Agenda and minutes

The Committee to be notified of any substitute members.

The Committee was notified that Councillor Cunningham would be substituting for Councillor Cook for this meeting only.

The Committee was advised that an apology for absence had been received from Councillor Morgan, who was one of the Members who called in the decision.

Members are asked to disclose any interests in matters for consideration at the meeting.

No interests were disclosed.

It was agreed that the press and public should be excluded during discussion of the following item of business because of the likelihood that information that is exempt under paragraph 3 of Schedule 12A of the Local Government Act 1972 (as amended) because of its commercial sensitivity would be disclosed to them.

The following decision taken by the Cabinet Member for Finance on Monday 6 November 2017 has been the subject of a call-in request by Councillors Ashley Baxter, Phil Dilks, Charmaine Morgan, Bob Sampson, and Ian Selby, in accordance with 6.19 of Article 6 of the Constitution on the following grounds:

REASONS FOR EXERCISING CALL–IN:

In April this year Cllr Adam Stokes led a ‘Call-In’ against a decision by the then Cabinet Member for Finance to spend £2 million of this Council’s resource to purchase an office building outside South Kesteven, in a neighbouring authority’s area.

Those calling in the decision were – and remain – all members of the administration and included four current Cabinet members including Cllr Stokes. They argued strongly that SKDC should invest in South Kesteven rather than outside the District to support our local economy.

They also pointed out that the April decision was taken with inadequate/sufficient consultation and insufficient consideration of all options/relative weighting of options and that the decision was

“a big risk and could be spread far better than the present proposal.”

However, seven months later, Cllr Stokes, has himself made a decision to spend £3 million of this Council’s resource to purchase an office building outside South Kesteven.

His decision has been taken behind closed doors, without any reference to any of the Council’s Overview and Scrutiny Committees, and even any discussion by Cabinet, all of which goes against the stated aims and ethos of  this Council to be ‘open and accountable’ in its decision-making.

Spending £3 million outside South Kesteven appears to be contrary to the principles of ‘InvestSK’. Indeed, the idea that the Council was even considering making such a substantial investment outside South Kesteven was not mentioned in the recent launch of “InvestSK”, nor was it mentioned in the Council Leader’s recent public statements at Stoke Rochford and elsewhere relating to plans to grow the local economy.

Although not listed as a ‘key decision’ - and despite commercial sensitivities - we believe that an unprecedented and potentially controversial decision to spend £3 million of SKDC taxpayer’s money to purchase a building outside of South Kesteven should only be considered following proper pre-scrutiny and the opportunity for public awareness and informed debate.

Non Key Decision:

That approval is granted in accordance with the Investment Strategy.

A copy of report PD060 (contains exempt information under paragraph 3 of Schedule 12A of the Local Government Act 1972) and associated plan together with a copy of the decision notice is enclosed.

Decision:

To not support the call-in

The Chairman explained the process that would be followed during the meeting and outlined the possible conclusions that the Committee could reach:

·         To support the request for the call-in and recommend that the Cabinet Member for Finance re-considers the decision

·         To not support the request for call-in and uphold the decision made by the Cabinet Member for Finance

·         To refer the decision to Council (only if the Committee found that the decision did not comply with the Council’s budget or policy framework)

During discussion, Committee members were reminded that their deliberations needed to relate specifically to the decision that had been called-in and not whether they agreed with the principles in the Commercial Investment Strategy.

Early debate centred on the location of the commercial property that was the subject of the decision, as it was not within South Kesteven. Members referred to a commercial investment decision that had previously been called-in by the current Cabinet Member as it was outside the district, querying what had led to the change in perspective. The Cabinet Member explained that his decision complied with criteria in the Commercial Investment Strategy and followed exhaustive searches of potential investment opportunities within the district, none of which had been found to have the level of return that could be provided by this property. Some members made reference to the payment of business rates, which would be received by another local authority.

Reference was made to the Invest SK programme and its ambition to promote investment within the district. The Committee was advised that while Invest SK was designed to stimulate growth in South Kesteven, the objectives were different and so it would not offer the same commercial return as the proposed purchase.

There was some discussion around the payback period for the purchase with some members expressing concern because the period for recouping the purchase price exceeded the duration of the leases held by the existing tenant. While this was acknowledged a range of scenarios had been modelled, including the tenant activating the break clauses with their leases, which had indicated that the purchase was still viable. There was also assurance expressed that if the rental income did cease, the Council is investing in an asset that should increase in value over time and would also enhance the net worth of the Council.

It was noted that if the tenant wanted to leave, it was required to give 6-months notice and that the two leases did not run concurrently. This meant that there would be a minimum of 6-months to market one part of the facility, with a slightly longer lead-in to market the second part. The arrangement of the premises also meant that they could easily be remodelled into two or four units. Members were advised that the current tenant had made significant investment in the fitting-out of the office accommodation, which indicated a commitment to staying put.

There was some discussion about the financing of any such  ...  view the full minutes text for item 33.

The meeting was closed at 15:57.