Decision details

Cabinet considered a report seeking approval for a supplementary Capital Programme provision of £200m for asset acquisitions.

The proposal to increase the borrowing limits was on the basis that the additional borrowing would be prudentially affordable: any borrowing would be fixed long term and used to fund high quality assets generating net revenue surpluses which would more than cover the financing costs.

The proposal would give Cabinet the ability to consider additional investment opportunities above the current limits but in each case Cabinet would receive a detailed evaluation of the business case and risks in order to decide whether to agree to individual investment proposals.

Alternative options considered and rejected by the Cabinet:

·         Not to agree the supplementary Capital Programme provision.

Resolved that Cabinet agrees to recommend that Council:-

1.    Approves the supplementary capital estimate for property acquisitions within the Borough of £200m for 2017/18  to support the economic development and well-being of the Borough and investment purposes;

2.    Agrees the revised set of prudential indicators which include increasing the operational boundary and authorised limit for external debt by £200m; and

3.    Re-confirms the Council’s Minimum Revenue Provision policy to ensure prudent provision is made to cover repayment of loans.

Reason for Decision

In order to ensure the ongoing financial sustainability of the Council and its ability to provide services to residents in the face of funding reductions and pressures, the Council needs to be able to continue to generate additional ongoing income through making further income generating asset acquisitions.