Date: 24 November 2017 Meeting of the Council Monday, 4 December 2017 6.35pm Council Chamber, Town Hall, Warrington

Steven Broomhead Chief Executive _______________________________________________________________ Agenda prepared by Sharon Parker, Councillor Services Manager – Telephone: (01925) 442161, Email: szparker@warrington.gov.uk) _______________________________________________________________ 1. Apologies 2. The Minutes of the Council

To be moved by the Mayor and seconded by the Deputy Mayor: That the Minutes of the meeting of the Council held on 16 October 2017 be agreed as a correct record.

3. Correspondence from the previous meetings (Enclosed)

4. Code of Conduct – Declarations of Interest

Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012

Members are reminded of their responsibility to declare any disclosable pecuniary or non-pecuniary interest which they have in any item of business on the agenda no later than when the item is reached.

The Head of Legal and Democratic Services and Monitoring Officer to the Council or

representatives in Democratic and Member Services are available prior to the meeting to advise and/or to receive details of the interest and the item to which it relates.

Declarations are a personal matter for each Member to decide. Whilst officers will advise on the Code and its interpretation, the decision to declare, or not, is the responsibility of the Member based on the particular circumstances.

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5. Civic Mayor’s Announcements 6. Announcements from the Leader Questions to the Leader or the appropriate Executive Board Member

There is an opportunity for Members to ask questions of the Leader or the appropriate Executive Board Member on his announcements. The question must relate to any matter referred to in his ‘Announcements from the Leader’. Each Question will last no longer than 2 minutes except with the consent of the Mayor. The whole period for dealing with questions to the Leader will be capped at 15 minutes as contained in the Council Procedure Rules 13.1 b.

7. To receive Reports from the Executive Board and the Council’s Committees

7.1 Executive Director – Families and Wellbeing Report of the Chief Officer Employment Committee Proposed by Cllr T O’Neill Seconded by Cllr R Bowden 7.2 Mid-Year Treasury Review 2017/18 Report of the Audit and Corporate Governance Committee Proposed by Cllr C Fitzsimmons Seconded by Cllr C Froggatt

8. Questions Received from Members of the Public In accordance with Standing Order 13.12 -13.25 questions from the public must be received by the Head of Democratic and Member Services by 12 noon on Monday 27 November 2017. No more than three questions shall be addressed and no person or body or organisation may submit more than one question at any one meeting. A time limit of five minutes shall apply per question to cover the asking of the question, the response and any supplementary question and response. Responses will be given either orally or in writing.

The Mayor will invite the questioner to put the question to the Councillor nominated to answer it. The Mayor may receive one supplementary question, which must be related to the original question. Should any questions be received after the date of agenda issue but prior to the closing date for receipt of questions further details will be provided.

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9. Questions from Members of the Council

In accordance with Standing Order 13.1 – 13.10 Questions must be received by the Head of Democratic and Member Services, in writing by 5.00pm on Tuesday 28 November 2017. The time allowed at Council meetings for asking and responding to a question including any supplementary questions should normally be five minutes.

Should any questions be received after the date of agenda issue but prior to the closing date for receipt of questions further details will be provided. Council Procedure 13.5 - Questions are to be taken on a rotation basis between the Political Groups starting with the opposition groups and individuals. Once each group has asked their first question the process will be repeated until the time limit for questions at paragraph 13.9 has expired. Questions for each group or individual are to be taken in the order that they are received by the Head of Democratic and Member Services following the procedures in paragraph 13.4. Within Council Procedure Rule 13.9 there will be a cap set at 30 minutes for dealing with questions from Members. Any questions put to the meeting but not answered within the 30 minute timescale a written response will be provided. All questions will be taken as read. Question 1 To Cllr J Guthrie from Cllr K Buckley A recent air pollution survey has been published in which Warrington only ranked below London and Eastbourne as being one of the most polluted regions in England with regard to air quality. What is the Council doing to try and ameliorate this situation for our community?

10. Motions

In accordance with Standing Order 15, motions must be delivered to the Head of Democratic and Member Services by 9.30am on Friday 24 November 2017.

Proposer - Cllr Patel

Seconder - Cllr Bowden

MOTION 1 - NJC PAY TO COUNCILS

1. Warrington Borough Council notes that:

NJC basic pay has fallen by 21% since 2010 in real terms

NJC workers have had a three-year pay freeze from 2010-2012

Local terms and conditions of many NJC employees have also been cut, impacting on their overall earnings

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NJC pay is the lowest in the public sector

Job evaluated pay structures are being squeezed and distorted by bottom-loaded NJC pay settlements needed to reflect the increased National Living Wage and the Foundation Living Wage

There are growing equal and fair pay risks resulting from this situation

2. This Council therefore supports the NJC pay claim for 2018, submitted by UNISON, GMB and Unite on behalf of council and school workers and calls for the immediate end of public sector pay restraint. NJC pay cannot be allowed to fall further behind other parts of the public sector. This Council also welcomes the joint review of the NJC pay spine to remedy the turbulence caused by bottom-loaded pay settlements.

3. This Council also notes the drastic ongoing cuts to local government funding and

calls on the Government to provide additional funding to fund a decent pay rise for NJC employees and the pay spine review.

