Agenda item

(a)  That a Debt Repayment Strategy be implemented with immediate effect;

(b)  That Officers conduct a procurement exercise in line with the Public Contracts Regulations 2015, to obtain the support of external organisations who can assist the Council with a programme of asset disposals to generate capital receipts;

(c)  That it be agreed that income generated from asset disposals would be used in the first instance to finance any Capitalisation Directions received from the Government, and that additional sale proceeds thereafter would be used to repay existing external debt.

The Section 151 Officer introduced a report that sought Cabinet to consider and approve a Debt Repayment Strategy and to ask Officers to conduct a procurement exercise to obtain the support of external organisations to assist the Council with the programme of asset disposals over the next five years.

The Cabinet recognised that an orderly programme of asset disposals was required to improve the Council’s financial position by realising capital receipts which could be used firstly to finance any Capitalisation Directions that may be received from Government and secondly to repay existing external debt.  The report highlighted that if capital receipts of circa £600m could be realised over the next five years it could finance a Capitalisation Direction and reduce borrowing from its current level of £760m to circa £335m by 2027.  The aim was to make borrowing managable and reduce pressure on the revenue budget to support services.

Lead Members discussed the historic financial practices that had contributed to the current position since 2016, including an apparent change in approach to borrowing and treasury management reporting that had not been approved by Members.  Assurance was sought that the improvements to financial leadership and governance would ensure such a situation could not occur in the future.  The Section 151 Officer stated that the new finance team was committed to implementing the Finance Action Plan to be considered elsewhere on the agenda which would address the issues raised.  Members would approve any policy changes annually in the treasury management strategy and a six-monthly report would be provided to Cabinet to monitor progress.

Speaking under Rule 30, Councillor Strutton asked about the potential disposal of Housing Revenue Account assets, the total proportion of assets likely to be disposed of and the feasibility of disposing of the required scale of assets.  The Leader and Section 151 Officer responded to the points raised and highlighted that the report in front of Cabinet set out the overall approach that would be taken and that all assets would be reviewed as part of the agreed strategy.

The Cabinet agreed the debt repayment strategy and the recommendation to bring in external expertise to assist the Council in implementing the required disposals.

Resolved –

(a)  That a Debt Repayment Strategy be implemented with immediate effect;

(b)  That Officers conduct a procurement exercise in line with the Public Contracts Regulations 2015, to obtain the support of external organisations who can assist the Council with a programme of asset disposals to generate capital receipts;

(c)  That it be agreed that income generated from asset disposals would be used in the first instance to finance any Capitalisation Directions received from the Government, and that additional sale proceeds thereafter would be used to repay existing external debt.