Agenda item

The Council considered a report proposing a change to the Council’s Prudential Indicators to permit further borrowing to allow investment in property in furtherance of the Council’s Key Priority 2.  The increase in Prudential Indicators did not commit the Council to borrow as this would be a decision based on a business case showing the financial return.  It would also be necessary to increase the Capital Programme for 2016/17.

Members were advised that when entering into borrowing the Council must be confident not only that the interest could be serviced but also that the debt could be repaid through the mechanism of a Minimum Revenue Payment.  This risk was minimised by only investing in assets which complied with the Property Acquisition Strategy and by borrowing on a fixed basis for the longest possible period. The Council was working with its financial advisors on its borrowing strategy in order to increase returns whilst reducing risk.

RESOLVED that

(i)              the setting of the level of External Debts and the Prudential Indicators be approved as set out in Annex A; and

(ii)            the Capital Programme for 2016/17 be increased by £36 million for property investment in accordance with the Property Acquisition Strategy.