Apologies for absence were received from Councillors Ejaz Aslam and Leslie Hills. Councillors Derek Ashenden and Helen Ashenden attended as their substitutes.

An apology for absence was also received from Councillor Deborah Croxton.

The minutes of the Overview Scrutiny Committee held on Thursday, 8 February 2024 were agreed and signed by the Chair.

No declarations of interest were made.

Items called in from the Cabinet meeting of Monday 18 March 2024.

(Please bring the Cabinet agenda for Monday 18 March 2024 previously circulated to Members).

The Chair explained that the above item was considered at Cabinet on 18 March 2024 and that it had been called-in in order for the Committee: -

·         to consider the impact that the decision will have on the town centre offer and the impact that the decision will have on the businesses of the town;

·         to consider if the savings proposed will make a meaningful difference to the Council's budget position; and

·         to consider if the decision taken was within the public interest.

The Director (Communities and Inclusive Growth) advised that, in the last decade, the Council had experienced a sustained period of challenge to its financial sustainability. In response to those challenges, the Council’s Medium Term Financial Strategy (MTFS) since 2016 had focused on the delivery of a multi-faceted programme of activity intended to optimise income generation, innovate delivery of services and ensure that the limited resources of the Council were appropriately focused on the needs of the Borough.

The Council delivered against the programme and, in February 2020, was able to announce that £4.25m of base budget reductions had been implemented in the period since 2016, putting the Council in a position where it had in place a sustainable financial plan for the forthcoming 10 years.

Since that time, the Council had faced further significant challenges as a result of the COVID-19 Pandemic and the economic situation. In response to this, in February 2023, the Council approved a revised five-year MTFS spanning 2022-23 to 2026-27 intended to respond to the identified budget gap at that time.

Despite delivering measures to reduce the Council’s base budget by £3.3m since 2022, cost and demand pressures continued to be present and the Council’s level of annual expenditure continued to exceed anticipated income with working balances significantly depleted in recent years and no longer a sustainable source to manage the Council’s financial position.

In February 2024, Full Council was informed that without proactive action to deliver the Balancing the Budget initiatives, the Council could find itself in a position where it had limited capacity to respond to and manage the impact of any significant or unexpected events or emergencies during 2024-25 and set a balanced budget for 2025-26.

Therefore, the report presented to the Cabinet set out options for savings and reducing cost pressures in relation to activities undertaken by the Council within Gravesend Town Centre; the three main activities being Splash of Colour, Town Centre Dressing and the Visitor Information Centre. It should be noted that Town Centre Dressing did not incorporate formal flag raising on the Community Square.

The options for consideration were outlined in appendix one to the report. The options had been set out into three categories which would deliver three different levels of savings ranging from £13,000 to £63,000:-

·         Option A – continue current service with reduced budget and continuation of the Visitors Information Centre;

·         Option B – reduce service and relocation of the Visitors Information Centre; or

·         Option C - cessation of a service.

The  ...  view the full minutes text for item 35.

Items called in from the Cabinet meeting of Monday 18 March 2024.

(Please bring the Cabinet agenda for Monday 18 March 2024 previously circulated to Members).

The Chair explained that the above item was considered at Cabinet on 18 March 2024 and that it had been called-in in order for the Committee: -

·         to be provided with the opportunity to understand the reason and justification for the urgency of the decision;

·         to consider the potential impacts that the various outcomes will have on the Council's finances; and

·         to ensure that proper and correct due diligence is in place around the proposed course of action.

The Director (Corporate Services) advised that, in the last decade, the Council had experienced a sustained period of challenge to its financial sustainability. In response to those challenges, the Council’s Medium Term Financial Strategy (MTFS) since 2016 had focused on the delivery of a multi-faceted programme of activity intended to optimise income generation, innovate delivery of services and ensure that the limited resources of the Council were appropriately focused on the needs of the Borough. Optimisation of income generation did not only consider opportunities for the Council to derive income from the fees and charges it levied and use of the assets it had available to it, but also on how it used its cash balances to generate a return which can then be applied to pay for Council services. The practice of investing cash balances held was common across the local government sector, with different approaches adopted based on the level and duration of cash balances an authority holds and its risk appetite, but always with a focus on security and liquidity before yield.

In approving the 2016-17 Treasury Management Strategy Statement (TMSS), Full Council provided the capacity to place a maximum of £10m in such investments with a limit of £5m placed into each fund. Link, the Council’s treasury management consultants, were engaged to assist officers with the identification and selection of suitable Property Fund Management companies.

Due diligence was undertaken and a report was taken to the Property Acquisitions Cross Party Member Working Group on 24 May 2016; it was agreed that the following investments be made into each Property Fund: -

·         Hermes - £3m;

·         CCLA - £2m; and

·         Lothbury - £5m.

On 1 July 2016, 2,658 units were purchased in the Lothbury Property Fund. Each unit was priced at £1,862.17 which gave an entry investment value of £4,949,648. An entry fee of 1% was charged on top which resulted in a fee of £49,492, giving a total cost of £4,999,140.

On 7 June 2023, Link alerted the Council to the fact that Lothbury had received redemption requests from investors which totalled £500m, in addition to the £170m still outstanding from the previous quarter against a fund value at 31 March 2023 of £1.086bn. All property funds had seen an increase in the level of redemption requests at the time, and whilst it was not clear why Lothbury had seen such a high number, Link believed several factors had come into play. These factors were outlined in section 2.1 of the report.

The level of redemptions logged were a  ...  view the full minutes text for item 36.