Issue - meetings

To consider the attached report.

The Executive Board APPROVED the Financial Strategy of the City Deal Partnership.

The Executive Board considered a report which set out a proposed Financial Strategy for the City Deal partnership.

Chris Malyon, Chief Financial Officer at Cambridgeshire County Council, presented the report and highlighted the following proposals that would form the foundation to the City Deal partnership’s Financial Strategy:

·         the City Deal partnership would continue with operational and programme proposals;

·         the operational budget would be funded through New Homes Bonus and interest in balances;

·         the programme would be funded through the City Deal Grant, Section 106 Agreement funding and any other funding sources directly attributable to projects within the programme;

·         use of New Homes Bonus to fund transport infrastructure investments within the programme would need specific approval of the Executive Board;

·         the cost of providing support services, such as finance, democratic services and legal costs, would be resourced from the operational budget;

·         the local councils would retain all New Homes Bonus funds until they were required;

·         the accountable body would allocate interest on net cash balances to the operational budget;

·         any proposal for new investment would be supported with a robust business case proportionate to the size of investment required and set out how the proposal achieved the agreed aims of the City Deal.

Councillor Lewis Herbert, Chairman of the Executive Board, was keen that the City Deal managed the transport related aspects of the City Deal’s finances with other contributions such as Section 106 Agreement funding and other additional grant funding or external funding streams.  He was also keen to ensure that the New Homes Bonus element was managed transparently in view of it having to be accounted back to each partner Council as providers of that aspect of the City Deal’s budget.

Councillor Francis Burkitt highlighted a funding gap in the first tranche of the City Deal programme, consisting of approximately £20 million, but also referred to possible Section 106 Agreement contributions in the report of approximately £40 million for the first tranche of the scheme.  He made the point that if this Section 106 Agreement contribution was not received, there would actually be a £60 million funding gap in the tranche 1 programme.

Mr Malyon explained that the projections for the Section 106 Agreement contributions had been calculated based on assumptions and understandings of when developments were expected to occur.  He highlighted that there was a difference in funding of a programme compared to cash received and made the point that the report referred to the overall funding position.  Mr Malyon added that the Board may need to consider taking a decision to borrow against receipts in the future before Section 106 Agreement funding was physically received, which he said was normal practice for the County Council when developing transport schemes for example.

Councillor Burkitt asked when the Board would need to take a final decision regarding which underfunded aspect of its tranche 1 programme would need to be removed should additional funding streams not be identified, principally around the £20 million shortfall that was currently identified.  Mr  ...  view the full minutes text for item 12

To consider the attached report.

The Joint Assembly RECOMMENDED that the Executive Board approves the Financial Strategy of the City Deal Partnership.

The Joint Assembly considered a report which set out a proposed Financial Strategy for the City Deal partnership.

Chris Malyon, Chief Financial Officer at Cambridgeshire County Council, presented the report and highlighted the following proposals that would form the foundation to the City Deal partnership’s Financial Strategy:

·         the City Deal partnership would continue with operational and programme proposals;

·         the operational budget would be funded through New Homes Bonus and interest in balances;

·         the programme would be funded through the City Deal Grant, Section 106 Agreement funding and any other funding sources directly attributable to projects within the programme;

·         use of New Homes Bonus to fund transport infrastructure investments within the programme would need specific approval of the Executive Board;

·         the cost of providing support services, such as finance, democratic services and legal costs, would be resourced from the operational budget;

·         the local councils would retain all New Homes Bonus funds until they were required;

·         the accountable body would allocate interest on net cash balances to the operational budget;

·         any proposal for new investment would be supported with a robust business case proportionate to the size of investment required and set out how the proposal achieved the agreed aims of the City Deal.

Discussion ensued on Section 106 Agreement contributions, with existing contributions received to date by the County Council totalling £4 million for transport related schemes.  Councillor Bridget Smith referred to an assumption in Appendix A of the report that £20 million worth of Section 106 Agreement contributions for transport projects could be paid over the first tranche period based on new developments at Cambourne West and Bourn Airfield.  She felt that there was a small chance of Section 106 Agreement contributions being delivered as a result of these developments during the period of the first tranche.  It was noted that negotiations regarding Cambourne West were currently ongoing and that no application had been received in respect of a development at Bourn Airfield.  Ultimately, the planning authority’s Planning Committee would agree any balance of Section 106 Agreement funding assigned to infrastructure.

Mr Malyon accepted the point, but clarified that the figures set out in Appendix A did not set out the totality of the situation with regard to Section 106 Agreement funding and omitted to include the significant sums associated with other aspects of development such as schools.

Discussion ensued on the proposed devolution deal.  Mr Malyon made the point that an overarching Financial Strategy may include devolution funding alongside the City Deal, but this would solely be from an administrative and governance basis.  He emphasised that City Deal funding could only be used for City Deal activity and would be completely separate to funding received as part of any devolution agreement.

The Joint Assembly RECOMMENDED that the Executive Board approves the Financial Strategy of the City Deal Partnership.