Agenda item

The Lead Member for Resources, Mr L. Breckon CC, has been invited for this item.

The Commission considered a report of the Director of Corporate Resources the purpose of which was to set out the performance for the Investing in Leicestershire Programme in 2023/24.  A copy of the report marked agenda item 10 is filed with these minutes.

1. A Member commented that if not for the increase in value of the Council’s rural estate, the Programme showed an overall reduction of approximately £8m.  The Director emphasised that this was a long-term investment portfolio and all properties and other assets within this were subject to fluctuations in value over time.
   
   
2. A member challenged what appeared to be a 338% increase in the value of the Council’s rural estate.  The Director explained that this had resulted from a change in CIPFA guidelines and factors now required to be taken into account when carrying out such valuations.  Previously this had been based on the rental stream generated by a property.  Now, account had to be taken of the length of any farm tenancy and the capital value of the land once vacant position was received.  These and other such factors had significantly increased recent valuations for all local authorities holding such assets.  
   
   
3. Concerns were raised regarding past management of the Council’s rural estate and members sought reassurance that this was now being addressed. The Director confirmed that an action plan had been put in place and support provided by Savill’s, a leading land agent. Additional resources had also been allocated to support this work.
   
   
4. A Member questioned why such improvements had not been made sooner, particularly in light of the incident at Firs Farm previously reported to the Commission.  The Director reassured Members that the rural estate had always been managed but focus given to maximising capital returns from the estate and not to how it could contribute more widely.  It had been acknowledged, however, that a change in approach and improvement in management practices were now needed and this would include some ongoing external professional support.
   
   
5. A member commented that farms were usually passed down to family members and the introduction of the Council’s rural estate many years ago had been to help and support those that did not have those connections but wanted to get into farming.  This had served the Council and the local farming sector very well.  A member further commented that the Council had a responsibility to its farm tenants, and this included helping them address rent arrears.  Allowing these to accrue did not benefit the tenant or the Council.
   
   
6. The rural estate did not just generate an income but offered much more in achieving the Council’s wider priorities, for example, around delivery of net zero targets and improving biodiversity net gains.  A lot of work had been done to compare the Council’s approach with that of other local authorities and external support would continue to be employed to ensure improvements were being made in line with current best practice.
   
   
7. A member commented that the new Government’s approach to housing delivery had resulted in slippage in the delivery of many district council local plans, and in respect of the M69 Junction 2 Stoney Stanton development this had been the reason for the forecasted delay by Blaby District Council as referenced within the report.  It was acknowledged that the timetable included within the report was only an estimate and still needed to be agreed through the District Council’s governance processes.  The Director undertook to amend the report to ensure this adequately reflected the reasons for delay.
   
   
8. In response to questions raised, it was noted that the returns included within the report were all net of costs.  All property appraisals took account of initial and ongoing costs and market fluctuations when forecasting the returns expected from all direct and non-direct property investments within the Programme. 
   
   
9. A member suggested that it was not always clear how much the Council had invested into a project compared to the returns now being achieved, nor the time it took to see a return on the Council’s investment which was in some cases not expected for many years. 
   
   
10. A total commitment of £260m had been included within the Council’s MTFS and to date approximately £220m had been spent.  This left room for a further £40m of investment within the Programme. A member challenged if given current spending pressures faced by the Council this would be better invested elsewhere.  Particularly as some of the projects within the programme gave rise to commercial risk, returns being subject to external factors such as the grant of planning permission, the agreement of local plans, and negotiations with developers.
    
    

RESOLVED:

(a)      That the update provided be noted;

(b)      That a further report be provided at a future meeting regarding the County Council’s future strategy for managing its rural estate and clarifying why the Council held these assets and their benefits for the Council and wider Leicestershire.