4. This Council therefore resolves to:

Call immediately on the LGA to make urgent representations to Government to fund the NJC claim and the pay spine review and notify us of their action in this regard

Asks the Leader to write to the Prime Minister and Chancellor supporting the NJC pay claim and seeking additional funding to fund a decent pay rise and the pay spine review

Meet with local NJC union representatives to convey support for the pay claim and the pay spine review

11. Appointments to the Independent Remuneration Panel Report of the Chief Executive

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MEETING OF THE COUNCIL – 16 October 2017 Present: The Mayor (Councillor L Morgan) Councillors: B Axcell, Cllrs B Barr, R Bate, D Bennett, M Biggin, Bowden, K Buckley, P Carey, J Carter, M Creaghan, L Dirir, C Fitzsimmons J Flaherty, G Friend, Froggatt , J Grime, J Guthrie, S Hall, M Hannon, S Harris, J Hart, T Higgins, T Jennings, D Keane, J Kerr-Brown, A King, R Knowles, S Krizanac, B Maher, I Marks, T McCarthy, M McLaughlin, C Mitchell, H Mundry, K Mundry, P Nelson, T O’Neill, S Parish, H Patel, D Price, Cllr Purnell, M Smith, M Tarr, P Walker, P Warburton, G Welborn, J Wheeler, T Williams, S Woodyatt , P Wright, and S Wright. C39 Apologies H Cooksey, J Davidson, A Dirir, A Hill, W Johnson, and K Morris C 40 Minutes of the Council Resolved: That the minutes of the Council meeting held on 4 September 2017 were agreed as a correct record. C 41 Correspondence from the Previous Meetings Noted. C 42 Code of Conduct – Declarations of Interest Item 8.1/C46 – Cllr Keane declared an interest as Cheshire Police and Crime Commissioner and did not participate in the discussion or the vote. Cllr G Friend declared an interest in item C49 as a member of the Friends of Warrington Transporter Bridge Group. He did not participate in the discussion or the vote. C 43 Result of Bye Election, Chapelford and Old Hall Borough Ward – 12 October 2017 Council received a report of the Chief Executive and Returning Officer which reported the result of the Borough Bye Election held on Thursday 12 October 2017. Cllr Paul Warburton was welcomed to the meeting and congratulated on his recent election success. Reason for Decision: To inform the Council of the result of the Borough Bye election for the Chapelford and Old Hall Ward held on 12 October 2017.

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C 44 Civic Mayor’s Announcements The Mayor outlined a number of events attended by himself and the Mayors since the previous Council meeting. C 45 The Leader’s Announcements The Leader made the following announcements: Apprentice Success Reported that Anthony Miller and Stephen Wilcock, both from Warrington had qualified as Vehicle and Plant Mechanics within the Fleet and Facilities Service of the Economic Regeneration Growth and Environment Directorate. He thanked David Smith, the Manager and Judith Guthrie the Portfolio Holder responsible for that area for supporting this important initiative. This programme represented a true Apprentice Scheme in the traditional sense with a full four year term programme and accredited qualifications with succession planning for the trade and industry. He pointed out that these young people represented the future of the Town’s industries and deserved praise and full support, and so the Leader had asked the Mayor to present them with a signed certificate to be presented in the Mayor’s Parlour on Wednesday, 18 October 2017. Warrington Festival Congratulated everyone who did so much to create a successful Warrington Festival. Highlights of this great cultural celebration included the RivFest festival with Billy Bragg and the ever-popular, Mela, along with the English Half Marathon. The Warrington Contemporary Arts Festival ran until 28 October and included performance, music, theatre, exhibitions and events across Warrington. There was also an exhibition celebrating special events in the history of Warrington Museum, including the opening of the main art gallery in Oct 1877, which ran until next year. Time Square Project Last month saw another milestone in the 762-year-old Warrington Market as it moved into a new temporary location as part of the transformational Time Square Development Project. It was pointed out that it was a joy to see such a vibrant and revitalised market in the centre of the town and it was only a hint of what was yet to come when the market moved to its final location, on Bridge Street in the future. Following an initial period of demolition and construction, Warrington Market’s temporary location was the first product of the Time Square Development Project and the next product would be the new multi-storey car park on Academy Way, opening in a few weeks’ time. As the Council prepared for the opening of this state-of-the-art car park it would simultaneously see the hoarding being erected that marked the construction site of the final phase of the Time Square Development Project that would no doubt transform the town centre for generations to come. Bed Blocking The Leader would be discussing the recent government decision to impose arbitrary targets on ‘bed blocking’ with fines for Local Authorities with MPs and the Local Government Association. A safe and comfortable transition from hospital to home was a key priority for

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the NHS and the Council but the targets should be part of a partner negotiation rather than unilateral imposition. Western Link The second part of the Western Link consultation was now completed. The highways team had chosen the amended red route which has meant that fewer households were likely to be negatively impacted by it and it was important that everyone responded to the consultation so an informed decision could be made. The Executive Board would now vote on the preferred route before it is decided whether to apply to the Department for Transport for the necessary funding. Local Plan Preferred Development Option The Leader thanked everyone who had contributed in Warrington’s Local Plan initial consultation. Although the draft of the plan was not published and consulted upon until next year it was important to get views on the initial concepts. It was important to note that if the Council did not provide the houses that the Council’s ambitious plans required then the housing market would over-heat forcing up the prices for housing which would disadvantage communities in the town. The local plan was crucial in guiding our own local growth and development ensuring it delivered the housing, business, jobs and infrastructure the borough needs over the next 20 years. These proposals were the result of months of careful and considered planning, with a focus on delivering a sustainable future for Warrington. All the responses to the consultation exercise would be looked at carefully and this would inform the draft plan which would be published next year. The Council would consult again on the draft plan to make sure the views of all interested parties were heard. There would be examination in public by an Independent Government Inspector who would make the final decision, again after listening to the views of the residents of Warrington. Cllr Barr thanked the Leader and Executive Board for their announcements. He congratulated Cllr Warburton on his recent successful election campaign. He further asked the Leader that in view of the unprecedented public response to the Preferred Development Option (PDO), the negative press, complaints and no support from the town’s two MPs did he think it was a failure of his leadership not to have explained the process and aspirations for the Town in the PDO document. The Leader responded that the process for the PDO had been circulated and it was a long process to be followed which would continue until next year. No decision would be taken until due process had been gone through. Cllr Krizanac asked Cllr Higgins about the position of Westbrook Library. Cllr Higgins responded that it would be inappropriate to answer at the current time as there were a number of libraries involved and the Libraries Working Group would be making their recommendations over the next couple of months. Following a question by Cllr Krizanac regarding digital transformation Cllr Patel referred to the 400 different IT systems currently being used within the Council. He stated that the

