Councillors and committees

Agenda, decisions and minutes

You can view the individual reports for this meeting by selecting the headings from the numbered list of items at the bottom of this page. Alternatively you can view the entire agenda by selecting 'Agenda Reports Pack' below.

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Contact: Gary Marson, Democratic Services Team Leader  Tel: 0208 547 5021/email  gary.marson@kingston.gov.uk

Items
No. Item

1.

Public Questions

A period of up to 30 minutes for public questions on matters relevant to the Committee’s remit which are not related to items featured on the agenda. Advance notice of the questions is preferred but not essential.

Minutes:

Questions were received from residents regarding the identity of organisations considered as part of the consultation on the award of a contract for the management of community halls in Norbiton and the length of the consultation, and the progression with the development of Eden Walk. Written replies would be provided in both instances.

2.

Apologies for Absence and Attendance of Substitute Members

Minutes:

Councillor Kim Bailey attended as a substitute for Councillor Mark Durrant and apologies were received from Councillor Christine Stuart.

3.

Declarations of Interest

Members are invited to declare any disclosable pecuniary interests and any other non pecuniary interests (personal interests) relevant to items on the agenda.

Minutes:

Councillor Liz Green declared a Personal Interest in the item concerning the Revenue and Capital Budget Outturn because her daughter attended Coombe Girls School which was due to receive a capital allocation for provision of a specialist resource for students with hearing impairments. As the item was not a Disclosable Pecuniary Interest Councillor Green remained in the room and participated in the debate and voting on the item.

4.

Minutes

To confirm and sign the minutes of the meetings held on 18th March and 4th April 2019.

Minutes:

The minutes of the meetings held on 18th March and 4th April 2019 were confirmed and signed as a correct record.

 

Voting:

 

For Councillors: Green, Holt, Bailey, Bass, Beynon, Davis, Ha and Sweeney (8)

Against: None

Abstentions: Councillor Falchikov-Sumner (1)

5.

Revenue and Capital Budget Outturn 2018-19 pdf icon PDF 284 KB

To report the revenue and capital outturn positions for 2018/19 including the position on the Schools budget and earmarked reserves.

Additional documents:

Decision:

Resolved that –

 

1. the general fund outturn position for 2018/19 of an overspend of £0.459 million (0.35% of budget) be noted;

2. the general fund (GF) balance at 31 March 2019 of £12.633 million and the position on earmarked reserves of £16.186 million as at 31 March 2019 be noted;

3. the surplus of £3.507 million on the collection fund, of which £0.583 million is the Council’s share, be noted;

4. the 2018/19 outturn position of an underspend of £1.300 million on the Housing Revenue Account (HRA) be noted;

5. the outturn position in respect of the 2018/19 Schools Budget overspend of

£0.381million be noted;

6. the capital outturn position for 2018/19 of an underspend of £13.559 million (24.7%) be noted;

7. the slippage requests as set out in Annex 1 to the agenda be approved.

8. the recommendation in paragraph 64 of the agenda report for the allocation of £462k basic need grant and £760k Special Provision Capital Fund for the proposed expansion project at Coombe Girls’ School be approved

 

Minutes:

The Committee received details of the revenue and capital budget outturn positions for 2018/19 including the schools budget and earmarked reserves.

 

Members noted that the General Fund revenue account was overspent by £459,000 (0.35%) against a budget of £130.498m. This represented a significant improvement on the £1.163m overspend which had been forecast in February. The main factors in the outturn position had been:

 

·         Additional income of £1.484m from the Business Rates retention pooling pilot

·         A shortfall in income in relation to new investment in commercial property which had not yet proceeded, though the correspondingly smaller than anticipated associated growth in capital financing reduced the impact of the lost income to £1.5m

·         Delays in delivering expected savings from Commissioning and Contract Management (£1.75m) though these had been offset by one off savings from contracts in-year

·         Ongoing pressures in relation to Unaccompanied Asylum Seeking Children and Special Educational Needs Transport within the Achieving for Children budget. The total Childrens Services overspend amounted to £1.675m

 

Despite the overspend on the revenue position the General Fund Balance had increased to £12.633m due to a budgeted contribution of £3.473m. £2m was transferred from the General Fund to an earmarked reserve for Education and Childrens Services. Total earmarked reserves, net of the Dedicated Schools Grant deficit, stood at £16.186m. In addition the Council planned a contribution of £3.5m to the General Fund reserve in 2019/20.

