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Agenda and minutes

Venue: Committee Rooms A, B and C, Civic Offices, Elstree Way, Borehamwood

Contact: Jenny Smith 

Webcast: View the webcast

Items
No. Item

1.

Communications and Apologies

(a)       Communications (if any) relating to business on the agenda.

 

(b)          Apologies for absence.

 

Additional documents:

Minutes:

The Chairman welcomed Members and Officers to this first Executive meeting in the new municipal year, extending a particular welcome to Councillor Morris who was attending his first meeting as the Portfolio Holder for Community and Economic Development.

 

He advised that the meeting was being webcast as usual and reported the receipt of apologies for absence from the Chief Executive.

 

2.

Declarations of Interest (If any)

Members are required to declare any disclosable pecuniary interests they or their spouse/partner have in any matter which is to be considered at this meeting.  Members must also declare any other pecuniary or non-pecuniary interests they have in any matter to be considered at this meeting. The responsibility for declaring an interest rests solely with the member concerned.

 

Members must clearly state to the meeting the existence and nature of any disclosable pecuniary interest, other pecuniary interest or non‑pecuniary interest and the agenda item(s) to which it/they apply.

 

Disclosable Pecuniary Interests are prescribed by the Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012 as follows;

 

Employment, office, trade, profession or vocation

Any employment, office, trade, profession or vocation carried on for profit or gain.

 

 

 

Sponsorship

Any payment or provision of any other financial benefit (other than from the relevant authority) made or provided within the relevant period in respect of any expenses incurred by a member in carrying out duties as a member, or towards your election expenses. This includes any payment or financial benefit from a trade union within the meaning of the Trade Union and Labour Relations (Consolidation) Act 1992.

 

 

Contracts

Any contract which is made between the relevant person (or a body in which the relevant person has a beneficial interest) and the relevant authority— (a) under which goods or services are to be provided or works are to be executed; and (b) which has not been fully discharged.

 

 

Land

Any beneficial interest in land which is within the area of the relevant authority.

 

 

Licences

Any licence (alone or jointly with others) to occupy land in the area of the relevant authority for a month or longer.

 

Corporate tenancies

Any tenancy where (to the member’s knowledge) - (a) the landlord is the relevant authority; and (b) the tenant is a body in which the relevant person has a beneficial interest.

 

 

Securities

Any beneficial interest in securities of a body where - (a) that body (to the member’s knowledge) has a place of business or land in the area of the relevant authority; and (b) either (i) the total nominal value of the securities exceeds £25,000 or one hundredth of the total issued share capital of that body; or
(ii) if the share capital of that body is of more than one class, the total nominal value of the shares of any one class in which the relevant person has a beneficial interest exceeds one hundredth of the total issued share capital of that class.

 

In cases of disclosable pecuniary interest, Members must withdraw from the meeting room while the matter is being considered.

 

Additional documents:

Minutes:

Councillor Graham declared an ‘Other Pecuniary Interest’ in item 6.2, Hertsmere Developments Limited (HDL) Business Plan and Associated Matters and the related item in part II of the agenda, as a Council-appointed Director of HDL.  He advised that, in accordance with Section 33 of the Localism Act 2011 and the Council’s Constitution, he had been granted a dispensation by the Chief Executive however to remain in the meeting, speak but not vote.

 

Councillor Cohen also declared an interest in item 6.2 as a Council-appointed Director of HDL and that the same dispensation had been granted by the Proper Officer to remain, speak but not take part in the vote.

 

3.

Speeches by Non-Executive Members

Non-executive members attending the meeting are reminded that a non-executive member may speak for a maximum of three minutes on any item on the agenda, with a maximum of five members per item (no more than two from any one Group).

 

Additional documents:

Minutes:

The Chairman advised that the usual arrangements for speeches by non‑Executive Members applied at this meeting.

 

 

4.

Minutes pdf icon PDF 131 KB

To confirm and sign the minutes of the meeting of the Executive held on 16 May 2018.

 

No discussion shall take place upon the minutes, except upon their accuracy.

 

 

Additional documents:

Minutes:

Subject to the following amendment, the minutes of the meeting of the Executive held on 16 May 2018 were approved and signed as a true record:

 

Page 123, Minute 136, resolution (2) to read as follows:

 

2.  “the market rent set out in Report EX/18/38 be agreed and the current           principle of applying a discount be continued at a percentage to be       negotiated, the final decision to be delegated to the Portfolio Holder for       Finance and Property in consultation with the Portfolio Holder for Leisure,       Culture and Health and the Chief Executive.”

 

 

5.