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transformation programme would be incremental and at each phase there would be checks in place to see if it was making a difference. This should lead to greater accountability. Cllr Barr referred to the amount of risk that the Administration was subjecting the Council to and the recent lower rating by Moodys. He asked whether Cllr Bowden was concerned. Cllr Bowden stated that he was not concerned and outlined reasons for this including the impact of Brexit. The Leader following a question from Cllr Walker confirmed that comments generated through the PDO process would inform the draft Local Plan. Cllr Barr thanked Cllr Patel for his response regarding the proposed transformation programme but asked how the Council could be assured it would be delivered. Cllr Patel responded by saying that the Council had to make changes as all services were under pressure. There would be due process through the programme out and if at any stage there were concerns the programme would stop to ensure that money would not be wasted. C 46 Public Spaces Protection Order Council received a report of the Executive Board which sought Council approval to introduce a Public Spaces Protection Order (PSPO) to replace the currently existing Designated Public Places Order (DPPO) with effect from October 2017. A full public consultation exercise has been undertaken; the results of which are referenced throughout this report. It was proposed by Councillor J Guthrie and seconded by Councillor T O’Neill and it was resolved based on the considerations contained in the report, and support from the public consultation and the Executive Board, Council supported the Borough wide PSPO for alcohol to be implemented in October 2017. Reason for Decision: The outcome of the consultation showed that a significant majority of respondents were in favour of a Borough Wide PSPO for alcohol. A borough wide Public Spaces Protection Order has a number of benefits, including; greater flexibility, immediacy, and perhaps the most important factor, consistency in tackling issues, saving time and money, and contributing to community safety priorities for the town. The Executive Board at its meeting on 10 July 2017 supported the Borough wide PSPO for alcohol to be implemented. C 47 Questions Received from Members of the Public Question 1 – S Jackson to Councillor J Guthrie, Environment and Public Protection (including Climate Change) Based on the massive negative reaction and outrage from local residents to the PDO proposals, what is WBC's response to the allegation that they have lost touch with the aspirations and expectations of Warrington's residents, especially those living south of the Manchester Ship Canal and areas around Latchford?

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Cllr Guthrie responded that she could understand the reaction in South Warrington but the Council had a statutory responsibility to provide new homes. The Housing White Paper stated that there were not enough homes and all Local Authorities needed to meet these housing needs. This was exactly what the Council was doing. There needed to be an increase in new homes. Warrington was no different and if the Council did not provide this accommodation the situation would only get worse. There was a requirement for a five year supply of homes. There was currently only provision for a three year period. Warrington was not alone in proposing to roll back the green belt. The Preferred Development Option would see 13,134 new homes north of the ship canal and 9,900 south of the Ship Canal. As a transport authority new infrastructure would be required to support a growing town and to tackle air quality. The Local Plan Statutory process was outlined including the public examination of the Draft Plan. She welcomed dialogue but stressed that if the Council did not face up to the issues it would impact on future generations. As a supplementary question Mr Jackson asked how the trust levels with the residents of South Warrington and the Council were going to be rebuilt? In response to the supplementary question Cllr Guthrie responded that it was a statutory process that the Council was currently going through and it would be unwise to discuss that evening. Progress needed to be followed as required. Question 2 – S Chisholm to Councillor M McLaughlin, Public Health and Wellbeing Can the council please inform residents how they are going to ensure that, in line with the announcements made at the Conservative Party Conference, the building of affordable housing for people living in this town will be given priority over other types of homes? Cllr McLaughlin responded that housing was a big issue facing the county and was a real matter of concern. Affordable rents were difficult to find and there was insufficient accommodation given increases in the population and people living until they were older. The Council recognised the difficulties many families were facing. Affordable housing was required in planning applications of 11 or more dwellings. Cllr McLaughlin referred to the recent Conservative Party Conference where the Prime Minister announced a £2 billion pot of grant money to build affordable homes that councils and housing associations could bid for. The reality though was that it meant the building of 5000 affordable homes throughout the country. Past experience had shown that private landlords were worse than Housing Associations. The Council recognised the need for affordable housing. Supplementary Question:

