Issue - meetings

To receive and consider report 185/08 of the Strategic Director. 

(Time 3.24pm to 3.31pm)

The Executive received and considered report 185/08 of the Strategic Director which reviewed the Council’s policy on property investment.  The report proposed a change to the policy and an addition to the capital programme.  The Executive also received and noted the confidential appendices relating to the report. 

The policy had been adopted in March 2004.  However, the current recession had prompted a review.  It was suggested that the maximum percentage of the investment portfolio in property should be 80% of the total, up from 75%, and the cash funds invested (i.e. not held for cash-flow purposes) should not fall below £5 million, reduced from £10 million. 

In order to allow the council to react quicker to property investment opportunities it was also suggested that a sum of £5.5 million should be included in the capital programme for 2009/10 for the possible purchase of an investment property up to the value of £5.2 million plus costs, the actual purchase to be agreed by the Portfolio Holder with responsibility for property. 

The Chair invited the Chairman of the Scrutiny Committee, Councillor Melinda Tilley, to speak.  Councillor Tilley asked for confirmation that the decision to purchase property at this level of cost was a Key Decision, and would therefore be subject to notification to Scrutiny CommitteeMembers in accordance with the Council’s normal call-in procedure.  The officers confirmed that this was the case.  Councillor Tilley asked to be kept informed before any such decision was taken. 

Members supported the amendment of this policy as suggested but noted that policy changes were ultimately a decision of the full Council.  It was believed that the changes would bring a better return for the Council.  £5 million cash funds were expected to be sufficient to cover unforeseen events in the period of the current medium term plan.  However, other investments could be converted to cash funds in the unlikely event that £5 million proved to be insufficient. 

R E C O M M E N D E D

(a)               that the Property Investment Policy be amended so that the maximum percentage of the investment portfolio in property be 80% of the total (up from 75%) and the cash funds invested (i.e. not held for cash-flow purposes) should not fall below £5 million (down from £10 million); and

(a)               that a sum of £5.5 million be included in the capital programme for 2009/10 for the possible purchase of an investment property up to the value of £5.2 million plus costs, the actual purchase to be agreed by the Portfolio holder with responsibility for property.