Agenda item

The Project Manager – Place and Prosperity (Exmouth) presented this report which provided Members with an update on progress with developing a new Place and Prosperity Framework. 

The Framework sets out the mechanism where Place and Prosperity investment proposals will be screened against the borrowing requirements of the Public Works Loans Board (PWLB) in a standardised way, and sets out a revised governance process for agile and robust decision making.

In presentation, the following points were highlighted:

·        The aim is to provide a fund through the PWLB which will allow the Council to borrow money for three key purposes; i) service delivery; ii) economic regeneration; and iii) preventative action. 

·        The proposed Place and Prosperity Framework addresses the opportunity to have a single fund of circa £20M investing as a first tranche borrowed from the PWLB.

·        It is envisaged that the fund will be used only where, in the assessment process, it is considered that all other sources of government funding are exhausted.

·        In the event of a feasible investment opportunity, a Place and Prosperity Investment Assessment Group of Officers (with the support of consultants, if necessary) will prepare a recommendation to be considered by a Place and Prosperity Investment Assessment Board (the Board).

·        It is proposed that the Board is a sub-committee of Cabinet comprising the Leader, the Portfolio Holder for Finance and the Portfolio Holder for Economy.  The Board will be supported by senior officers.

·        Where it is deemed necessary, consultation will take place at the full appraisal stage with members who represent the ward where the proposed investment is to be located, and with relevant Portfolio Holders.

·        The Board will have authority to make decisions up to and including £5,000,000.  In making a decision, the Board should be fully agreed; a decision that is not unanimous cannot proceed,

·        For investment opportunities in excess of £5,000,000, the Board will need to recommend the investment to Cabinet or Council, as appropriate.

Members were asked to consider the proposed draft of the Place and Prosperity Framework and recommend any changes for consideration by Cabinet.

Discussion included the following points:

·        The proposed Place and Prosperity Framework is assessed as low impact for climate change and equalities but the wider impact of any specific projects will be assessed in detail if or when those projects are developed.  In assessing impacts, specialist advice will be sought where appropriate.

·        The PWLB is considered a fund of last resort and attempts will always be made to first identify if grant funding is available.  It was noted however that the Council might need to move swiftly in transactions, and grant funding can take some considerable time to access.

·        Borrowing from the PWLB can be for up to 50 years at either index-linked or fixed rates or interest.  Sensitivity analysis takes place as part of the appraisal process to assess the financial impact of repayment terms and changes in interest rates.  To comply with the Prudential Code, the Council is required to put in a ‘Minimum Revenue Position’; an investment vehicle such as an annuity, to safeguard for the eventuality that the Council cannot make a repayment or there is a sudden interest rate rise.

·        A mechanism is in place which enables officers to carry out a quick initial assessment on whether a project is feasible, before significant time or resource is invested in taking it forward. 

·        There is a requirement to comply with the Prudential Code but it is for Members to decide the financial limit that the Board can approve up to.  It was noted that at £5M, the proposed cap is significantly less than many other local authorities who are more versed in working in this way and delivering these types of projects.  Local authorities often have to move quickly; decision making therefore needs to be agile yet robust, and officers expressed confidence that this is achieved through the proposal.

·        It is for Members to decide the size and composition of the Board.  Members were keen to ensure appropriate Member involvement in the decision-making process balanced against the need for strict confidentiality on the Board, so as not to compromise the Council’s position in sensitive negotiations.  It was noted that in one similar situation, two Members were appointed at the Leader’s discretion to be non-executive observers at the Board meeting.  It is understood that this worked well and whilst the non-executive members did not always agree with the Board’s decision, they were always content with the robustness of the process. 

RECOMMENDED to Cabinet:

·        The Committee recommends the amendment of the Place and Prosperity Framework to reflect the addition of an additional non-executive member and recommends that the Framework proceeds to Council.

Members were of the view that the additional non-executive member to the Board should be able to enter into debate as part of the decision making process, but should not have voting rights.