(a)          Amendments to the Hackney Carriage and Private Hire Policy following consultation

Councillor Fleming proposed and Councillor Mrs Morris seconded, the recommendations from the Licensing Committee which sought approval of amendments to the Hackney Carriage and Private Hire Policy.

Councillor Mrs Morris wished to record her thanks to Officers and Members for all their work at Committee and hearings for the past four years.

Resolved:  That the draft amended Hackney Carriage and Private Hire policy be approved.

(b)         Monitoring Officer’s Annual Report

Councillor Fleming proposed and Councillor Ball seconded, the recommendations from the Standards Committee.

Resolved: That the report be noted.

(c)          Amendments to the Constitution: Licensing Sub-Committee Hearing Procedures

Councillor Fleming proposed and Councillor Pett seconded, the recommendations from the Governance Committee.

Resolved:  That

a)   ‘Part 8 – Licensing Committee’ of the Council’s Constitution be amended as set out in Appendix A to the report; and

b)   delegated authority be granted to the Head of Legal & Democratic Services, to draft further amendments to Part 8 of the Council’s Constitution to include hearing procedures under the Gambling Act 2005 and the Town Police Clauses Act 1847, Public Health Act 1875 and Local Government (Miscellaneous Provisions) Act 1976, for consideration at Council on 30 April 2019 after consultation with the Chairman of Governance.

(d)         Member Working Group – Income Strip Funding

Councillor Fleming proposed and Councillor Scholey seconded, the recommendations from the Member Working Group – Income Strip Funding (ISF) with additional wording on recommendation (c) adding the words ‘including those in the Property Investment Strategy’ at the end.

Councillor Fleming expressed his thanks to the Working Group, and officers, stating that it was one of the great strengths of the Council that it was fortunate enough to have highly skilled Members who could look and understand a system that was at the cutting edge of funding for Local Authorities.

Councillor Scholey stated that Income strip funding arrangements were relatively complex arrangements and he also wished to thank the members of the working group for their diligence and expertise in working through the details of the advice received from professional advisors.

He explained that in essence income strip funding arrangements were designed so that a pension fund or insurance company could lend money to organisations with implied government backing to purchase property in a manner where the funder has no risks or responsibilities related to the property. They were for periods of 30 to 50 years and the financial return to the funder increased in line with an agreed measure of inflation, typically RPI.  In return for the security of government backing, inflation protection and lack of other responsibilities the funders could offer to provide money at a low rate of return.  This could be a very useful source of funding for schemes where, for example, education and local authorities were confident the income generated from the property will reliably increase at a rate sufficient to pay the funder. 

Examples of uses of income strips were funding of college halls of residence and regeneration schemes within a local authority area.  Reef offered the Council an opportunity to use the income strip concept in a novel way. They proposed to use the funding mechanism as a purely property investment vehicle to purchase and manage an aparthotel in Aldgate, close to the City of London. Initial examination of the proposal indicated it could generate a valuable income stream for the council with the option to buy the property for £1 in 50 years. However, the devil of all schemes lay in the detail.

At its meeting in May 2018 Council requested that a working group be set up to look at the commercial and legal details of the proposal and to report back.  A summary of the investigations undertaken was included with the agenda papers and all members were invited to review and discuss the details with members of the working group on 29 January 2019.  The working group now felt in a position to make the following recommendations to Council: The working group viewed ISF as a sound financial mechanism which the council could use in the right circumstances to fund income generating developments within its own area, preferably developments involving regeneration; Members and officers of the council now had a sound understanding of the legal and commercial strengths and weaknesses of ISF and were in a position to construct a scheme when a suitable opportunity arose;  ISF was not a mechanism the council should use for property investment outside the district boundary, and in particular should not proceed with the Reef proposal.

In response to a question, Members were advised that the working group was a working group of Council and therefore only reported to Council, and the working group had invited all members to attend one of their meetings on 29 January 2019.

Resolved:  That

a)     the report from the Member Working Group be noted;

b)     an aparthotel at 21 Commercial Road, Aldgate not be acquired using an income strip funding deal; and

c)   Income strip funding be included as a possible funding method for future property schemes including those in the Property Investment Strategy.