Agenda and minutes

Scrutiny & Overview Committee
Tuesday, 4th September, 2018 6.30 pm

Venue: Council Chamber, Town Hall, Katharine Street, Croydon CR0 1NX. View directions

Contact: Simon Trevaskis
0208 7266000  Email: simon.trevaskis@croydon.gov.uk

Link: To view webcast

Items
No. Item

12/18

Minutes of the Previous Meeting pdf icon PDF 115 KB

To approve the minutes of the meeting held on 10 July 2018 as an accurate record.

 

Minutes:

It was noted that an amendment was required on minute 13/18 bullet point 4 to read Corporate Plan rather than Corporal Plan.

RESOLVED: That the minutes of the meeting held on 10July 2018 were agreed as an accurate record, subject to the aforementioned amendment.

 

 

13/18

Disclosure of Interests

In accordance with the Council’s Code of Conduct and the statutory provisions of the Localism Act, Members and co-opted Members of the Council are reminded that it is a requirement to register disclosable pecuniary interests (DPIs) and gifts and hospitality to the value of which exceeds £50 or multiple gifts and/or instances of hospitality with a cumulative value of £50 or more when received from a single donor within a rolling twelve month period. In addition, Members and co-opted Members are reminded that unless their disclosable pecuniary interest is registered on the register of interests or is the subject of a pending notification to the Monitoring Officer, they are required to disclose those disclosable pecuniary interests at the meeting. This should be done by completing the Disclosure of Interest form and handing it to the Democratic Services representative at the start of the meeting. The Chair will then invite Members to make their disclosure orally at the commencement of Agenda item 3. Completed disclosure forms will be provided to the Monitoring Officer for inclusion on the Register of Members’ Interests.

 

Minutes:

There were none.

 

14/18

Urgent Business (if any)

To receive notice of any business not on the agenda which in the opinion of the Chair, by reason of special circumstances, be considered as a matter of urgency.

 

Minutes:

There were no items of urgent business.

 

15/18

Report of the Chief Executive / Head of Paid pdf icon PDF 91 KB

This report from the Chief Executive provides an update on the New Operating Model and the current workforce profile.

Additional documents:

Minutes:

Report of the Chief Executive / Head of Paid Service

The Committee received a presentation from the Chief Executive and Head of Paid Service of Croydon Council, Jo Negrini, which covered the proposed new operating model and an update on staffing at the Council.

A key activity at present for the Council was the production of the new Corporate Plan, which would be considered by the Cabinet at their meeting on 28 September. This would set out the priorities for the next four years and reflected commitments made in the Labour Manifesto. The purpose of the new operating model was to set out how these priorities would be achieved. During the course of the Chief Executive’s presentation the following points were noted:-

  • It was estimated that the population of Croydon would grow to 445,000 by 2031. This would mean that it was growing faster than most of other areas of London. Croydon also had the youngest population of any London borough.
  • Croydon was cited in both the Local Enterprise Partnership for London and the Coast to Capital Local Enterprise Partnership as a key economic area.
  • £105m had been removed from the base budget since 2011/12 and when countered against a rising demand for services from local residents provided a significant challenge. This meant that the Council had to rethink how it could deliver its services differently, such as working with people at an earlier stage and ensuring that the different services offered across the Council were coordinated.
  • Over the past 12 months the Council, in conjunction with the NHS, had conducted a major data gathering exercise to establish which services were most used by residents across the Borough, with a view to establishing how best to preventing issues becoming more serious problems.
  • Analysis of the data had demonstrated that different parts of the Borough had significantly varying needs which would enable the Council to focus services to where they were most needed.
  • Through this process it had become clear that there was a need for increased collaboration with partners, such as the NHS and community groups, to ensure that all available money was being spent on the key priorities for the borough. It would also be essential to involve residents in the design and delivery of services to gain public buy-in of the new model.
  • As part of the process the organisational design of the Council was being reviewed, with a different model of working being trialled to establish whether it would achieve the intended outcomes or not.  This new model would be tested in three localities in the Borough, namely Thornton Health, New Addington and Coulsdon.

It was questioned how Members would be given the opportunity to feed into the process of developing the new operating model. It was confirmed that Officers had been working with the Administration on the development of the new operating model, but once work started on the design and delivery of services in localities across the Borough Officers would also increasingly work with local  ...  view the full minutes text for item 15/18

16/18

Work Programme 18/19 pdf icon PDF 87 KB

To agree the scrutiny work programme for future meetings.

Additional documents:

Minutes:

The current work programme for 2018/19 was agreed.

17/18

Update on Financial Strategy 2018/22 - Asset Investment pdf icon PDF 16 KB

To provide the Committee with more detail on the approach to asset investment and the criteria for making decisions about investment.

Additional documents:

Minutes:

The Cabinet Member for Finance and Resources, Councillor Simon Hall, introduced the report, highlighting to Members that it had been a priority in the Labour Party election manifesto to use the borrowing power of the Council to improve service delivery and increase income generation. The Asset Investment Strategy set out in the report formalised this commitment using a balanced approach. 

