At its meeting on 9 January 2018 the Executive received a report of the Strategic Director Corporate Services (Document “AP”) which proposed a strategy for growing the Council’s sources of income from Council Tax, Business Rates and investment in assets, recommending an Investment Advisory Group is established to oversee activity and manage risks.

Executive resolved as follows:

(1)       That the basic premise underpinning Document “AP” be             accepted, that targeted activity should be undertaken to grow            income from:

            (a)       Council Tax

            (b)       Business Rates

            (c)       Income-generating investment

(2)       That the next steps outlined at Section 8 of Document “AP” be pursued.

ACTION: Strategic Director Corporate Services

The decision of the Executive has been called in by Councillor Cooke.

The reasons for Councillor Cooke requesting the call-in are:

1.         Many Members have had no opportunity to consider the governance            and accountability issues around the Council’s property investment           activities.

2.         To allow members to consider the risks of such a strategy.

3.         To allow members to consider whether the Government’s recently    announced review of the purpose for the Public Works Loan Board           affects the Council’s strategy.

In accordance with Paragraph 8.6.9 of Part 3E of the Constitution Members of the Overview and Scrutiny Committee can, following consideration of the matter, resolve to:

(1)       Release the decision for implementation.

(2)       Refer all or part of the decision back to the Executive to    reconsider it in the light of any representations the Committee may make.  The decision may not be implemented until the             Executive has met to reconsider its earlier decision.

(3)       Refer the decision to full Council for consideration, in which case         the decision may not be implemented until the Council has met to             consider the matter.

If the Committee makes no resolution, in accordance with paragraph 8.6.9 of the Constitution, the decision may be implemented.

At its meeting on 9 January 2018 the Executive received a report of the Strategic Director Corporate Services (Document “AP”) which proposed a strategy for growing the Council’s sources of income from Council Tax, Business Rates and investment in assets, recommending an Investment Advisory Group is established to oversee activity and manage risks.

Executive resolved as follows:

(1)       That the basic premise underpinning Document “AP” be accepted, that       targeted activity should be undertaken to grow income from:

            (a)       Council Tax

            (b)       Business Rates

            (c)        Income-generating investment

(2)       That the next steps outlined at Section 8 of Document “AP” be           pursued.

The decision of the Executive had been called in by Councillor Cooke.

The reasons for Councillor Cooke requesting the call-in are:

1.         Many Members have had no opportunity to consider the          governance   and accountability issues around the Council’s           property          investment activities.

2.         To allow members to consider the risks of such a strategy.

3.         To allow members to consider whether the Government’s recently    announced review of the purpose for the Public Works Loan Board           affects the Council’s strategy.

The Strategic Director Corporate Services explained how the Investment Strategy might work in practice, and that Bradford, unlike some of its contemporaries had been very cautious in pursuing investment opportunities and that the Advisory Group would pursue a Investment Strategy based on expert advice and guidance.  He acknowledged that the Government had issued a consultation on changes to the Capital Financing Regulations and that CIPFA will also be issuing an updated Prudential Code in 2018, and therefore the outcomes of these will further inform the work of the group once it is established.

A Member asked a number of questions in relation to how the proposed Advisory Group allied itself with the Councils’ existing governance structure and how it would be constituted.  In addition how will the group take external advice on investments; how will  decisions be made; what reporting arrangements were envisaged; what were the risks associated with such a model and had consideration been given to having a legal advisor on the group.

In response the Strategic Director stressed that any investment decision would be open to due diligence and that appropriate advice would be taken from experts, and that their work could be modelled on the work of the West Yorkshire Pension Fund investment Board.  He added that the constitutional and governance arrangements still had to be finalised and therefore the report lacked detail in this respect.

During the discussion Members also stressed that there had to be a clear rationale about what social purpose would be as part of the Investment Strategy and that Standing Orders would need to be clear about the role and responsibilities of the Advisory Group, and it was therefore:

Resolved –

(1)       That the decision be released for implementation.

(2)       That this Committee requests that the Executive ensures that    Standing Orders terms of conditions need to be clearly set out in           relation to the establishment of the Investment Advisory Group.

(3)       That this Committee requests that there has to be a clear rationale        about what social purpose is as part of the Investment Strategy,          including how this supports the role of the elected member.

ACTION:       City Solicitor (Resolution 1 and resolution 2 referral to                               Executive)

                        Strategic Director Corporate Services (Resolution 3)