Agenda item

Cabinet Member: Cabinet Member for Croydon Renewal, Councillor Stuart King

Officer: Interim Chief Executive, Katherine Kerswell

Key decision: no

RESOLVED: To

1.    Note the draft capital programme, which excludes the Housing Revenue Account capital programme. Note the final capital programme will be presented for Full Council approval as part of the budget setting process;

2.    Recommend that Full Council approve amendments to the in year capital programme;

3.    Note the changes to the Public Works Loan Board (PWLB) borrowing requirements, include the need to provide an outline capital strategy to central government before any further borrowing is permitted;

4.    Note the proposal to review the Highways budgets alongside the Highways Strategy in the new financial year; and

5.    Cease the Asset Investment Board, as the Asset Acquisition Programme has stopped.

The Cabinet Member for Croydon Renewal, Councillor Stuart King, noted that the report included the draft capital programme for 2021-24 and proposed in-year amendments to the capital budget. It was noted that the in-year capital programme had been reduced by £155m in October 2020 to reflect the council’s financial position which had been principally made of £100m of savings from the removal of the asset acquisition line. The Cabinet Member stressed that the 2021-24 capital programme was indicative only and revisions would be made ahead of the final version being taken to Cabinet in February 2021 and Council in March 2021 for approval. The Director of Finance, Investment & Risk and Section 151 Officer reiterated that the programme was draft only and that further changes would be made ahead of final approval.

In response to the Cabinet Member for Sustainable Croydon’s question on the impact on the Growth Zone, the Cabinet Member for Croydon Renewal stated that Growth Zone funding had been reduced at the beginning of the 2020/21 financial year to reflect the current economic position of the town centre. It was stressed that it was important that investment in the Growth Zone was affordable and would generate revenue in terms of business rates. The Director for Finance, Investment & Risk and Section 151 Officer advised Members that the Growth Zone had been adjusted from £15m to £7m and had been adjusted in light of the economic climate and would continue to be reviewed in the development of the capital programme.

The Shadow Cabinet Member for Finance & Resources, Councillor Jason Cummings, stated that Members had got used to seeing borrowing figures increase year on year but noted that the council’s ability to support borrowing had been significantly impacted by the financial position of the authority. The Shadow Cabinet Member noted that the draft capital programme committed the council to increased levels of borrowing despite the council already being at the Prudential borrowing limit. As such, it was queried whether the council would look to increase that limit and when plans would be brought forward to reduce the total level of borrowing.

In response, the Cabinet Member stated the indicative programme represented a reduction in borrowing to fund the capital programme as it was recognised that it was essential that capital programme was affordable. The Director for Finance, Investment & Risk and Section 151 Officer confirmed that the Treasury Management Policy, which included the Prudential borrowing limit, would be taken to Cabinet in February 2021 and Council in March 2021. It was further noted that borrowing would likely increase if the council’s capitalisation direction request was approved but it was the ambition of the council to reduce the level of borrowing required by reviewing the capital programme.

The Shadow Cabinet Member for Culture, Leisure & Sport, Councillor Vidhi Mohan, noted that the draft programme identified £47.9m from asset disposal and queried what assets were due to be disposed. In response, the Cabinet Member stated that the council was developing an Asset Disposal Strategy which would include a framework which would be applied when decisions in relation to asset disposal were made. The Cabinet Member noted that the external auditors had raised concerns that the Asset Acquisition Strategy had been agreed following the purchase of Croydon Park Hotel and so the council would seek to agree the Strategy ahead of announcing any potential disposals. The figure contained within the indicative programme had been based on assumptions on the potential value of assets but those figures needed to be verified. The Cabinet Member stressed that it was important that robust assessments took place and the Strategy was agreed first before any assets were disposed of.

The Leader of the Council delegated authority to the Cabinet to make the following decisions:

RESOLVED: To

1.     Note the draft capital programme, which excludes the Housing Revenue Account capital programme. Note the final capital programme will be presented for Full Council approval as part of the budget setting process;

2.     Recommend that Full Council approve amendments to the in year capital programme;

3.     Note the changes to the Public Works Loan Board (PWLB) borrowing requirements, include the need to provide an outline capital strategy to central government before any further borrowing is permitted;

4.     Note the proposal to review the Highways budgets alongside the Highways Strategy in the new financial year; and

5.     Cease the Asset Investment Board, as the Asset Acquisition Programme has stopped.