Agenda item

The Chair of the Policy & Finance Committee, Councillor Lury, will present any recommendations  from the meeting of the Policy & Finance Committee held on 24 October 2024.

The minutes from this meeting to include any recommendations to Council wil be circulated separately to this agenda.

The Leader of the Council and Chair of the Policy & Finance Committee, Councillor Lury, presented recommendations from the meeting of the Policy & Finance Committee held on 24 October 2024, which had been circulated separately to the agenda as a supplement pack and uploaded to the Council’s web site on 31 October 2024.

Councillor Lury drew Members’ attention to the first set of recommendations at Minute 230 [Environment Committee – 19 March 2024 – Minute 720 Combined Cleansing Services Contract] which he formally proposed.  The recommendations were then seconded by Councillor Stanley, in the absence of the Vice-Chair of the Committee, Councillor Nash.

In discussing the recommendations, a question was asked as to whether the Council should stall approving adding the £1.82m to the Capital Programme until such a time that the Council received the grant funding from DEFRA. The Chief Executive responded providing reassurance that the Council would receive the amounts set out in both recommendations back from DEFRA, however, to purchase the food waste receptacles, the amounts needed to be included within the Council’s capital programme.

This response was queried, as this was new news to Councillors, and it was confirmed that the amount that the Council could receive back from DEFRA would be to cover the £1.82m in recommendation (1), it would not include the £1.2m referred to in the second recommendation. This would be funded from borrowing if the Council was unable to secure further funding.

Varying concerns were expressed by Councillors over borrowing and the provision of a bin to all residents, as many would already have them. It was confirmed that at the meeting of the Environment Committee in March 2024, and at the briefing held for Members in advance of that meeting, an opt-out scheme could be offered. Reassurance was sought that an opt-out clause would be in place. The Group Head of Finance and Section 151 Officer highlighted that in terms of the £1.2m that would be funded from borrowing, the expectation was that the contract specification had been written to minimise budgetary risk and the savings achieved by the new contract should ensure that the new contract would be cost neutral. The food waste collections would achieve cost savings, and funding would be received from DEFRA.

Discussion returned to the provision of an opt-out clause and that if this was rolled out money could be saved if there was not the need to provide new bins to everyone.  Councillor Lury reminded Councillors that the recommendations before them were to approve adding amounts to the Council’s Capital Programme in 2025/26, the decisions relating to the Combined Cleansing Services Contract and the detail of the new contract had already been made by the Environment Committee. The Chief Executive reinforced this message confirming that the new contract’s specification had been set to meet the requirements of new legislation which was the Environment Act 2021. The size of the bin to be provided had been based upon being able to facilitate a fortnightly residual collection service and had been based upon recycling targets. She confirmed that all HMOs and flats would have bespoke needs which would be assessed. These and some properties in Arundel would have options allowing them to opt out . This had been discussed in depth at the meeting of the Environment Committee in March 2024.

Councillors asked for complete clarity as to whether an opt-out clause would be added as this was a commitment that had been given. Having had further questions raised over the provision of 180 litre bins, the Chair of the Environment Committee, Councillor Wallsgrove provided some clarity. She confirmed the reasoning behind the Committee’s decision to opt for 180 litre bins and that the Committee had received assurance that an opt-out clause would be provided.

Following further discussion,

          The Council

                     RESOLVED – That

(1)  It approves the addition of £1,820,000 to the Capital Programme in 2025/26 to fund the purchasing and delivery of food waste receptacles and purchasing of vehicles necessary to provide the weekly food waste collection service as part of the CCSC to be funded by a grant received from DEFRA; and

(2)  It approves the addition of £1.2 million to the Capital Programme in 2025/26 to procure and roll out 180 litre residual bins for residents to facilitate a fortnightly residual collection service. This will be funded from borrowing if the Council is unable to secure further funding.

          Councillor Lury then alerted Members to the next recommendations at Minute 239 [The Regeneration of the Alexandra Theatre, Bognor Regis – Progress Report] which he formally proposed.  The recommendations were then seconded by Councillor Stanley.

          The Chair invited debate which saw varying Councillors raising concerns. Although Councillors were keen to see the project delivered, it could not be ignored that this was another project that was running late in terms of its delivery and would be significantly over budget and not for the first time either. If Council chose to approve the additional £3m spend, and the Council spent the full £2m contingency this equated to a project spend of £18.8m. In the absence of any alternative options clarifying how the project could be brought back to within its budget coupled with concerns over financing the additional costs, this was difficult to support and would subject the Council to a lifetime of borrowing.