 

It was reported that the Housing Revenue Account (HRA) had an underspend of £1.3m which would be transferred to the HRA balance to mitigate risks in future years. The final outturn position on the Dedicated Schools Grant was an overspend of £381,000 – a reduction of £796,000 from Month 9 monitoring.

 

There was a net Capital underspend of £13.559m made up of underspends of £546,000 on the HRA and £13.013m on the General Fund. The overall position included scheme overspends of £3.659m. These could be grouped into two main areas:

 

·         Overspends that could be recouped from the 2019/20 capital budgets, totalling £3.274m. The major overspend was £1.767m on the purchase of HRA properties partially funded through the use of 1-4-1 right to buy receipts; and

·         Overspends where there was no budget in 2019/20 meaning that funding would have to be sourced from elsewhere. This amounted to £385,000. It was proposed that these be met from 2018/19 underspends in Property (£80,000) and ICT (£305,000).

 

Members approved a series of budget adjustments which brought underspent capital funds into allocations for 2019/20 where it was necessary to do so. The process of moving unspent budgets into future years was normal to ensure that there was sufficient budget available to fund agreed capital schemes.

 

The Committee noted that the schools capital programme included £1m which was yet to be allocated to individual schools expansion projects. It was agreed to allocate £462,000 of this sum to the provision of a specialist resource for students with hearing impairment and other communication difficulties at Coombe Girls School. The balance of the £1.222m project costs were to be met  ...  view the full minutes text for item 5.

Recorded Vote
TitleTypeRecorded Vote textResult
Revenue and Capital Monitoring Outturn 2018-19 Resolution Carried
  • View Recorded Vote for this item
  • 6.

    Affordable Housing Programme - Associated Sites pdf icon PDF 137 KB

    This report recommends a variation to the appointment of Countryside Properties (UK) Ltd to include delivery of the Affordable Housing Programme Phase 1 - Associated Sites. 

    Decision:

    Resolved that –

     

    1. Countryside Properties (UK) Ltd be appointed to deliver new homes on infill decant sites associated with the Cambridge Road Estate with the appointment to be made as a contract modification to the Countryside Contract Award;

    2. the Completion Agreement with Countryside Properties (UK) Ltd be amended to include for additional development management services worth up to £40 million over a period of 5 years (being approximately 5% of increase on the original contract value); and

    3. the Council declares this intention by issuing a Voluntary Transparency Notice

    Minutes:

    The Committee gave consideration to a variation to the contract awarded to Countryside Properties (UK) Ltd for redevelopment of the Cambridge Road estate in order to also include within it delivery of up to 160 additional affordable homes on a variety of Council owned sites.

     

    Members noted that the affordable housing programme would make best use of under utilised land to help the Council provide more truly affordable high quality homes within the Borough and meet the requirement to accelerate delivery of new housing to make up for shortfalls in housing supply measured against local need. Homes constructed in the programme would be used in the first instance to provide decant accommodation to residents affected by the proposed first phase of the Cambridge Road estate project. A total of £26.4m had been allocated to the project over the period to 2023, including a grant of £9.5m from the GLA’s ‘Building Council Homes for Londoners’ fund. It was anticipated this would be sufficient for delivery of 100 of the projected new homes.

     

    A single experienced lead consultant would be appointed to act as the Council’s multi-disciplinary delivery partner responsible for all project management, planning and design work. Having a single point of contact would reduce risk to the Council. The appointment of Countryside Properties to this role would utilise the existing procurement in respect of the Cambridge Road Estate which was subject to a rigorous tender evaluation process. It was noted that Countryside had a shared incentive to deliver the programme within the required timescale, was familiar with this enabling approach and had completed similar smaller developments at early stages of other regeneration programmes.

     

    In response to questions from Members and members of the public it was noted that the Council as freeholder would retain responsibility for management of the new properties. The situation was therefore not comparable with circumstances elsewhere in the country where issues had arisen regarding the ground rent levied by developers. It was emphasised that due diligence had been undertaken on Countryside and full legal advice obtained in respect of the procurement route. These were the first new Council homes to be built in the Borough for 25 years and the Council did not possess the skills to deliver the project with in house resources only. In the event of the Cambridge Road Estate redevelopment not proceeding the arrangement with Countryside could be ended if the Council felt it would be appropriate at that stage to procure a new delivery partner.

     

    Decisions concerning the submission of planning applications for individual proposed sites would be reviewed by the Strategic Housing and Planning Committee following early design and consultation work.