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In view of this need to balance the types of homes and the fact that the Council has major investments in a housing company, and a bank, which lends to experienced property investors, many have asked how can the Council be considered independent and in a position to dictate the type and quantity of housing within the town? Your PDO states that it will follow levels of growth in accordance with the LEP’s Strategic Economic Plan, however this partnership includes Board Members, e.g. from Langtree who will benefit substantially from vast developments on green belt. Can the Council please explain how if any of the town’s investments, advisors, officers, members or partnerships with other developers benefit from greenbelt land being released it will maintain total independence and avoid bias when choosing expansion over the environment? As a response Cllr McLaughlin stated that planning was a quasi-judicial body and that all matters would be looked at. If concerns were raised then they would be answered in an appropriate way and legal advice sought if required. Question 3 – C Maguire to Councillor H Mundry, Highways, Transportation and Public Realm Can the council please inform residents of the justification for the announcement of a preferred Western Link route, which has been significantly altered, on the basis of a response rate of less than 1% of the borough, particularly when according to the summary report by Resolve of the 1,972 respondents to the question: ‘please indicate what your current view is on the proposal for a Warrington Western Link’ 52% were not supportive and 5% had no view? Cllr Mundry responded that the public response was not the only factor to be taken into account. The Department for Transport required the council to follow a strict process that assessed a number of themes. The themes were transport network impacts, wider economic impacts, environment impacts, social and distributional impacts, deliverability, third party views and cost and risk. Overall this route was the best route and provided the least disruption. As a supplementary question Cllr Mundry was asked whether resident’s health and wellbeing would be affected with the proposed route. Cllr Mundry responded that this route provided the least impact for the most benefit. Question 4 – B Roberts to Councillor J Guthrie, Environment and Public Protection (including Climate Change) The current pre-Brexit WBC PDO is grossly inflated in relation to many things - amongst them: 1. the Objective Need Assessment (ONA) as described recently by the Home Secretary 2. The population growth figures used over the next 20 years 3.the flow of projected net labour into Warrington post the Brexit decision. 4. The projected employment opportunities that are Ill defined in the PDO in a poor attempt

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to make it look more acceptable to the community. 5. The U.K. and Warrington economic growth outlook post Brexit 6. WBC ability to deliver such an ambitious plan given the woeful lack of current infrastructure to deal with today's current problems that must be addressed prior to any new build. This is CLEARLY a developer led PDO that significantly overstates the future housing needs of Warrington and does particular dis-service to the location and types of home that need to be built to help the young and old of the Warrington community. All of this serves the developer community and not the people of Warrington. It in no way reflects the Labour Party rallying cry "for the many not the few" - quite the reverse - a few developers will make millions whilst many continue to suffer throughout Warrington when executive homes and not the much needed social housing form the majority of the build plan in this flawed PDO . These executive homes will then become the Council Tax "cash cow” for WBC to try and get itself out from under its growing debt mountain that has now led to its MOODY DOWNGRADE amongst peer councils for its overly ambitious plans and enormous projected debt levels that will incur if this PDO is actioned. To deliver this PDO will mean the "theft" of South Warrington greenbelt amenities - including the destruction of the Trans -Pennine Trail (TPT) much loved and used by the community over many years. With this in mind can the council please explain the legitimacy, integrity and business acumen of their decision to engage ARUP as consultants to the PDO with respect to key task of re-classification of greenbelt land in Warrington? ARUP are an advertised commercial partner to Peel Holdings in many of their past and future ventures. Peel Holdings would be main beneficiaries of any weakening of any greenbelt status - surely the Council saw the clear conflict of interest here between getting an independent survey and one with clear potential bias towards an answer supportive of a key customer - Peel - rather than the good people of Warrington? (As this question exceeded the public question limit for Council, a written response would be issued). C 48 Questions from Members of the Council Question 1 - to Councillor J Guthrie from Councillor C Mitchell Can Cllr Guthrie please provide an update on air quality around the town and let us know what measures the Council are taking to reduce pollution? Cllr Guthrie responded that air quality levels in 2016 within Warrington were similar to those of 2015. However, some areas were higher and the Council was trying to address this issue. Measures had been put in place; details relating to the data were available and could be accessed. In addition an Air Quality Action Plan had been established to focus on five priorities. No supplementary question. Question 2 - to Councillor P Wright from Councillor J Wheeler

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It has been reported that 87% of Councils responsible for social care may not have enough places to meet potential demand by 2022. What steps are being taken in Warrington to ensure that enough places will be available? Cllr Wright responded that the Council and Client Commissioning Group constantly monitored market capacity to ensure that need was being met. This information would inform future planning. From performance data Warrington was in the top quartile. However, the future was precarious given reductions in funding. To sustain the care market, invest to save initiatives were required. It was noted that Ofsted had rated Warrington a good place to do business in social care. No supplementary question. Question 3 - to Councillor J Guthrie from Councillor C Mitchell

Could you confirm the Council’s commitment to greener journeys, including the growing number of cycle ways, electric charging points for vehicles, enforcement of bus lanes and a commitment to look at measures such as a clean air corridor in the town, for electric buses, pedestrians and walkers? Cllr Guthrie responded that from a recent survey the number of cyclists had increased and the Local Transport Plan had reflected this with the various initiatives within it. The Council had also encouraged the provision of electric vehicle charging points and the new multi storey car park would have 60 points available. Points would also be provided at Warrington West train station. The council was using Automatic Number Plate Recognition (ANPR) camera technology to manage its bus lanes and a programme of enforcement was being rolled out. Examples were provided at the meeting. The Travel Choice Team were actively involved in sustaining active travel, a recent example was the new bus route in Omega following the opening of the Amazon building. Commitment to look at other schemes could be seen in the draft Air Quality Action Plan that sat alongside emerging policies such as the Local Plan and the Local Transport Plan. No supplementary question. Question 4 - to Councillor J Guthrie from Councillor B Barr Was the acceptability of the terms “Warrington New City” and “Garden City Suburb” tested with residents in Warrington prior to making them the centrepieces of the Local Plan Preferred Development Option? Cllr Guthrie responded that they were two separate points. City status was a descriptor term for a programme of investment. The Devolution Task Group of which Cllr Barr had been a member had recommended that the Warrington New City programme be progressed. There had been no testing with residents.

