Agenda and minutes

1.         This meeting is to be webcast. Members are reminded of the need to activate their microphones before speaking.

2.         The Chief Executive will read the following announcement:

“This meeting will be webcast live to the Internet and will be archived for later viewing. Copies of recordings may be made available on request.

By entering the chamber’s lower seating area you consenting to becoming part of the webcast.

If you wish to avoid being filmed you should move to the public gallery or speak to the webcasting officer”

The Chairman reminded everyone present that the meeting would be broadcast live to the Internet, and that the Council had adopted a protocol for the webcasting of its meeting.

In addition to the apologies noted above, apologies were also received in respect of Councillor Mrs S Watson, Deputy Portfolio Holder (Housing).

(Assistant to the Chief Executive)  To report the appointment of any substitute members for the meeting.

It was noted that Councillor D Wixley was a substitute member for Councillor Mrs R Brookes, and in respect to the Finance and Performance Management Scrutiny Standing Panel, Councillor C Finn was substituting for Councillor R Cohen.

(Assistant to the Chief Executive). To declare interests in any items on the agenda.

In considering whether to declare a personal or a prejudicial interest under the Code of Conduct, Overview & Scrutiny members are asked pay particular attention to paragraph 11 of the Code in addition to the more familiar requirements.

This requires the declaration of a personal and prejudicial interest in any matter before an OS Committee which relates to a decision of or action by another Committee or Sub Committee of the Council, a Joint Committee or Joint Sub Committee in which the Council is involved and of which the Councillor is also a member.

Paragraph 11 does not refer to Cabinet decisions or attendance at an OS meeting purely for the purpose of answering questions or providing information on such a matter.

There were no declarations made pursuant to the Member’s Code of Conduct.

(Chairman/Lead Officer) The Overview and Scrutiny Committee has agreed the Terms of Reference of this Panel. This is attached. The Panel are asked at each meeting to review the document. The Panel’s Work Programme will be reviewed at its meeting in January 2012.

The Panel’s Terms of Reference were noted.

(Director of Housing) To consider the attached report.

The Panel received a report from Mr A Hall, the Director of Housing, regarding the HRA Financial Plan – Consultation on Strategic Approach.

In March 2012, the Government would be introducing a major change in the way that local authority Housing Revenue Accounts (HRAs) were funded, called Self-Financing. It was therefore necessary to agree the approach to be adopted for the Council’s 30-Year HRA Financial Plan, which would be used to inform the treasury management options for borrowing the required finance. The Council would need to make a one-off payment to the Government of probably around £190 million, for which a substantial proportion would be borrowed.

There were two key aspects to this process from the Council’s point of view. Firstly, it needed a well planned robust 30-Year Financial Plan for the HRA setting out all expected housing income and expenditure to meet the Council’s housing objectives. Secondly, it needed to consider the treasury management options for borrowing the finance, in order to meet the cost of the payment to the CLG, and to ensure that the Council received the best terms.

The Council’s Treasury Management advisers, Arlingclose, had provided advice to the Council on the effects of the HRA debt settlement on the Council’s General Fund. This was noted as follows:

(a)        The Council’s balance sheet position was such that the Housing Revenue Account (HRA) was effectively lending the General Fund to fund an element of its unfinanced capital expenditure, this loan was in the region of £10 million;

(b)        The adoption of debt resulting from the HRA Subsidy settlement would change the face of the Council’s balance sheet but the GF position, in terms of requiring £10 million to fund this internal borrowing position would not change;

(c)        The Council had worked with its treasury advisors modelling the impact of the HRA transaction on the Council’s balance sheet position particularly in terms of the cost of this internal loan to the GF. The HRA could borrow £122 million from external sources and fund the balance of the transaction, around £58 million, from internal resources; and

(d)        The GF would continue to fund the internal borrowing position at the current rate of interest and there would be no detriment to the GF, providing cash flow balances existed within the Council. Assuming the HRA took on an additional £10 million of external debt, this would maintain a cash position within the HRA which could be lent to the GF, this would have no negative impact on the GF. The GF might need to externalise its borrowing position at some point in the future.

The treasury advisors had stated that around £58 million from internal resources could be used to fund the debt settlement. This was one option open to the Council and may decide to change the amount of internal resources used. Within the model produced by CIHConsult, the Council’s HRA Business Planning consultants, they had assumed £39 million of internal resources would be used which  ...  view the full minutes text for item 32.

The next programmed meeting of the Panel is scheduled for Tuesday 31 January 2012 at 5.30p.m. in Committee Room 1.

The next programmed meeting of the Panel was scheduled for Tuesday 31 January 2012 at 5.30p.m. in Committee Room 1.