Issue - meetings
Recovery Investment Strategy
Meeting: 16/11/2022 - Council (Item 51)
51 Recovery Investment Strategy 
PDF 347 KB
Purpose
To rescind the Recovery Investment Strategy.
Recommendation
That Council resolves to agree to rescind the Recovery Investment Strategy for the reasons as set out in the report.
Additional documents:
Minutes:
The purpose of the report was to Council to rescind the Recovery Investment Strategy for the reasons as set out in this report.
The Cabinet Member for the Economy and Transformation introduced the report and summarised the reasons that the visionary and ambitious Recovery Investment Strategy, that had been developed in 2020 to underpin the Council’s Corporate Priorities should now be rescinded following circumstances that now prevent it from delivering its objectives.
Council noted that the pandemic had delayed the implementation of the full strategy although some initiatives had continued, and the strategy had been refreshed and re-approved by Council in July 2022.
Council noted that on 23 September 2022 the proposals within the Government’s ‘mini-budget’ were “…poorly received by markets with a significant impact on gilts and a huge spike in yields and a further fall in sterling…”. These factors along with existing global factors (the pandemic, Ukraine war) combined to cause widespread political and financial insecurity, and increased the cost of borrowing.
Council noted that during a period of financial instability, the proposed investments within the strategy could no longer be reasonably expected to deliver the previously anticipated strong rates of return.
Council noted that the Council’s corporate priorities remained unchanged and, although it was recommended that the strategy was rescinded, important investment opportunities supporting these priorities would still be considered, developed and initiated where it made sound financial sense to do this and strong business cases could be established.
RESOLVED: Council agreed to rescind the Recovery Investment Strategy for the reasons set out in this report.
Voting Record – For 32, Against 1, Abstentions 0, Absent 1,
Meeting: 07/11/2022 - Cabinet (Item 58)
58 Recovery Investment Strategy PDF 236 KB
Purpose
To rescind the Recovery Investment Strategy.
Recommendation
That Cabinet recommends to Council to:
a) Rescind the Recovery Investment Strategy for the reasons as set out in this report.
Additional documents:
Minutes:
The purpose of this report was to rescind the current Recovery Investment Strategy.
The Cabinet Member for the Economy and Transformation introduced the report and provided context and the circumstances that had caused the Cabinet to conclude that the Recovery Investment Strategy should be rescinded.
Cabinet noted that the strategy had been developed with a number of visionary and ambitious initiatives that would deliver funds that would underpin Corporate Priorities and enable Council services to be supported. Unfortunately, the Government’s ‘mini-budget’ on 23 September 2022 had a catastrophic effect on financial markets, caused huge spikes in gilt yields, dramatic falls in the value of sterling, increased interest rates and brought about a period of unprecedented political and financial instability.
Cabinet stated that during the current period of financial instability, the proposed investments within the strategy could no longer be reasonably expected to deliver strong anticipated rates of return, and the current Recovery Invest Strategy should therefore be rescinded.
Cabinet noted that the corporate priorities were unchanged and, although it was recommended that the strategy was rescinded, important investment opportunities supporting these would still be considered, developed and initiated where these made sound financial sense and strong business cases could be established.
Cabinet noted that financial returns on future investments may take longer to deliver during a challenging financial period.
Cabinet noted that the Council’s only current borrowing was £500k (at 2.5%) that had funded the Cotswold Climate Investment, delivering Electric Vehicle Charging Points and reducing the carbon impact of the Council’s building.
RESOLVED: Cabinet agreed to recommend that Council rescinded the Recovery Investment Strategy, for the reasons as set out in the report
Voting Record – For 8, Against 0, Abstention 0, Absent 0