     

    Resolved that –

     

    1. Countryside Properties (UK) Ltd be appointed to deliver new homes on infill decant sites associated with the Cambridge Road Estate with the appointment to be made as a contract modification to the Countryside Contract Award;

    2. the Completion Agreement with Countryside Properties (UK) Ltd be amended to include for additional development management services worth up  ...  view the full minutes text for item 6.

    Recorded Vote
    TitleTypeRecorded Vote textResult
    Affordable Housing Programme - Associated Sites Resolution Carried
  • View Recorded Vote for this item
  • 7.

    The Exchange Workspace pdf icon PDF 694 KB

    To seek to procure a workspace operator and complete relevant administration thereof on leasing arrangements.

    Additional documents:

    Decision:

    Resolved that –

     

    1. the Open Procedure under the Concession Contracts Regulations 2016 (CCR16) be utilised to secure a suitable provider for management and operations of the Exchange Workspace and other workspaces opportunities in the borough as they arise;

    2. the Director of Growth be given delegated authority, in consultation with the Portfolio Holder for Finance and Contracts and the Portfolio Holder for Planning Policy and Economic Development, to sign a 25 year head lease (with a break clause at 15 years) between the Council and St George plc for the former Telephone Exchange;

    3. the Director of Growth be given delegated authority, in consultation with the Portfolio Holder for Finance and Contracts and the Portfolio Holder for Planning Policy and Economic Development, to grant a 15 year minimum sublease to the preferred workspace operator;

    4. the Director of Growth be given delegated authority, in consultation with the Portfolio Holder for Finance and Contracts and the Portfolio Holder for Planning Policy and Economic Development, to enter into a 15 year concessions/ management contract between the operator and the Council to define the terms of the management and operations of the Exchange Workspace and other workspaces opportunities in the borough as they arise

    5. the New Homes Bonus grant monies totalling £789,000 be allocated and expended on the Exchange Workspace project for capital fit out and revenue support subject to successfully procuring a workspace operator.

    Minutes:

    The Committee gave consideration to the provision of 8,400 square feet of affordable and flexible workspace at the Grade 2 Listed former Telephone Exchange on Ashdown Road in order to help support economic development in Kingston Town Centre.

     

    In welcoming the proposal Members noted that anticipated benefits of the initiative included the:

     

    ·         delivery of new high quality flexible and affordable workspace to support entrepreneurs and local business

    ·         creation of a new locus for wider borough business support programmes

    ·         promotion of a higher level of economic activity in the town centre

    ·         provision of new businesses support hub

    ·         creation of net additional jobs

    ·         growth of the GVA of the Kingston economy

    ·         contribution to higher business rates and talent retention

    ·         reduction of outward commuting for work and promotion of a work near home culture

    ·         the activation and regeneration of a major new development site in the Eden Quarter area of the town

     

    Having noted the details of the proposed terms agreed in principle with the owner, St George PLC, (contained in exempt material) the Committee approved the Council entering into a 25 year head lease with a 15 year break clause in order to rent the building.

     

    Authority was also given for a professional and experienced workspace operator to be selected through an Open Procedure under the Concessions Contracts Regulations 2016 and subsequently offered a 15 year sub lease. The Council would enter into a concessions/management contract with the selected operator which would allow the option to include other unspecified sites in the town centre and wider borough. The operator would be required to satisfy the Council’s requirements for each individual site at the appropriate time on the basis of first option refusal with neither party being under any obligation to reach agreement. By this means the Council would be able to apply a flexible and practical strategic programme approach in sustainable partnership with the operator over an extended period across multiple sites to the benefit of local residents and businesses.

     

    The concessions contract would include up to £789,000 New Homes Bonus awarded as a grant by the Greater London Authority as a capital and revenue contribution together with £62,000 of S106 monies to the operator as an incentive to deliver social-economic outcomes as part of the project. The project would be of minimal cost to the Council and early financial modelling cautiously suggested a modest income stream based on current markets. This would offset the ongoing consultancy advice and contract monitoring costs that would be incurred by the Council.

     

    The Committee indicated its support for the waiver of the Call-In procedure on grounds of urgency in accordance with Part 2(a) of Part 4C of the Council’s Constitution. It was noted that in the event of the waiver being approved by the Chief Executive the decision would not be eligible for call-in.

     

     

    Resolved that –

     

    1. the Open Procedure under the Concession Contracts Regulations 2016 (CCR16) be utilised to secure a suitable provider for management and operations of the Exchange Workspace and other  ...  view the full minutes text for item 7.

    Recorded Vote
    TitleTypeRecorded Vote textResult
    The Exchange Workspace Resolution Carried
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  • 8.