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Garden City was a descriptor for a form of place development eg quality new homes with gardens, health, leisure etc. The Government now used this term. There was a proposal in the PDO so there was ongoing consultation on this. As a supplementary Cllr Barr asked as the terms had not been tested will the terms be changed so that they will be understandable? Cllr Guthrie responded that it would be unwise to comment any further and the consultation around the PDO needed to be progressed. Question 5 - to Councillor H Mundry from Councillor S Harris Is the Council investigating the possibility of light rail as part of a solution to the town’s traffic congestion problem? Cllr Mundry stated that yes every option was being looked at. As a supplementary Cllr Harris asked if light rail had already been looked at who had looked at it and when had it taken place. Cllr Mundry responded that the options had not yet been looked at and the earliest would be Spring/Summer 2017 depending on staff time. He urged that everyone that wanted to make a contribution should do so. Question 6 - to Councillor T O’Neill from Councillor J Wheeler What effect has the closure of Marks & Spencer’s had on footfall in the town centre? Cllr O’Neill stated that as Marks and Spencer’s had only closed in July/August figures were not yet available. He was, though, determined that Warrington should continue to have a vibrant town centre. As a supplementary question Cllr Wheeler asked if the retail offer was capable of matching up to Chester, Altrincham etc? Cllr O’Neill responded that yes it was. Question 7 - to Councillor D Price from Councillor B Axcell

At which meeting, and when, was that decision made to bid for City of Culture status and

when did it appear in the Forward Plan?

Cllr Price responded that the item did not need to go on the Forward Plan as it did not meet

the threshold. It was debated at Executive Board and was being openly discussed in public

and in the media. He further referred to the benefits of the bid eg Victoria Park etc.

As a supplementary question Cllr Axcell thanked Cllr Price for adding clarity to the situation

and asked if a further application was to be made for the next bidding round?

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Cllr Price responded that he was not in a position to confirm.

Question 8 - to Councillor J Guthrie from Councillor S Krizanac At the last Council I asked a question on Fracking but the answer merely told me about the gathering of information and the need to look at the terms of reference, two years after the group was set up. Please can you tell me what has actually been achieved to date and what the timetable is for the future work of the Group? Cllr Guthrie thanked the Councillor for the question and referred to a similar question that had been responded to previously. She reiterated that the group that was established was a fact finding group to gain an understanding of the methods involved. The group would be meeting again in the coming weeks. It was not however, the group’s intention to reach a position statement, so that decisions would not be fetered. Cllr Guthrie also referred to the position in Lancashire where Cllr Krizanac was a resident. As a supplementary question Cllr Krizanac stated that as a Councillor he was entitled to ask a question that had not been previously answered and asked what had been achieved by the Group and why was the Council dragging their feet. Cllr Guthrie responded that she had answered the question. C 49 Motions Proposed: Cllr D Price Seconded: Cllr H Mundry

1. This Council notes:

i On the 28th September 2017 at the international conference of transporter bridges in Buenos Aires, a multinational accord was signed calling for UNESCO world heritage status for all transporter bridges around the globe.

ii This accord aims to create a multinational UNESCO submission as an extension to the existing and successful world heritage site of Vizcaya transporter bridge in Spain.

iii If successful, the three British bridges in Middlesbrough, Newport and Warrington would be listed as UNESCO world heritage sites. Not only would this be remarkable for Warrington as the location of the world’s last remaining railway transporter bridge, but this would contribute to the existing recognition of Britain’s truly impressive industrial heritage.

iv However, as UNESCO world heritage applications require Department of Digital, Culture, Media & Sport agreement, this is not something that any local authority can lead or decide on.

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2. This council calls upon the Parliamentary Under Secretary of State for Arts, Heritage and Tourism, to meet with Warrington representatives and discuss how this UNESCO world heritage application can advance to the next stage, considering the progress that has been made to date and the limitations of what can be achieved locally.

Motion put to the vote and was CARRIED

C50 Appointment to Council Committees Proposed by Cllr O’Neill Seconded by Cllr Bowden Resolved the following changes be made to committee membership: DMC (Planning) Committee Cllr Brian Maher (in place of Faisal Rashid) Cllr Peter Carey (in place of Cllr Karen Mundry) Audit & Corporate Governance Committee Cllr Paul Warburton (in place of Faisal Rashid) Health Scrutiny Committee Cllr Paul Warburton (in place of Cllr Peter Carey)

Signed………………………….

Dated………………………….

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Correspondence from Previous Meetings 1. Correspondence relating to the Motion – UNESCO for Transporter Bridges 2. Email response to Mr Roberts – public question from the October Council meeting - Cllr J

Guthrie.

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Warrington.gov.uk

Email to: Mr B Roberts -

Councillor Judith Guthrie

Executive Member

Environment and Public Protection

(including Climate Change)

Town Hall Sankey Street

Warrington WA1 1UH

17th October 2017 Dear Mr Roberts Question No: 4 The current pre-Brexit WBC PDO is grossly inflated in relation to many things - amongst them :

1. The Objective Need Assessment (ONA) as described recently by the Home Secretary 2. The population growth figures used over the next 20 years 3. The flow of projected net labour into Warrington post the Brexit decision 4. The projected employment opportunities that are Ill defined in the PDO in a poor attempt

to make it look more acceptable to the community 5. The U.K. and Warrington economic growth outlook post Brexit 6. WBC ability to deliver such an ambitious plan given the woeful lack of current infrastructure

to deal with today's current problems that must be addressed prior to any new build. This is CLEARLY a developer led PDO that significantly overstates the future housing needs of Warrington and does particular dis-service to the location and types of home that need to be built to help the young and old of the Warrington community. All of this serves the developer community and not the people of Warrington. It in no way reflects the Labour Party rallying cry "for the many not the few" - quite the reverse - a few developers will make millions whilst many continue to suffer throughout Warrington when executive homes and not the much needed social housing form the majority of the build plan in this flawed PDO . These executive homes will then become the Council Tax "cash cow” for WBC to try and get itself out from under its growing debt mountain that has now led to its MOODY DOWNGRADE amongst peer councils for its overly ambitious plans and enormous projected debt levels that it will incur if this PDO is actioned. To deliver this PDO will mean the "theft" of South Warrington greenbelt amenities - including the destruction of the Trans -Pennine Trail (TPT) much loved and used by the community over many years. With this in mind can the council please explain the legitimacy, integrity and business acumen of their decision to engage ARUP as consultants to the PDO with respect to key task of re-classification of greenbelt land in Warrington. ARUP are an advertised commercial partner to Peel Holdings in many of their past and future ventures. Peel Holdings would be main beneficiaries of any weakening of any greenbelt status - surely the Council saw the clear conflict of interest here between getting an independent survey and one with clear potential bias towards an answer supportive of a key customer – Peel – rather than the good people of Warrington?

