Agenda item

(a)  That it be agreed that whilst strategic acquisitions would normally be made within the Borough of Slough, to reduce risk, maximise financial returns and widen the potential to create a more balanced portfolio is achieved by buying investments outside Slough.

(b)  That the scoring criteria associated with out-of-borough investment assets be amended as set out in the report.

(c)  That the Capital Programme for 2016/17 be amended to increase the existing budget by an additional £25m.

The Commissioner for Housing & Urban Renewal introduced a report that sought approval to recommend to full Council an additional £25m from the capital programme to the strategic acquisition fund to secure land and/or investment assets that improved the Council’s financial resilience and brought forward sites to contribute to the regeneration of the borough.  It was also proposed to amend the scoring criteria associated with out-of-borough investment assets.

The Strategic Acquisitions Strategy had been agreed in September 2015 with an initial capital budget of £25m.  A total of £13.6m had been spent generating additional gross income of £596,775 for 2016/17.  A further £9.2m had been set aside for anticipated pipeline acquisitions in the current financial year leaving a balance of £2.2m.  It was therefore proposed that a further £25m be added to the fund to build the portfolio and secure further revenue for the Council.  Acquisitions were normally made within the borough, however, there was some flexibility to purchase out-of-borough investment assets to create a balanced portfolio and maximise financial returns.  Under the current scoring criteria for proposed acquisitions, the minimum score would normally be 240 out of 400 (60%).  It was proposed that out-of-borough acquisitions should score a minimum of 300 out of 400 (75%).

Speaking under Rule 30, Councillors Swindlehurst and Anderson asked about the slowdown in recent months in securing assets in the pipeline and about the risk of rising borrowing costs post-Brexit.  It was responded that there had been a market slowdown after Brexit but activity was picking up and a number of acquisitions were moving forward.  Each acquisition had a robust business case and a long term view was taken before any asset was purchased.

At the conclusion of the discussion, the Cabinet agreed to recommend to full Council on 29^th November that an additional £25m of capital be made available to the fund and that the scoring criteria be amended as set out in paragraphs 5.13 to 5.15 of the report.

Recommended –

(a)  That it be agreed that whilst strategic acquisitions would normally be made within the Borough of Slough, to reduce risk, maximise financial returns and widen the potential to create a more balanced portfolio is achieved by buying investments outside Slough.

(b)  That the scoring criteria associated with out-of-borough investment assets be amended as set out in the report.

(c)  That the Capital Programme for 2016/17 be amended to increase the existing budget by an additional £25m.