Asset Disposal Strategy Scrutiny Commission ... - Lambeth Council

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2.15 Recommendation M: shopkeepers’ ability to purchase commercial properties is protected 2.15.1 Shopkeepers will be consulted as part of any disposal strategy for the commercial portfolio, including arrangements for them to purchase their properties. 2.16 Recommendation N: Cabinet Housing Commission considers the appropriateness of the voids disposals policy 2.16.1 The Housing Commission will consider policy on the sale of void properties in the context of addressing options for meeting the housing investment gap. The costvalue ratio formula for housing disposals has recently been updated but will be kept under review as necessary. 2.17 Recommendation O: Disposals monitoring reports are considered by Finance Scrutiny Sub-Committee 2.17.1 Progress against annual disposals budgets is reported in the Finance Monitor. The Capital Investment Programme recommended to Cabinet is fully funded, so new disposals would be used to fund those projects set out in the Capital Investment Pipeline. The impact of receipts on the movement of projects from the Capital Investment Pipeline to the Capital Investment Programme would be articulated through the Finance Monitor, the July Finance Review and a new midcycle Budget Update report in November. 2.18 Recommendation P: all possible capital financing options have been considered 2.18.1 The budget report proposed to Cabinet includes revenue contributions to capital of £14.5 million over the three year budget period. Although the council has used the Private Finance Initiative as alternative financing solution, the main determinant of its viability is the availability of central government grant to pay the PFI contractor. The viability of Tax Increment Financing (TIF) will largely be determined by the potential of the investment to increase revenue from business rates. Its application to the maintenance of roads or the construction of schools, for instance, would be risky. Nevertheless, this is an area that will be monitored closely. 2.18.2 The commission also cited the New Local Government Network report Capital Momentum – new financing options for locally driven capital investment and the alternatives it sets out for capital financing, such as investment through pension funds or municipal bonds. Such approaches would generate the cash for investment through new debt instruments. The capital financing issue the council faces is not its ability to access debt instruments, but the declining revenue streams available to pay for those instruments. This criticism also applies to sale and lease back arrangements, whose use should be judged on broader value for money criteria rather than purely as a source of capital funding.
3. Comments from Executive Director of Finance and Resources 3.1 There are no direct financial implications arising from this report. However, a number of the proposals set out in the action plan will be captured in a revised Asset Management Strategy that will be submitted to Cabinet for consideration. 4. Comments from Director of Governance and Democracy 4.1 The Council has a fiduciary duty to the council tax payer to provide the management of its assets as efficiently and effectively as possible and to have in mind the best outcome for the Council’s area, in consideration of the Council’s wellbeing powers provided in section 2 of the Local Government Act 2000, including the use of or disposal of assets. 4.2 Section 111 of the Local Government Act 1972 provides powers for a local authority to do anything (whether or not involving the expenditure, borrowing or lending of money or the acquisition or disposal of any property or rights) which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions. 4.3 By virtue of section 123, Local Government Act 1972, the Council is empowered to dispose of land held by it in any manner it wishes but, except with the consent of the Secretary of State, it may not do for a consideration less than the best that can reasonably be obtained (unless the disposal consists of a grant of a term not exceeding seven years). A General Consent was issued in 2003 allowing the disposal of property at an undervalue (of not more than £2 million) if the disposal is likely to contribute to the promotion or improvement of the social, economic or environmental well-being of the residents or some of the residents of the borough. This General consent only applies to non HRA properties. 4.4 Section 21 of the Housing Act 1985 provides the Council with powers for the general management, regulation and control of its dwelling stock subject to Section 32 consent to dispose of land. 4.5 Pursuant to section 32 and 34 of the Act and Section 25 of the Housing Act 1988 the Secretary of State has issued general consents to dispose of land held for housing purposes which place conditions as to the terms of disposal. 5. Organisational implications 5.1 Risk management: The activities set out in the action plan may improve the council’s management of some of the risks associated with the disposal of surplus properties. 5.2 Equalities impact assessment: The activities set out in the action plan will be captured in specific proposals that will be considered by cabinet. Equalities impact assessments will be undertaken for those specific proposals.
Page 1 and 2: Cabinet 7 February 2011 Response to
Page 3 and 4: Response to the Asset Disposal Stra
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Asset Disposal Strategy Scrutiny Commission ... - Lambeth Council

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