Issue - meetings

Decision:

The Executive approved the draft Asset Disposal Strategy set out at Appendix 1 and noted the Equality Impact Assessment at Appendix 2 of the report.

Reason(s):

To set out a strategy to generate capital receipts through the sale of assets to meet the £50M (net) target as part of the Financial Recovery Plan to reduce Council debt to achieve a sustainable financial position.

Other options considered and rejected by the Executive:

1.       Do nothing and continue to adopt a business-as-usual approach to disposing of the Council’s surplus owned assets without an approved Asset Disposal Strategy. This option is not recommended as it is highly unlikely to deliver the targeted capital receipts of £50M net by March 2027.

2.       Proceed with the Asset Disposal programme ignoring political, local community and any other sensitive issues along with all operational requirements of the Council’s service teams whilst basing any decision to dispose of an asset purely on economic grounds. This option is not recommended due to the inability of the Service teams to function without suitable premises and the likely objections that this would raise.

3.       Proceed with the Asset Disposal programme ignoring operational service requirements for use of selected assets. This option is not recommended as for each impacted Service to continue operating, it would likely result in the Council needing to fund the purchase of alternative premises.

4.       Proceed with the Asset Disposal programme without first investigating any legal issues such as restrictive covenants and planning issues which may need to be resolved prior to placing an asset on the market. This option is not recommended due to the risk of sales falling through and possible reputational damage to the Council, as such encumbrances could potentially frustrate the sale of an asset completing.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

In response to the recent cost of living crisis and high inflationary pressures, the Council was seeking to reduce its General Fund borrowing requirement. To achieve this goal, the council had already stripped back its capital programme and now sought to generate £50m (net) of capital receipts from the disposal of property assets held within the General Fund over the coming three years. This activity was an identified critical workstream within the Financial Recovery Plan endorsed by Full Council at its meeting on 30 August 2023.

A careful and considered strategic approach to identifying and progressing an accelerated volume of property asset sales was required and consequently a strategy had been drawn up and was appended to the Executive report for consideration and approval.

The Council’s financial accounts identified General Fund property assets into two major categories that were in scope for consideration.  Those were Investment Properties held purely for income generation or value appreciation but which did not fulfil any service objective, and Land and Buildings assets held for operational or strategic reasons. Other categories also in scope were defined in the financial accounts as Surplus assets which were those no longer needed and surplus to requirement, and Community assets that included open space and land assets.

The Lead Councillor for Finance and Property introduced the report. It was emphasised that each individual asset identified through the process would be subject to a thorough strategic, commercial and operational evaluation and would be presented to the Executive on a case by case basis with its own detailed report setting out a clear rationale for disposal. Where appropriate, the council would consider disposal with planning permissions if this would maximise market value. This would be an ongoing process over the course of the coming three years to achieve the target income. The Executive would have regard to any political, operational or community sensitivities.

It was noted that the process had already commenced with the disposal of certain council properties in Castle Street and Quarry Street which had achieved a higher market price than the valuation had suggested.

The Executive was hopeful that during the course of the three-year period the national economic picture would improve, but in the meantime the draft strategy was well-drawn up and was fit for purpose.

The Leader thanked the members of the cross-party working group for consideration of, and feedback on, the draft strategy and noted that individual ward councillors would be consulted as appropriate.

The Executive,

RESOLVED:

To approve the draft Asset Disposal Strategy set out at Appendix 1 and to note the Equality Impact Assessment at Appendix 2 of the report.

Reason(s):

To set out a strategy to generate capital receipts through the sale of assets to meet the £50M (net) target as part of the Financial Recovery Plan to reduce Council debt to achieve a sustainable financial position.