The Leader introduced the report which sought to allow the facility to borrow up to £30m, and apologised that it had come forward as a late, urgent item. He explained that the Council would have to be 100% self-financing as it could not rely on funding from Central Government given reductions in support grant and a less than expected Business Rate income, so Councils needed to invest to earn income. He advised that the facility to borrow up to £30m may or may not be used.

The Leader of the UKIP Group considered that for such a large sum of money, more information should be provided for its purpose.  He questioned why the proposal was not part of the recent Council Budget setting, and suggested borrowing on a case-by-case basis or for a much smaller amount of money.

The Leader of the Labour Group supported borrowing for the local economy, but considered that the report provided inadequate information, was out-of-the-blue, and asked for a surprisingly large amount of money. He speculated that the money was needed to support the Sittingbourne Town Centre Regeneration plans, and the borrowing was contrary to how SBC had acted over the last ten years. 

The Leader of the Independent Group questioned why consideration of future borrowing and capital expenditure had not been made earlier in the budget process? He suggested that the words “Wherever possible” be removed from the last sentence at 2.4 as he considered that such decisions must be scrutinised, and clarified that the consultation referred to under 5.1 of the report was with all Councillors.

A discussion ensued which focussed on the following themes:

·         why was there a need for £30m of borrowing when there was £15m in reserves?;

·         what exactly was the money for?;

·         what was so urgent?;

·         should not be urgent as the Council knew that it would need to become 100% self-financing when the budget was set;

·         would money be spent on Isle of Sheppey projects?;

·         the proposal was for a borrowing facility that may or may not be used;

·         ambitious plan which may pay dividends;

·         the advantages of borrowing facilities available to Local Authorities for investment; and

·         there had been an unexpected reduction in Business Rates income available announced in the Chancellor’s Budget earlier in the day.

The Cabinet Member for Finance stressed that his budget speech had clearly stated the need to invest and raise more income from other sources.  He highlighted the appointment of Councillor Mike Whiting who had taken on responsibility for income generation, and spoke of bringing skills into the Borough.  The Cabinet Member for Finance considered that £30m was reasonable, and income was needed to negotiate and to bring the Council into the commercial world. He did not yet know what investments may be made but considered that any investments would be for the benefit of the Council and its residents.

In response to the points raised by Members, the Leader responded that due to the timetable of meetings, the next available opportunity to present the report was June 2016; highlighted the progress on Queenborough and Rushenden as described in the Leader’s Statement; stressed the need to invest; and outlined the scrutiny processes any individual investment decisions would go through.

In accordance with Council Procedure Rule 19(5) a recorded vote was taken on the recommendation and voting was as follows:

For: Councillors Sarah Aldridge, Cameron Beart, George Bobbin, Andy Booth, Tina Booth, Lloyd Bowen, Bowles, Roger Clark, Mike Dendor, Duncan Dewar-Whalley, Mick Galvin, Sue Gent, Nicholas Hampshire, Mike Henderson, Alan Horton, James Hunt, Lesley Ingham, Ken Ingleton, Nigel Kay, Samuel Koffie-Williams, Gerry Lewin, Peter Marchington, George Samuel, David Simmons, Ben Stokes, Anita Walker, Mike Whiting, Ted Wilcox, John Wright (Total equals 29).

Against: Mike Baldock, Katy Coleman, Adrian Crowther, Richard Derby, Mark Ellen, Paul Fleming, June Garrard, Harrison, Roger Truelove, Ghlin Whelan (Total equals 10).

Abstained: James Hall (Total equals 1).

This was therefore agreed.

Resolved:

(1)  That the Council agree an in-year change to the current budge and policy framework to allow it to set up the facility to borrow up to £30m.