Agenda item

Report of Accountancy Services Manager

The Panel received a report to provide information on the different types of investment that the Council may consider, and how the accounting and other financial implications vary.

At its meeting on 23^rd February 2010, the Panel had resolved that the relevant officers be asked to consider invest to save schemes that would provide a greater rate of return than Council investments and report back to the Panel.  The report advised that there were fundamental differences between investments in treasury terms and invest to save schemes, which meant that it was not currently possible to consider invest to save arrangements as an alternative to other investments.  A comparison of potential rates of return was not, therefore, a relevant consideration in formulating treasury strategies.  The key differences were outlined in the report.

It was reported that councils across Britain are now able to sell renewable electricity to the grid, with Bristol City Council building two wind turbines in a flagship development.  Any such installation, however, would need to be financed.  The City Council’s present capital position was already faced with significant pressure and there were major risks attached to various regeneration schemes and land sales to generate income.  Councils had a duty to ensure that investment plans were affordable, prudent and financially sustainable and, given the pressures to make savings, it was difficult to create headroom to take forward invest to save initiatives and to prioritize such initiatives.

Councillor Whitelegg advised that councils, such as Kirklees Council, had installed solar photovoltaic panels, solar energy collectors and two 6Kw wind turbines to address climate change, supply council buildings with power from renewable energy reserves and make a significant reduction in electricity from the grid and climate change emissions under the Feed in Tariff scheme.   Kirklees Council’s project had brought a significant amount of money via external funds into the Kirklees budget and the council was working at national level towards a simplified approach to enable councils to obtain money for the renewable electricity generated.

It was reported that the Feed in Tariff scheme rewarded customers who invested in electricity generating renewable technologies and the government had set up a guaranteed 25-year payment plan for customers who installed a solar PV electric system in 2010, the agreed rate being 41.3 pence for every kiloWatt of electricity produced by the system.  Any electricity produced in excess would be exported back to the national grid, with a further 3p per kiloWatt being received for this.

Members were advised that the City Council needed to create capacity to determine a programme for capital investment that was affordable, prudent and sustainable, in accordance with the CIPFA Prudential Code.  Any proposal would need to be included in the budget planning process and considered alongside other potential budget priorities.  The Council’s Capital Investment Strategy, which was incorporated in the Medium Term Financial Strategy (MTFS) sets out the Council’s priorities for capital investment and was the starting point for considering any new proposals.  This would be reviewed by Cabinet in November.  It was noted that the government’s Comprehensive Spending Review on 20^th October would have a bearing on the Council’s plans, and this would also be covered in the November Cabinet report.

It was further reported that Climate Change was one of the Council’s priorities and was contributing to the wider climate change agenda through its links with the Lancaster District Local Strategic Partnership (LDLSP).  Community Engagement was liaising with the Energy Saving Trust regarding matters such as the Feed in Tariff and the matter was ongoing.  The Climate Change Strategy sets out actions that the City Council would take, or consider taking, to tackle Climate Change in the district, including reducing energy use, reducing carbon emissions from Council buildings, and working with partners, including the Energy Saving Trust and the LDLSP to develop and assist in the implementation of local climate change action plans. 

Resolved:

(1)        That the report be noted.

(2)        That, in accordance with the Council’s corporate priority to tackle the challenges of Climate Change, and in recognition of the existing provisions within the Capital Investment Strategy, the Head of Community Engagement reports back to a future meeting of the Panel on the outcome of meetings with the Energy Savings Trust regarding the Feed in Tariff scheme, including proposals to maximise revenue and reductions in CO₂ emissions by the generation of renewable electricity through the scheme.