Decision details

(i)  Re-affirms the commitment to a property investment fund as a part of the strategy for addressing future budget shortfall.

(ii)  Agrees the approach as outlined in this report and the investment criteria attached to this report.

(iii)  Agrees to delegate to the Service Director – Strategic Finance and Commercialisation, in consultation with the Cabinet Member for Resources, the ability to amend the property investment strategy prior to making the first additional purchase into the Fund.

(iv)  Notes the addition and spend of £200M.  It is proposed to include this sum in the 2019/20 capital programme.  Whilst it will be included in full, in practice it is likely there will be a need to spread such an investment beyond the current year.  This will be funded by Council resources.

To allow the council to expand its property investment portfolio acquisitions to date. This in turn will make the council more financially resilient at a time of significant demand pressures faced by many front line services and when core funding from Government has been reduced significantly.

Not to invest in commercial property for a return above cost would mean additional revenue to help with the budget shortfall the authority faces would not be available.  The budget gap for 2020/21 as outlined in the Medium Term Financial Strategy report to Council in February 2019 was £9.5M.  The absence of increasing the yield from additional commercial property investment would mean other savings being required which could include budget cuts.