Agenda and minutes

Cabinet
Tuesday, 15th September, 2020 10.00 am

Venue: https://www.youtube.com/ScarboroughCouncil

Items
No. Item

1.

Declarations of Interest pdf icon PDF 81 KB

Members are reminded of the need to consider whether they have a disclosable pecuniary, prejudicial or other (personal) interest to declare in any items on this agenda.  Details of any interest must be declared at the start of the meeting or as soon as any interest becomes apparent during the meeting.  The attached form must also be completed. Any advice required should ideally be sought before the day of the meeting.

 

Minutes:

No declarations of interest were received.

 

2.

Minutes pdf icon PDF 289 KB

To approve as a correct record and sign the Minutes of the meeting held on 21 July 2020 attached.

Minutes:

RESOLVED that the minutes of the meeting held on 21 July 2020 be approved as a correct record and signed by the Chairman.

 

 

3.

Public Question Time

Public questions of which due notice has been given and which are relevant to the business of the Cabinet.

Minutes:

Members were advised that two public questions had been received; however, the questioner could not attend, so the Chair would exercise his discretion to provide a response in writing.

 

4.

Forward Plan pdf icon PDF 398 KB

To review the Cabinet’s Forward Plan (reference 20/172) attached.

Minutes:

The Cabinet considered the Forward Plan (Reference 20/172).  The Portfolio Holder for Quality of Life, Councillor Kershaw commented that the report on the proposed merger of Scarborough Museums Trust and Creative Industries Centre had been deferred to November.

RESOLVED that, subject to the above, the Forward Plan be approved.

 

5.

Progress of Scrutiny of Executive Decisions

To receive an oral report by the Chief Executive.

Minutes:

The Chief Executive reported that Portfolio Holder for Neighbourhoods’ decision dated 17 July in respect of Crematorium and Cemeteries Services fees and charges was called in for scrutiny and was considered by the O&S Board at its meeting on 9 September.  At that meeting the O&S Board made some recommendations to the Portfolio Holder for Neighbourhoods regarding his decision dated 17 July which were currently under consideration.

 

6.

Financial outturn 2019/20 pdf icon PDF 809 KB

To consider the report of the Director (NE) (reference 20/162) attached

 

Additional documents:

Minutes:

The Cabinet considered a report by the Director (NE) (Reference 20/162) in respect of the Council’s financial outturn position for the 2019/20 year.  Introducing both this report and Item 7, the Portfolio Holder, Councillor Jefferson noted that both reports should be read together and in conjunction with the Financial Strategy approved by the Council on 28 February 2020.  She commended the Director, Mr Edwards and his staff for preparing such comprehensive and accessible reports and for overseeing the Council’s grants operation during the COVID pandemic.  Mr Edwards then presented his report which concerned the Council’s final accounts for 2019/20.  These had been completed and published on the web, and were subject to external audit.  Members were reminded that in 2019/20 the Council faced a budget shortfall of £1.5m in the context of a gross revenue budget of £75m.  Robust monitoring processes were in place which resulted in an out-turn position which was close to estimates.  The £313k revenue underspend had been transferred to the General Fund Reserve as per the approved Financial Strategy.  Capital expenditure had been updated to include slippage in the capital programme, whilst overall, the capital expenditure prudential indicators remained unchanged.  Mr Edwards was pleased to report that in regard to coast protection works, the high risk, ambitious projects of Scarborough Spa stabilisation and Whitby Piers were now complete, whilst the total programme amounting to in excess of £30m was nearing completion.  As the coast protection works were so significant in terms of financial value and risk, £3.172m of the Council’s £6m contribution was earmarked as a contingency budget. £1m of this budget was created from the redirection of resources from a previously approved capital scheme at Eskside Wharf and a deferral of those works.  Since the major schemes were now almost complete it was deemed appropriate to reallocate £1m of the unutilised contingency back to the Eskside Wharf scheme. The remaining uncommitted contingency budget therefore stood at £1.371m which was now available resource for the new Capital Strategy under preparation.  He was pleased to report further that £136k had been secured from the Environment Agency for the Robin Hoods Bay Sea Wall scheme.  Members then discussed the report and asked questions.  Councillor Randerson was pleased with the regeneration activities in Eastfield alluded to in Appendix B, but asked if pressure could be put on the Highway Authority to help kick start the Westway safety improvements as part of the programme.  Mr Edwards would look into this matter.  With the permission of the Chairman, Councillor Cockerill addressed the meeting praising the creation of the £6m ‘floating fund’ to enable the completion of major, high risk coastal protection projects, for which there had been significant funding shortfalls, through the pooling and robust control of individual project contingencies.  He cited in his ward the Filey Flood Alleviation Scheme, which although not yet complete, still helped mitigate the impact of the heavy and prolonged rainfall in the town at the end of August.  Mr Edwards thanked Councillor Cockerill, and in  ...  view the full minutes text for item 6.

7.

