Agenda item

To provide an update of the work of the Investment Board from April 2024 to March 2025.

Members considered an update on the Commercial Investment Strategy and Investment Board from April 2024 to March 2025

Members made comments, asked questions, and received responses as follows.

·       Councillor Woollard asked for clarification on the quarter of a million-pound fees for DM and DP attached to the Chatteris project. He continued there are also consultancy fees shown of £191,400 and £117,000 to Instinctively Green plus £41,000 in legal fees which are in his view colossal and are not allocated to the two principal projects, so what are they for, why have these fees been paid and are they justified? Councillor Boden stressed the FDC is not a development company and FFL does not have the expertise that is necessary for a development company, so the Council has to buy that expertise in. He explained that the abbreviation DM is the Development Management (DM) cost, and the DP is the Development Planning (DP) cost both of which are supplied to FDC by Luvals. Councillor Boden continued, as far as the legal costs the company has various things which it has to do like training, land transfers and legal advice for the overall objective to be achieved and there would be significant benefit to FDC in managing to subsidise its revenue account and services given to residents on an annual basis.

·       Councillor Mrs Davis asked if there are any confirmed timelines for the delivery and completion of the project as they seem to have been rolling on? Councillor Boden stressed that there has been a lot of work happening on the technical side both in terms of what appears on the ground and what has to go in for the planning application and also the way the company is set up and the decisions which have been made. He added that considering the options the Council has now based on LGR that may change what the Council has planned, but as far as the Elms in Chatteris is concerned if the Council was to continue to go ahead as planned the site should be under construction by July 2026 subject to the agreed viability assessments being positive and as far as the Nene Waterfront is concerned in Wisbech there are negotiations happening with an interested party for a significant part of that site and the Council is progressing well with the extra care offer on-site five which is due to go to Planning Committee soon.

·       Councillor Mrs Davis stated there are rising loan costs of £147.000 in 2024/25 and asked at which point do projects become financially unviable and the decision taken to step away? Councillor Boden confirmed this figure was projected to increase significantly over the course of the forthcoming years as additional capital is required in order to achieve the objectives of the company. He continued that if the Council did find there was a significant financial lack of viability, then things can be changed and there are mechanisms in place to deal with unexpected financial lack of viability, and this is currently being reviewed under LGR, and he was expecting there to be options for the Council to work with.

·       Councillor Mrs Davis asked as there has been no formal investment board meetings in 2024/25 how is governance being maintained?  Councillor Boden responded that there was very little point in holding Investment Board meetings if decisions were not being made, but every month the Investment Board members received an update on what the situation is, and good governance is exercised.

·       Councillor Mrs Davis asked what impact will LGR have on FFL assets, governance and accountability? Councillor Boden replied there is an obligation upon FFL to have a business plan is published by 31^st January 2026 and that is the responsibility of the directors of FFL with the situation being reviewed, and options be investigated.

·       Councillor Mrs Davis asked if there is an exit strategy for underperforming or stalled projects? Councillor Boden stated that the basic answer is no, but there is a situation where there is a facility which was made available back in 2021 of £25 million pounds to support the Council’s Investment Strategy but to date the Council has only scratched the surface of that £25 million pounds because the Council has been prudent with only one commercial investment which is mentioned in the report.

Members noted the information provided