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RESPONSE The only question above involved the Procurement of ARUP: The Council appointed ARUP to undertake Warrington’s Green Belt Assessment in accordance with the Council’s procurement procedures. This was a competitive process and required all bidding companies to demonstrate that they had no commercial interests which could compromise the objectivity of their work. The Council is entirely satisfied that ARUP have undertaken a thoroughly professional and objective Green Belt Assessment. Yours sincerely,

Councillor Judith Guthrie Executive Member Environment & Public Protection (including Climate Change)

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AGA ITEM 7.1

WARRINGTON BOROUGH COUNCIL COUNCIL – 4 December 2017 Report of Executive Board Member:

Councillor Terry O’Neill - Leader and Chair of the Chief Officer Employment Committee

Director : Lynton Green, Director of Corporate Services Report Author: Julie Holt, Head of Human Resources

Contact Details: Email Address: jholt@warrington.gov.uk

Telephone: 01925 442843

Ward Members:

All

TITLE OF REPORT: APPOINTMENT OF EXECUTIVE DIRECTOR – FAMILIES AND WELLBEING 1. PURPOSE 1.1 To consider the appointment of Stephen Peddie as the Council’s Executive

Director – Families and Wellbeing.

2. CONFIDENTIAL OR EXEMPT 2.1 This report is neither confidential nor exempt. 3. INTRODUCTION AND BACKGROUND 3.1 Under the Council’s agreed pay policy, all appointments with a

remuneration package (salary plus any applicable fees and allowances) with a value of over £100,000 are subject to approval of full Council. Staff Employment Rules within the council’s Constitution (7.5 – 7.7) also require the Council to approve the recommendation of the Chief Officer Employment Committee.

3.2 The post of Executive and Director – Families and Wellbeing became

vacant following the departure of Stephen Reddy. The council has undertaken a national recruitment exercise to fill this post.

3.3 The role of Executive Director – Families and Wellbeing also contains the

statutory responsibilities of Director of Children’s Services and Director of Adult Social Services, as agreed by Council at its meeting of 9 September 2013.

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It item

AGA ITEM 7.1

3.4 Following an assessment centre on Thursday 19 October 2017, the Council’s Chief Officer Employment Committee convened to assess shortlisted candidates on Friday 20 October. The Committee resolved that a conditional offer be made to Stephen Peddie for the position of Executive Director – Families and Wellbeing, subject to agreement by Full Council and the usual constitutional arrangements.

3.5 Stephen Peddie is currently the Council’s Operational Director – Adult Services,

and has been employed by the council since 6 October 2014. 4. FINANCIAL CONSIDERATIONS 4.1 The post of Executive Director – Families and Wellbeing is designated Grade B1

on spinal column point 70 which represents a salary of £125,498. The post is fully funded within the establishment therefore there is no additional cost to the council to this appointment.

5. RISK ASSESSMENT 5.1 Failure to appoint to this post on a permanent basis will create an ongoing risk in

terms of sustainable leadership for the directorate, as this post will need to be covered indefinitely until such an appointment can be made.

6. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT 6.1 Section 7 of the Local Government and Housing Act 1989 requires that every

appointment made by a local authority shall be on merit. 6.2 As indicated in paragraph 3.2 the Council advertised the post nationally. 7. CONSULTATION 7.1 As indicated in paragraph 3.1 it is a matter for the Council to approve any offer

of an appointment to the post with a remuneration package with a value of over £100,000.

8. REASONS FOR RECOMMENDATION 8.1 The Chief Officer Employment Committee, following a process undertaken in line

with the council’s Staff Employment Rules, has resolved to offer Stephen Peddie the post of Executive Director – Families and Wellbeing.

9 RECOMMENDATION 9.1 To approve the recommendation of the Chief Officer Employment Committee held

on 20 October 2017 to appoint Stephen Peddie as Executive Director – Families and Wellbeing, with effect from 11 December 2017.

22

It item

AGA ITEM 7.1

10 10.1

BACKGROUND PAPERS There are no background papers to this report.

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AGENDA Item 7.2

WARRINGTON BOROUGH COUNCIL COUNCIL 4 December 2017

Report of the: Chief Finance Officer Report Author: Danny Mather, Head of Corporate Finance Contact Details: Email Address:

dzmather@warrington.gov.uk Telephone: 01925 442344

Ward Members:

All

TITLE OF REPORT: 2017/18 MID YEAR TREASURY REVIEW

1. PURPOSE OF THE REPORT

1.1 To comply with the Chartered Institute of Public Finance and Accountancy’s

(CIPFA) Code of Practice (Code) on Treasury Management (revised 2009) which was adopted by this Council on 1st March 2010, there is a requirement that a half yearly report on the performance of the Council’s treasury management operation be reported to Full Council. This report was reported to the Audit and Corporate Governance Committee on 16 November 2017 as they are the body charged with the scrutiny of Treasury Management by the Council. It is now presented to Council for approval.

