture years. ItalsosoughtapprovalofCabinet’ssupportingrevenuebudgetandcapitalprogrammeproposalsforreferralon toBudgetCouncil,inorder tocomplete theHRAbudget settingprocess for2017/18.

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

There is currently no other alternative available in respect of 2017/18 housing rent setting, given legislative requirements.

In terms of garage rents, options are presented in order to be comparable with other providers whilst remaining competitive, as set out in section 2 of the report.  Cabinet may either choose to support the Officer preferred option for a phased increase to help smooth the impact, or retain existing rents, or introduce increases sooner, although the latter may generate more customer resistance.

With regard to the revenue budget generally, Cabinet could consider other proposals that may influence spending in current and future years, as long their financing is considered and addressed.

The options available in respect of the minimum level of HRA balances are to set the level at £500,000 in line with the advice of the Section 151 Officer, retain at £350,000 or adopt a different level. Should Members choose not to accept the advice on the level of balances, then this should be recorded formally in the minutes of the meeting and it could have implications for the Council’s financial standing, as assessed by its external auditor.

With regards to the growth proposals as set out in section 6 of the report, Cabinet should consider the costs and benefits of the proposals and whether they are affordable, in particular over the medium to longer term.

The options available in respect of the Capital Programme are:

i)       To approve the programme in full, with the financing as set out;

ii)      To incorporate other increases or reductions to the programme, with appropriate sources of funding being identified.

Any risks attached to the above would depend very much on what measures Members proposed, and their impact on the council housing service and its tenants. As such, a full options analysis could only be undertaken once any alternative proposals are known, and Officers may require more time in order to do this.

The Officer preferred options are to:

-        Sethousingrentlevelsin linewithGovernment legislation.

-        Approve the changesto garagerents as proposed in the report.

-        Approve/ referon theprovisions,reserves and balances position assetout.

-        Use balances to help fund the ASB growth item, subject to the associated General Fund proposal being approved.

-        Approve / referon otherrevenue and capital budgetproposalsas setout.

Councillor Whitehead proposed, seconded by Councillor Clifford:-  ...  view the full minutes text for item 51.