Key Decisions

Additional documents:

5.1

Review of Financial Strategy 2018/19 to 2021/22 pdf icon PDF 90 KB

That Executive is requested to consider the draft Financial Strategy 2018/19 to 2021/22, as set out in Appendix A to the report, and recommend it to the full Council for approval.

 

Additional documents:

Minutes:

Decision that the draft Financial Strategy 2018/19 to 2021/22, as set out in Appendix A to the report, be approved and recommended to the Council for adoption.

 

Reasons for the Decision

 

The Financial Strategy, which was last approved in July 2016, had been fully reviewed and updated to reflect current circumstances.  The revised strategy had been extended to cover the period to 2021/22 and reflected the ongoing reduction in government grant and complete loss of Revenue Support Grant by 2019/20 as well as other pressures impacting the Council over the medium term.

 

As Council approval was required, the draft Strategy was presented for the Executive’s consideration prior to adoption by the full Council.

 

Alternative Options Considered and Rejected

 

To not carry a regular review of the Financial Strategy was not considered to be an option.  Since the Strategy covered the medium term, an annual review was required so that it remained up-to-date.

 

The Strategy examined the current influences and risks to the Council’s finances and suggested how these should be managed.  As such, the Strategy set out a number of alternative scenarios and sensitivities.

 

Key Points Arising from the Discussion

 

·       The Head of Finance and Business Services presented the report and revised Strategy which he said was aimed largely at reducing the overall funding gap of £1.6m on which work had already commenced.  He advised that the Council was seeking to reduce its reliance on New Homes Bonus funding.  He said that one approach was to generate additional income and the following agenda item, Hertsmere Developments Limited and Associated Matters, was a key example of this objective.

 

·       A non-Executive Member questioned the sustainability of generating additional income through commercial rents, for example.  The Finance and Property Portfolio Holder advised that all the Council‑owned shops were currently either fully let or under offer and assured him that the Council had raised rents to a level that was sustainable.  

 

·       Other Executive Members noted the commercially active nature of this authority and that the document would allow the Council to build on that attribute.

 

(Action:  Head of Finance and Business Services)

 

5.2

Hertsmere Developments Limited Business Plan and Associated Matters pdf icon PDF 176 KB

The Executive is presented with the Hertsmere Developments Limited (HDL) Business Plan and is asked to recommend a number of related matters to the full Council.

 

Additional documents:

Minutes:

Decision that:

 

1.          the Hertsmere Development Limited’s (HDL) Articles of Association and Shareholders Agreement (Appendices B and C to the report) be recommended to the Council for approval and authority be delegated to the Corporate Director, in consultation with the Leader of the Council, to make any minor changes to the Governance Agreement prior to that approval by the Council;

 

2.          subject to approval of the Business Plan and an independent site valuation, the Council be recommended to delegate authority to the Leader of the Council and the Corporate Director, as shareholder representative, to transfer the sites listed in Appendix A of the Business Plan to HDL and furthermore to approve that the site/land transfers are held as an equity holding in HDL;

 

3.          the Council be recommended to authorise the Leader of the Council and the Corporate Director to transfer to HDL the freehold of the sites intended for the building of houses for sale and to grant HDL a long lease of a minimum of 125 years of the sites intended for the building of flatted developments for sale;

 

4.          the Council be recommended to authorise the Leader of the Council and the Corporate Director to grant HDL long operational leases of 30 years in respect of sites to be developed for commercial/non-residential ‘build to rent’ and to grant HDL leases of 20 years in respect of sites to be developed for residential ‘build to rent’;

 

5.        delegated authority be sought from the Council to provide loan funding to    HDL not exceeding £50M over the period of its Business Plan, that is    until 2028 and a drawdown facility of no more than £10M in any financial    year, subject to adherence to the criteria specified in sections 3.4.5   and 9 of the Officer’s report.   In addition, all loan funding to be secured as a first charge on the property assets to which the funding relates; and

 

6.        an annual update from the Executive be provided to the Council on   HDL’s operational progress and its utilisation of the sites and funding    allocated to it pursuant to the delegated powers referred to in resolutions        (1) to (5) above.  The first update to be provided at the full Council   meeting in July 2019.

 

Reasons for the Decision

 

In light of the significantly reduced government grants and the strain on the Council’s resources, it was vital that the Council secured the best possible return from its assets.  In order to deliver both residential and non-residential development opportunities, the Council had set up a wholly-owned trading subsidiary, Hertsmere Developments Limited (HDL), for delivering much needed economic regeneration and housing growth as well as assisting to generate additional Business Rates income.