The Executive Director for Resources advised that local authorities were increasingly pursuing property investment as a means of increasing income and as such the different approaches employed by other authorities had been used to highlight best practice in designing the Council’s own strategy as well as being informed by the framework provided by the Chartered Institute of Public Finance and Accounting (CIPFA).

The Chairman, Councillor Sean Fitzsimons, welcomed the paper, but questioned whether it linked into the Council’s strategy for dealing with its existing debt. In response it was confirmed that a key intention of the Strategy was for each investment to deliver a net income above the cost of borrowing. It was not expected that this would lead to an additional burden on Council Tax Payers, with the risks carefully reviewed before any decision to proceed on each purchase.

As a follow-up it was questioned whether there were the requisite skills with the Council to build and manage an investment portfolio. It was confirmed that an element of professional advice would be required on each decision and some investments may be in need of a strong asset management presence which would need to be bought in and factored into the costs. The Council does have a certain level of expertise in this area within the workforce, but it additional support would need to be brought for the more technical aspects.

The Cabinet Member, Councillor Simon Hall, highlighted to the Committee that there were risks in pursuing this approach, which increased as more was invested, even with a balanced portfolio. It was also highlighted that there would be a focus within the strategy of pursuing investment opportunities within the borough, unlike some other local authorities who invested across a wide geographical area.

The main risk factors were questioned along with the Council’s ability to mitigate against any such risks. It was confirmed that any valuation report on an investment would include a number of different valuations including redevelopment for other uses. Additionally the risks involved in each investment would be thoroughly reviewed prior to purchase and steps to mitigate against these identified where possible.

It was questioned whether the Asset Investment Strategy would have an effect upon the Council’s ability to borrow to build public assets? It was highlighted that the Council was already borrowing funds to build new housing and that the intention of the strategy was to increase income for other options.

It was also questioned how the different factors were balanced when deciding if an investment should be pursued or not. It was advised that should one factor raise significant concern, then it may be enough to  ...  view the full minutes text for item 17/18

18/18

Call-In : Acquisition of the Freehold interest in the Croydon Park Hotel as a commercial investment pdf icon PDF 52 KB

The Committee is asked to consider and respond to the Call-In in accordance with the procedure set out in the Council’s constitution.

Additional documents:

Minutes:

Councillor Andy Stranack introduced the Call-In item, outlining the reasons why the key decision to acquire the freehold interest in the Croydon Park Hotel had been called in. These reasons included the decision being made over summer holiday period which raised concern over the transparency of the process, there did not seem to be a clear framework in place for the decision to be made, there was concern that the purchase was inconsistent with the budget and that it was not in keeping with Council policy.

The Committee agreed (3 votes for and 2 against) that it would review the decision and allocated 30 minutes for this item.

Councillor Simon Hall, the Cabinet Member for Finance and Resources, advised the Committee that in making the decision the risks and rewards had been analysed and it was felt that the property represented good value as an investment. The asset included a long lease with the current tenant and from the valuation it was estimated that the return would be in excess of £1m per annum over the cost of borrowing. There was also good potential for the future redevelopment of the site should the hotel no longer prove to be viable.

The Executive Director for Resources highlighted to the Committee that the existing Cabinet Asset Strategy, which was agreed in 2014, included provision for income generation, but Asset Investment Strategy (the previous item) had been brought forward to put a framework in place for future asset investment. The Efficiency Strategy also included provision for pursuing commercial opportunities and the investment would contribute towards the delivery of 2018/19 budget.

The Chairman outlined that having reviewed the process and the information provided it was for the Committee to decide the outcome of the call-in. It having been confirmed that there was an existing principal in place for asset investment, which was supplemented by the previous item on the agenda, the Committee would have to decide whether there remained valid reasons for the call-in based on the four criteria outlined in the original call-in request, namely:

i) The decision is outside the policy framework;

ii) The decision is inconsistent with the budget;

iii) The decision is inconsistent with another council policy; and

iv) Other:-

                                                        

“The decision was not open and transparent. There has been no opportunity for questions to be raised by back bench Councillors and the public to verify compliance with policies and the budget, and that the purchase is a sound investment. ”

Councillor Jason Cummings raised concern that as the purchase was predicated on an expenditure of money to receive a return, the financial information provided raised questions about the tenants continuing ability to pay their lease. The accounts showed a loss of £290,000, with reserves of £140,000 and having previously been sold in July 2017 still showed a loss. As such it was questioned should the tenant default on their payments, if it would still be a good acquisition and how was the covenant strength rated?

The Executive Director gave  ...  view the full minutes text for item 18/18

19/18

Exclusion of the Press and Public

The following motion is to be moved and seconded where it is proposed to exclude the press and public from the remainder of a meeting:

 

“That, under Section 100A(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following items of business on the grounds that it involves the likely disclosure of exempt information falling within those paragraphs indicated in Part 1 of Schedule 12A of the Local Government Act 1972, as amended.”

 

 

Minutes:

Not needed.

 

20/18

Call-In: Acquisition of the Freehold interest in the Croydon Park Hotel as a commercial investment

The Committee is asked to consider and respond to the Call-In in accordance with the procedure set out in the Council’s constitution.