To consider the submitted report on proposed changes to the Capital Investment Fund and any recommendations from the Mayor or Overview and Scrutiny Board.

Further to the decision of the Council on 25 February 2016, members considered the submitted report on a proposal to expand the investment fund, introduce criteria for the investments made by the fund and detailed the proposed governance arrangements around its management (including a supplementary report setting out the Overview and Scrutiny Board’s recommendations for the creation of an Investment Fund Committee).  The report also proposed investment to increase future National Non Domestic Rate revenues within Torbay. 

The Mayor proposed and Councillor Mills seconded a motion as set out below:

that the Council be recommended:

(i)         that the Investment Fund be increased by £40 million to a total of £50 million to be initially funded by prudential borrowing, with the revenue costs associated with that borrowing (MRP and interest costs) to be funded from the investment returns or higher NNDR income;

(ii)        that the Investment Strategy for the fund as detailed within Appendix 1 of the submitted report be approved;

(iii)       that, subject to the deletion of 7.4(a) so as to require all decisions on allocations from the Investment Fund to be approved by the Council, the governance of fund as detailed within paragraph 7.4 be approved; and

(iv)       that the Chief Executive be delegated authority to set up a delivery team including sourcing external support if required, to be funded from the investment returns.

During the debate Councillor Lewis proposed and Councillor Tyerman seconded an amendment to the motion as follows:

(ii)        that the Investment Strategy for the fund as detailed within Appendix 1 of the submitted report be approved and be included as part of the Council’s Policy Framework.

(iii)       that the governance arrangements of fund are the Overview and Scrutiny Board’s proposal as set out at Appendix 3 (of the submitted report), namely:

a)         That the Council appoints an Investment Committee, comprising of 6 members (politically balanced and to receive mandatory training, including any substitutes) and with terms of reference as follows:

1.    To review the Strategy and make recommendations to the Council for revision of the same.

2.    To determine any investment or purchase using the Investment Fund up to the value of £5 million, in accordance with the Investment Strategy.  All investments or purchases to be subject to a (documented) review by the s151 Officer, Monitoring Officer, Fund Manager and Executive Head of Business Services. 

3.    To receive performance reports on the Investment Fund on a quarterly basis.

b)         Where two or more members of the Committee vote against decisions of the Committee the matter shall stand referred to the Council for decision.  The quorum of the Committee will also be a minimum of four members in attendance (rather than three) to ensure the voting procedures meet the intended requirements.  The Monitoring Officer be requested to update the Standing Orders within the Constitution to reflect the voting provision and a quorum of four for this Committee.  This approach will provide the Council with confidence in respect of the Committee’s decision-making on major financial issues.

c)         Any investment decisions in excess of £5 million to be approved by the Council. 

The amendment was put to the vote and declared carried.

During the debate Councillor Darling (S) proposed and Councillor Sanders seconded a further amendment to the motion as follows:

(ii)        that the Investment Strategy for the fund as detailed within Appendix 1 of the submitted report be approved, subject to Strategy being amended to reflect that 100% of the investments from the Fund will remain within the Torbay travel to work area and be included as part of the Council’s Policy Framework.

The amendment was put to the vote and declared lost.

During the debate Councillor Parrott proposed and Councillor King seconded a further amendment to the motion as follows:

(iii)       a)        That the Council appoints an Investment Committee,

comprising the Mayor and/or the Executive Lead for Finance and of 6 members (politically balanced and to receive mandatory training, including any substitutes) and with terms of reference as follows:

The amendment was put to the vote and declared lost.

The amended (substantive) motion was then considered by members, which was agreed by the Council as follows:

(i)         that the Investment Fund be increased by £40 million to a total of £50 million to be initially funded by prudential borrowing, with the revenue costs associated with that borrowing (MRP and interest costs) to be funded from the investment returns or higher NNDR income;

(ii)        that the Investment Strategy for the fund as detailed within Appendix 1 of the submitted report be approved and be included as part of the Council’s Policy Framework.

(iii)       that the governance arrangements of fund are the Overview and Scrutiny Board’s proposal as set out at Appendix 3 (of the submitted report), namely:

a)         That the Council appoints an Investment Committee, comprising of 6 members (politically balanced and to receive mandatory training, including any substitutes) and with terms of reference as follows:

1.    To review the Strategy and make recommendations to the Council for revision of the same.

2.    To determine any investment or purchase using the Investment Fund up to the value of £5 million, in accordance with the Investment Strategy.  All investments or purchases to be subject to a (documented) review by the s151 Officer, Monitoring Officer, Fund Manager and Executive Head of Business Services. 

3.    To receive performance reports on the Investment Fund on a quarterly basis.

b)        Where two or more members of the Committee vote against decisions of the Committee the matter shall stand referred to the Council for decision.  The quorum of the Committee will also be a minimum of four members in attendance (rather than three) to ensure the voting procedures meet the intended requirements.  The Monitoring Officer be requested to update the Standing Orders within the Constitution to reflect the voting provision and a quorum of four for this Committee.  This approach will provide the Council with confidence in respect of the Committee’s decision-making on major financial issues.

c)         Any investment decisions in excess of £5 million to be approved by the Council. 

(iv)      that the Chief Executive be delegated authority to set up a delivery team including sourcing external support if required, to be funded from the investment returns.