The main purpose of HDL was to concentrate on property development as well as investment, both within and outside the Borough, in order to contribute towards the Council’s revenue budgetary requirements.  Its focus would be on responding more quickly and effectively to commercial opportunities where the Council was more disadvantaged by the regulations on  ...  view the full minutes text for item 5.2

6.

Non-Key Decisions

None.

 

Additional documents:

Minutes:

None.

 

 

7.

Date of Next Meeting

The next meeting of the Executive is scheduled to take place at 6pm on Wednesday, 25 July 2018 at the Civic Offices, Elstree Way, Borehamwood.

 

 

Additional documents:

Minutes:

Noted that the next meeting of the Executive was scheduled to be held on Wednesday, 25 July 2018 at 6.00pm.

 

 

8.

Exclusion of the Public

Recommendation that, under S100A(4) pf the Local Government Act 1972, the public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in Part I, Schedule 12A to the said Act:-

 

Part II Agenda Item                                Paragraphs in Schedule 12A

 

1.       KEY DECISIONS

 

1.1           Hertsmere Developments Limited                     3

Business Plan and Associated Matters                       

 

1.2     Insurance Contract Award                                3

 

 

2.       NON-KEY DECISIONS

 

          2.1     None.

 

Additional documents:

Minutes:

RESOLVED that, under Section 100A(4) of the Local Government Act 1972, the public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in Part I, Schedule 12A to the said Act:-

 

Part II Agenda Item                                Paragraphs in Schedule 12A

 

1.       KEY DECISIONS

 

1.1           Hertsmere Developments Limited                     3

Business Plan and Associated Matters                      

 

1.2     Insurance Contract Award                                3

 

 

2.       NON-KEY DECISIONS

 

2.1     None.

 

 

9.

Hertsmere Developments Limited Business Plan and Associated Matters

Report of Officers.

 

Minutes:

Decision that:

 

1.     the Hertsmere Development Limited (HDL) Business Plan be recommended to the Council for approval at its meeting on 11 July 2018 and

 

2.     a meeting be organised between Executive Members, the opposition Group Leader and Officers to address concerns identified at the meeting, particularly around transparency issues.

 

Reasons for the Decision

 

As set out in Minute 5.2 above.   

 

Alternative Options Considered and Rejected

 

As set out in Minute 5.2 above.   

 

Key Points Arising from the Discussion

 

·       Further to the report, the Corporate Director confirmed that, whilst the loan funding could be provided out of the Council’s own resources, a risk premium of 4% to 5% would nevertheless be charged to the Council.

 

·       A non-Executive Member requested that a summary of the non commercially sensitive parts of the Business Plan be included in the report to the July Council meeting in the interests of transparency.  He also made comments on the utilisation of sites listed in section 5.3.2 of the Business Plan; the Council’s commitment to Local Housing Allowance (LHA); actively promoting the Council’s Values; and the possibility of developing outside the Borough.  The Chairman proposed, and it was agreed, that a meeting be set up with the opposition Group Leader to discuss the concerns he had raised, in particular around issues of transparency.

 

(Action:  Corporate Director)

 

 

10.

Insurance Contract Award

Report of Officers.

 

Minutes:

Decision that:

 

1.     the award of the insurance contracts, as set out in report paragraph 5.3, be approved;

 

2.     the saving against the current insurance contracts of £50k per annum be noted and that this saving will be factored into the revenue budget from 2019/20;

 

3.     it be approved that, as a result of the contract savings, any underspend against the insurance budget in 2018/19 be set aside in the uninsured losses reserve to provide for any potential future claims not covered by these or previous insurance policies;

 

4.     authority be delegated to the Deputy Section 151 Officer, in consultation with the Portfolio Holder for Finance and Property, to negotiate and extend Lot 7 (Elstree Film Studios) for a further two years subject to acceptable contract performance and agreeable renewal terms; and  

 

5.     authority be delegated to the Corporate Director, in consultation with the Portfolio Holder for Finance and Property, to annually award the contracts for Lot 3 and Lot 4 subject to a compliant tender process. 

 

Reasons for the Decision

 

The Council had a number of insurance policies in place including Employers and Public liability cover as well as insurance to protect its assets (property and fleet).  As all of these policies were due to expire at the end of July 2018, a full procurement process had been undertaken, in compliance with the Council’s contract procedure rules, to ensure that cover was continuous and the contract awards were approved accordingly.

 

Alternative Options Considered and Rejected

 

Whilst Employer liability insurance was compulsory, the decision could have been taken for the Council to ‘self insure’ some or all of its assets.  However, it was considered that this would pose an unacceptable level of risk to the Council given the total value insured by the contracts and the potential for substantial public liability claims.  This option was therefore not supported.

 

(Action:  Treasury Manager)