Issue - meetings

Further to Minute 37 (19 September 2017), the Cabinet Member for Finance, Performance and Core Services presented an update on the delivery of the Council’s Investment and Acquisition Strategy (IAS) targets, together with the proposed inclusion of a new asset class of commercial lending.

The Cabinet Member explained that in order to respond to the unprecedented challenges stemming from Government cuts to public sector spending, the Council had to continually look at innovative ways to invest in Barking and Dagenham’s future, to support growth and generate a long-term financial return to fund Council activities.  A number of regeneration projects recently approved by Cabinet had included loan arrangements to the development partners and while the Cabinet Member acknowledged the risks associated with commercial lending, the potential benefits had been assessed as warranting an allocation of £200m for that new asset class within the IAS. 

The Cabinet Member also referred to the intention for future major works to residential properties held via B&D Reside to be funded by borrowing or use of future surpluses.

The Cabinet resolved to:

(i)  Note the progress being made to meet the IAS income target;

(ii)  Approve, in principle, the revised asset class of commercial lending to enable regeneration, up to an allocated value of £200 million, and the expected returns matrix contained in Appendix 1 to the report, subject to:

a)  Commercial due diligence and underwriting advice being procured as to commercial, legal, accounting, due diligence, risk management, information and state aid requirements, and appropriate protocols being put in place;

b)  Any necessary revisions to the Annual Investment Strategy in-year being approved by the Assembly as part of the Treasury Management Strategy Statement;

c)  Any commercial lending decisions until the protocols are in place pursuant to recommendation (ii)(b) above being made on a case by case analysis and due diligence;

d)  Regular review and monitoring of the asset class and Investment Strategy;

(iii)  Agree the revised IAS at Appendix 2 to the report, subject to final approval of the Strategy by the Assembly as part of the Treasury Management Strategy Statement;

(iv)  Approve, in principle, the policy to fund future major works on residential schemes held by B&D Reside either from future borrowing or from future rental surpluses; and

(v)  Authorise the Chief Operating Officer, in consultation with the Director of Law and Governance (or an authorised delegate), to agree and execute all the legal agreements, contracts and other documents on behalf of the Council required to implement any aspect of the investment programme identified in the report.