    Establishment of Property Interest Company pdf icon PDF 246 KB

    The purpose of this report is to seek approval from Members to establish a company structure, wholly owned by the Royal Borough of Kingston upon Thames, which will include a holding company and an investment company.

    Additional documents:

    Decision:

    Resolved to Recommend to Council

     

    1. the establishment of an incorporated company structure which includes a

    company for the purpose of investment in commercial property, the incorporated structure to be made up of:

    ?          a holding company

    ?          a wholly owned investment company (‘Invest Co’) with the Council holding the company for investment purposes];

    2. the ‘Invest Co’ Confidential Business Case at Exempt Annex 1 to the agenda;

    3. the process to select directors of the Holding Company and directors of ‘Invest Co’ as set out in the timescale and directors appointment section (ref.

    Paragraphs 76 - 79) of this report;

    4. the establishment of the Shareholders Committee as described in the

    Governance section of this report (ref. Paragraphs 63 - 69);

    5. the revised 2019/20 Investment Strategy and Minimum Revenue Provision

    (MRP) Policy at Annex 2 to the agenda;

    6. that authority be delegated to the Director of Growth, in consultation with the Leader of the Council and Leader of the Opposition, with Trowers and Hamlins LLP to conclude the necessary legal documentation to appoint Board Members to the holding company and ‘Invest Co’ following the process set out in the Timescale and directors appointment section (ref. Paragraphs 76 - 79).

    7. that those individual Members or officers who are appointed by the Council to act as directors of these companies are indemnified against potential personal (non-fraudulent) liability, provided such directors have attended training on their legal responsibilities as directors.

    Minutes:

    The Committee gave consideration to proposals to establish an investment company for the purpose of investing in commercial property in order to generate income returns. It received a report setting out the financial and policy context, the options considered, the recommended structure of the proposed company, the governance framework, taxation and state aid issues and legal advice.

     

    Members noted that the Council no longer received revenue support grant from the Government and needed to find it’s funding for essential services from maximising collection of the Council Tax, Business rates and other income and by adopting a more commercial approach to service delivery and asset management.

     

    The Council already had approximately 150 commercial assets let to third parties from which it derived gross income of approximately £5.4m pa. However, this presented a number of risks including the derivation of 65% of income from two assets, the location of all of the assets within the same geographical area and the absence of a balance across a range of sectors and classes.

     

    It was therefore intended to establish an incorporated company structure wholly owned by the Council. This would include a Holding Company and a Capital Investment Fund Special Purchase Vehicle (‘Invest Co’). ‘Invest Co’ would concentrate its efforts on direct commercial property investment by acquiring buildings on the open market for immediate revenue returns. The ‘profit for purpose’ generated from ‘Invest Co’ would be reinvested in capital projects as outlined in the Council’s investment policy. The purpose of the Holding Company would be to review and approve the business plans prepared by the companies’ boards of directors, ensure regular review of the plan and monitor key performance targets and milestones.

     

    The objectives of this approach would be to:

     

    ·         Make intelligent investment decisions and expertly manage a new fund to ensure income returns were sustainable over the long term

    ·         Reduce the geographical risk in property holdings by expanding ownership of new property into the South east of England geographical area

    ·         Make a significant revenue contribution into the medium and long term towards the Council’s wider regeneration activities.

     

    An Elected Member Shareholder Committee with specific responsibility for oversight of the new structure would also be set up in order to give all Members and residents assurance that the Council, in its capacity as shareholder, was monitoring the performance of the companies and maximising shareholder value in accordance with the Council’s fiduciary duty to obtain Value for Money. Meetings of the Shareholder Committee would be held in public except where exempt information was due to be discussed, consistent with normal practice for all Committees of the Council.

    The Committee was informed that the recommended structure was resilient, the best means of managing risk and sufficiently flexible to accommodate change by, for example enabling the Council to establish other trading companies which could sit within it. A number of other local authorities had established similar arrangements and legal advice confirmed that the proposals were fully within the Council’s powers.

     

    Members noted that applications for appointment to  ...  view the full minutes text for item 8.

    Recorded Vote
    TitleTypeRecorded Vote textResult
    Establishment of Property Interest Company Resolution Carried
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  • 9.

    Urgent Items Authorised by the Chairman

    To consider any items which, in the view of the Chair, should be dealt with as a matter of urgency because of special circumstance in accordance with S100B(4) of the Local Government Act 1972

    Minutes:

    There were no urgent items.