Interim budget report 2020/21 pdf icon PDF 433 KB

To consider the report of the Director (NE) (reference 20/167) attached

 

Minutes:

The Cabinet considered an interim budget report by the Director (NE) (Reference 20/167) taking into account the financial impacts of the COVID pandemic.  The Director, Mr Edwards gave a detailed presentation of his report outlining the ongoing impact of the COVID pandemic on the Council’s finances: the shortfalls in income, the anticipated and received government grants which reduced this figure, the net budgetary shortfall of £5.6m and how this shortfall would be addressed, an update on the Capital Strategy including available resources, the Council’s reserves and financial resilience, the projected budget position for 2020/21 and the budget strategy for 2021 onwards.  In regard to income from sales, fees and charges, the projected shortfall to the end of July was £4.37m – a significant proportion of which was car parking.  This projected shortfall for car parking income may reduce as the year progressed.  The government would compensate up to 75% of shortfall incurred on this type on income.  The projected shortfall of rental and investment income of £1.24m was not however eligible for government compensation.  The Council’s revenue budget relied on £5.4m income from the localised Business Rates scheme.  This consisted of a £4.3m baseline largely underwritten by government and £1.1m dependent on economic growth which was at risk and therefore included in the COVID related shortfall.  £24.3m of business rate relief had been awarded across the borough since the pandemic which reduced the risk of non-collection.  The Council was also part of a North and West Yorkshire Business Rates Pool.  The revenue budget did not rely on surpluses from this pool, and no surplus was expected in the current year.  In terms of Council Tax, the pandemic affected income in two ways: non-collection rates and increase in uptake of Local Support for Council Tax which was expected to increase as the government furlough scheme came to an end and more people began to claim universal credit.  The Council had received additional financial support from government for LSCT, but this was capped.  Current projections assumed a 5% shortfall in Council Tax income equating to £463k but this was highly uncertain.  The pandemic had also generated additional costs for the Council currently estimated at £2.8m including support for homeless people, re-opening facilities, the Leisure Operating Contract, and £300k of funding to take forward recovery plans.  On the plus side, the Council had so far received £1.376m in government grants in three tranches which included rough sleepers grant, new burdens awarded for processing government grant claims, and funding for the DBID company.  The outcome was still awaited on negotiations to receive compensation for the additional costs of the Leisure Operating Contract.  Details of the government compensation package for income shortfall in sales, fees and charges emerged during July and August, and was expected to amount to some £2.9m for this council.  In terms of non-COVID related budget variations at Quarter 1, there had been £95k savings on vacant posts, £90k overspend on the Scarborough Museums Trust contract price, savings in travel and mileage  ...  view the full minutes text for item 7.

8.

Exclusion of the Public

To consider the following motion:

“that in accordance with Section 100A(4) of the Local Government Act 1972 (and subject to consideration of the public interest under Paragraph 10 of Part 2 of Schedule 12A of the Act) 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 1 of Schedule 12A of the Act), namely information;

(a) relating to any individual;

(b) which is likely to reveal the identity of an individual; and/or

(c) relating to the financial or business affairs of any particular person (including the authority holding that information)”.

 

Minutes:

The Chairman noted that the remaining report on the agenda had some private and confidential content which might necessitate moving into private session should members wish to discuss the sensitive information therein.  In the event, the item was considered in public.

 

9.

Agricultural portfolio

To consider the report of the Director (RB) (reference 20/164) attached

 

Minutes:

The Cabinet considered a report by the Director (RB) (Reference 20/164) in respect of the proposed rationalisation of the Council’s agricultural land and property portfolio.  Members were advised that the Commercial Property Investment Strategy approved by full Council in 2018 not only concerned investment in new properties, but also the rationalisation of the Council’s existing assets through assessing cost versus income and through identifying potential opportunities to add value.  The Council’s agricultural portfolio was an historic landholding which consisted mostly of hereditary tenancies.  The capital value of the land was inflated above the actual value of the ability to farm it in isolation and pay rent would support - hence it traditionally returned very low income yields to investors.  The high value was attributable to exemption from capital gains and inheritance taxes, and the availability of grants and subsidies.  Further, values had also increased through economies of scale and farmers obtaining adjoining land.  The opportunity cost to the Council of retaining broad ownership was therefore not felt to be worth the longer term capital and rental growth prospects.  A number of options were open to the Council: sell the land and reinvest in higher yielding assets, reinvest in the existing portfolio to enhance quality and value, or any other corporate initiatives to help deliver the new Capital Strategy.  The report therefore sought in principle approval to assess the Council’s agricultural portfolio with a view to the potential sale of freehold interests, with final approval to come back to the Cabinet or Portfolio Holder dependent on the value involved.  In reply to members’ questions, the Estates and Property Manager confirmed that none of the sites in the report were located within development limits or had been allocated for housing.  Further, each site would be considered on a case by case basis including providing advice to the tenant to enable them to purchase the freehold.       

RESOLVED that the Council:

(i)        Approve the rationalisation of the Agricultural land and property portfolio by granting in principle approval for the potential freehold sale of up to approximately 1,255 acres of land. The land comprises of 19 holdings located throughout the borough listed in the schedule attached (Appendix 1) subject to obtaining satisfactory offers from the tenants or in the open market.

(ii)      To appoint specialist agricultural consultants to support Estates & Strategic Land in each individual negotiation only as required to secure the best price.

(iii)     Note that a further report seeking final approval for each individual asset sale will be presented to the relevant authoriser dependent on the level of receipt following a negotiation and independent valuation and/or a marketing period and in accordance with the Council’s constitution.

 

Reasons

(i)        To negotiate with tenants in the first instance to unlock marriage value premium where properties are held in Agricultural Holding Act (AHA) leases or on the open market where we have vacant possession or where we have a flexible Farm Business Tenancy (FBT) to explore the sale with the tenant and/or the open market whichever  ...  view the full minutes text for item 9.