1.2 This report provides an update on the first six months of the year which is the

requirement of the CIPFA Code. A glossary of treasury terms can also be found in Appendix 1.

2. BACKGROUND 2.1 The Council operates a balanced budget, which broadly means cash raised

during the year will meet its cash expenditure. Part of the treasury management operations ensure this cash flow is adequately planned, with surplus monies being invested in low risk counterparties, providing adequate liquidity initially before considering optimising investment return.

2.2 The second main function of the treasury management service is the funding of the Council’s capital plans. These capital plans provide a guide to the borrowing need of the Council, essentially the longer term cash flow planning to ensure the Council can meet its capital spending operations. This management of longer term cash may involve arranging long or short term loans, or using longer term cash flow surpluses, and on occasion any debt previously drawn may be restructured to meet Council risk or cost objectives.

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2.3 Accordingly, treasury management is defined as:

“The management of the local authority’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks”.

2.4 This mid-year report has been prepared in compliance with CIPFA’s Code of

Practice, and covers the following:

An economic update for the first six months of 2017/18 financial year A review of the Treasury Management Strategy Statement and Annual

Investment Strategy The Council’s capital expenditure (prudential indicators) A review of the Council’s investment portfolio for 2017/18 A review of the Council’s borrowing strategy for 2017/18 A review of any debt rescheduling undertaken during 2017/18 A review of compliance with Treasury and Prudential Limits for 2017/18

3. ECONOMIC UPDATE 3.1 United Kingdom - After the UK economy surprised on the upside with strong

growth in 2016, growth in 2017 has been disappointingly weak; quarter 1 came in at only +0.3% (+1.7% y/y) and quarter 2 was +0.3% (+1.5% y/y) which meant that growth in the first half of 2017 was the slowest for the first half of any year since 2012. The main reason for this has been the sharp increase in inflation, caused by the devaluation of sterling after the referendum, feeding increases in the cost of imports into the economy. This has caused, in turn, a reduction in consumer disposable income and spending power and so the services sector of the economy, accounting for around 75% of GDP, has seen weak growth as consumers cut back on their expenditure. However, more recently there have been encouraging statistics from the manufacturing sector which is seeing strong growth, particularly as a result of increased demand for exports. It has helped that growth in the EU, our main trading partner, has improved significantly over the last year. However, this sector only accounts for around 11% of GDP so expansion in this sector will have a much more muted effect on the average total GDP growth figure for the UK economy as a whole.

3.2 The Monetary Policy Committee (MPC) meeting on 14 September 2017 surprised markets and forecasters with a more aggressive tone in terms of its words around warning that Bank Rate will need to rise. The Bank of England Inflation Reports during 2017 have stated that it is expected CPI inflation to peak at just under 3% in 2017, before falling back to near to its target rate of 2% in two years-time. Inflation actually came in at 2.9% in August, (data released 12/09/17), and so the Bank revised its forecast for the peak to over 3% at the 14 September meeting of the MPC. This marginal revision can hardly justify why the MPC became so aggressive with its working; rather, the

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focus was on an emerging view that with unemployment falling to only 4.3%, the lowest level since 1975, an improvements in productivity being so weak, that the amount of spare capacity in the economy was significantly diminishing towards a point at which they now needed to take action. In addition, the MPC took a more tolerant view of low wage inflation as this now looks like a common factor in nearly all western economies as a result of increasing globalisation. This effectively means that the UK labour faces competition from overseas labour e.g. in outsourcing work to third world countries, and this therefore depresses the negotiating power of UK labour. However, the Bank was also concerned that the withdrawal of the UK from the EU would effectively lead to a decrease in such globalisation pressures in the UK, and so would be inflationary over the next few years.

3.3 It is likely that the MPC will increase Bank Rate to 0.5% in November 9was (increased or, if not, in February 2018. The big question after that will be whether this will be a one off increase or the start of a slow, but regular, increase in Bank Rate. As at the start of October, short sterling rates are indicating that financial markets do not expect a second increase until May 2018 with a third increase in November 2019. However, some forecasters expect growth to improve significantly in 2017 and into 2018, as the fall in inflation will bring to an end the negative impact on consumer spending power while a strong export performance will compensate for weak services sector growth. If this scenario were to materialise, then the MPC would have added reason to embark on a series of slow but gradual increases in Bank Rate during 2018. While there is so much uncertainty around the Brexit negotiations, consumer confidence, and business confidence to spend on investing, it is far too early to be confident about how the next two years will evolve.

3.4 European Union (EU) – economic growth in the EU (the UK’s biggest trading partner) has been flat for several years after the financial crisis despite the European Central Bank (ECB) eventually cutting its main rate to -0.4% and embarking on a massive programme of Quantitative Easing (QE). However, growth pricked up in 2016 and now looks to have gathered ongoing substantial strength and momentum thanks to this stimulus. Gross Domestic Product (GDP) was 0.5% in quarter 1 (2.0% year on year (y/y)) and 0.6% in quarter 2 (2.3% y/y). However, despite providing massive monetary stimulus, the ECB is still struggling to get inflation up to its 2% target and in August inflation was 1.5%. It is therefore unlikely to start on an upswing in rates until possibly 2019.

3.5 United States of America (USA) – growth in the American economy has been volatile in 2015 and 2016. The current year is similar with quarter 1 coming in at only 1.2% but quarter 2 rebounding to 3.1%, resulting in an overall annualised figure of 2.1% for the first half year. Unemployment in the US has also fallen to the lowest level for many years, reaching 4.4%, while wage inflation pressures, and inflationary pressures in general, have been building. The Fed has started on a gradual upswing in rates with three increases since December 2016; and there could be one more rate rise in 2017 which would then lift the central rate to 1.25-1.50%. There could then be

26

another four more increases in 2018. At its June meeting, the Fed suggested that it would soon begin to unwind its $4.5 trillion balance sheet holdings of bonds and mortgage backed securities by reducing it reinvestment of maturing holdings.