Questions were asked as to how and why the project had exceeded its original budget. The financial challenges associated with delivering the project were explained with Members being reminded that the economy had weathered major challenges which had massively impacted capital projects. A request was made to continue to liaise with specialists in the theatre industry field to ensure that the project could be completed. 

Although Members expressed disappointment at the decisions that were needing to be made, there were comments made that the project must proceed. Concerns were also raised in terms of having a professional team in place who would know how to promote the theatre and attract visitors.

Although the financial pressures were of concern, many Councillors confirmed that they were happy to support the theatre and its ability to deliver something uniquely special for Bognor Regis and the wider area. Mention was made again to the substantial rises in the cost of construction materials which could increase further and before any work commenced on site. It was felt that the variation in costs must be reviewed as the Council could not continue to use its finances in this way. A review in terms of what the other options and opportunities were should be undertaken as the Council had a duty to reassure its residents that it was fiscally responsible in terms of all that it did.  There was some anxiety expressed about spending further money when there could be no guarantee that further funding might be needed further down the line.  The Chief Executive explained that the project had received significant Government funding and that there was a window of opportunity to spend that money. The Council had already drawn money down from the LUF funding received.  In view of spending timescales, the project could not afford any further delay without risking losing the funding and needing to borrow more money. Significant value engineering had been undertaken to bring costs down resulting in limited alternatives for the Council without changing the project significantly resulting in the Council then not meeting the objectives laid down in LUF funding agreement.

The Group Head of Finance and Section 151 Officer provided information around the project totals and the cost of borrowing if the remaining amount was to be funded in this way over a period of 50 years and if the full amount was borrowed. He stated that it would be unlikely that the Council would seek to borrow the full amount as it used its reserves and cashflow balances to fund expenditure until there was a need to use those monies for their designated purposes. The Council’s robust treasury management practices and policies were also referred to and he urged Members to familiarise themselves with the regular Treasury Management reports provided to the Audit & Governance Committee confirming the Council’s borrowing position and as this would provide assurance that all practices were underpinned by code of practice requirements and local government finance statutes.

Further concerns were aired over value engineering being applied to the project and whether the same results and outcomes would be achieved using this method. Equally, the Council had to assess the costs of not approving the additional funding required in terms of paying back LUF money to Government and the cost of returning the theatre back to an operational state. In terms of the debate on borrowing, it was acknowledged that interest rates were likely to reduce further, but there was also risk that rates could increase in response to global events. Councillors were torn in terms of wanting to the project to proceed versus the financial responsibility of doing so.

Councillor Stanley, as seconder to the recommendations spoke. He reconfirmed the advice provided by the Group Head of Finance and Section 151 Officer in terms of addressing concerns and nervousness over borrowing. He stated that robust measures were in place in terms of spending the additional £3m out of which £2m of contingency would only be used to fund contingency related costs and not increases in the scope of the project.   Time constraints were in place in respect of spending the £12m of LUF funding. Councillor Stanley felt that the question was simple, did Councillors want a theatre in Bognor Regis or not? He focused on how wonderful it would be to have a high tech theatre on the seafront that would benefit the entire district. The concerns over project delays had been well debated with many of these being national and global issues not relative to just Arun. He urged Members to approve the recommendations.

Councillor Lury, as the proposer of the recommendations, reinforced what he had said at the meeting of the Policy & Finance Committee in that the  people of Bognor Regis would not thank the Council if it chose to abandon the project. He accepted that this was a difficult decision for Members to make and he reminded them of the national circumstances that had developed leading to the situation the Council now found itself in.

A recorded vote had been requested.  Those voting for the recommendations were Councillors Ayling, Batley, Bence, Bicknell, Birch, Mrs Bower, Bower, Brooks, Butcher, Edwards, Goodheart, Greenway, Harty, Haywood, Huntley, Jones, Lawrence, Long, Lury, Madeley, May, McDougall, Needs, Northeast, O’Neill, Oppler, Partridge, Patel, Penycate, Stainton, Stanley, Tandy, turner, Wallsgrove, Walsh, Warr, Wiltshire, Woodman, Mrs Worne, Miss Worne and Yeates [41]. Councillor Gunner voted against the recommendations [1). Councillors Cooper, Mrs Cooper, Elkins, Kelly, Lloyd, McAuliffe, and Purser abstained from voting [7].

          The Council

                     RESOLVED – That

(1)  An additional budget provision of £3 million be included in the capital programme for the Regeneration of the Alexandra Theatre project; and

(2)  The Council retains control of the contingency sums for the project and thus retains responsibility for funding any matters that fall outside of the agreed construction contract.

          The Chair then called a ten minute adjournment.