3.6 China – economic growth in China has been weakening over successive years, despite repeated rounds of central bank stimulus; medium term risks are increasing. Major progress still needs to be made to eliminate excess industrial capacity and the stock of unsold property, and to address the level of non-performing loans in the banking and credit systems.

3.7 Japan – is struggling to stimulate consistent significant growth and to get inflation up to its target of 2%, despite huge monetary and fiscal stimulus. It is also making little progress on fundamental reform of the economy. Interest rate forecasts

3.8 The Council’s treasury advisor, Capita Asset Services, has provided the following forecast:

Bank rate Public Works Loan Board Borrowing Rates

5 Year 10 Year 25 Year 50 Year

Forecast TMSS Current TMSS Current TMSS Current TMSS Current TMSS Current

Dec-17 0.25% 0.25% 1.60% 1.50% 2.30% 2.20% 3.00% 2.90% 2.80% 2.70%

Mar-18 0.25% 0.25% 1.70% 1.60% 2.30% 2.30% 3.00% 2.90% 2.80% 2.70%

Jun-18 0.25% 0.25% 1.70% 1.70% 2.40% 2.30% 3.00% 3.00% 2.80% 2.80%

Sep-18 0.25% 0.25% 1.70% 1.70% 2.40% 2.40% 3.10% 3.00% 2.90% 2.80%

Dec-18 0.25% 0.25% 1.80% 1.80% 2.40% 2.40% 3.10% 3.10% 2.90% 2.90%

Mar-19 0.25% 0.25% 1.80% 1.80% 2.50% 2.50% 3.20% 3.10% 3.00% 2.90%

Jun-19 0.50% 0.50% 1.90% 1.90% 2.50% 2.50% 3.20% 3.20% 3.00% 3.00%

Sep-19 0.50% 0.50% 1.90% 1.90% 2.60% 2.60% 3.30% 3.20% 3.10% 3.00%

Dec-19 0.75% 0.75% 2.00% 2.00% 2.60% 2.60% 3.30% 3.30% 3.10% 3.10%

Mar-20 0.75% 0.75% 2.00% 2.00% 2.70% 2.70% 3.40% 3.30% 3.20% 3.10%

TMSS – Treasury Management Strategy Statement 2017/18

3.9 Capita Asset Services undertook a quarterly review of its interest rate forecasts on 9 August after the quarterly Bank of England Inflation Report. There was no change in MPC policy at that meeting. However, the MPC meeting of 14 September revealed a sharp change in sentiment whereby a majority of MPC members said they would be voting for an increase to 0.5% at the November MPC meeting. If that happens, the question will then be as to whether the MPC will stop at just withdrawing the emergency Bank Rate cut of 0.25% in August 2016, after the result of the EU withdrawal referendum, or whether they will embark on a series of further increases in Bank Rate during 2018.

3.10 The overall balance of risks to economic recovery in the UK is currently to the downside but huge variables over the coming few years include just what final form Brexit will take, when finally agreed with the EU, and when.

3.11 Downside risks to current forecasts for UK gilt yields and PWLB rates currently include:

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UK economic growth and increases in inflation are weaker than we currently anticipate.

Weak growth or recession in the UK’s main trading partners – EU and US.

Geopolitical risk in Europe, the Middle East and Asia, which could lead to increasing safe haven flows.

A resurgence of the Eurozone sovereign debt crisis.

Weak capitalisation of some European banks.

Monetary policy action failing to stimulate sustainable growth and to get inflation up consistently to around monetary policy target levels.

3.12 The potential for upside risks to current forecasts for UK gilt yields and PWLB

rates, especially for longer term PWLB rates include:

The pace and timing of increases in the Fed. Funds Rate causing a fundamental reassessment by investors of the relative risks of holding bonds as opposed to equities and leading to a major flight from bonds to equities.

UK inflation returning to significantly higher levels causing an increase in the inflation premium inherent to gilt yields.

TREASURY MANAGEMENT STRATEGY STATEMENT AND ANNUAL INVESTMENT STRATEGY UPDATE

4.1 The Council’s Treasury Management Strategy Statement (TMSS) for 2017/18

was approved by the Full Council on 27th February 2017. The Council’s Annual Investment Strategy, which is incorporated in the TMSS, outlines the Council’s investment priorities as follows:

Security of capital

Liquidity

4.2 There are no policy changes to the TMSS; the details in this report update the position in the light of the updated economic position and budgetary changes already approved. However this is an amendment to the Prudential Indicator which was reported in the TMSS (due to a transposition error) as set out below:

Prudential Indicator

Original 2017/18

£m

Original 2018/19

£m

Original 2019/20

£m

Revised 2017/18

£m

Revised 2018/19

£m

Revised 2019/20

£m

Authorised Limit 1129.556 1420.376 1716.053 1129.556 1420.376 1716.053 Operational Boundary 1207.334 1474.591 1392.501 999.434 1207.224 1474.473

CFR* 1023.115 1287.597 1556.502 1023.115 1287.597 1556.502 *CFR = Capital Finance Requirement

4.3 The Council will also aim to achieve the optimum return (yield) on investments commensurate with the proper levels of security and liquidity. In the current economic climate it is considered appropriate to keep investments short term

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up to a year; however exceptions have been made with the Local Authority Mortgage Scheme (LAMS), Charities, Churches and Local Authorities (CCLA) Property Fund and Green Energy investments.

4.4 In terms of borrowing the Council’s Medium Term Financial Plan (MTFP) had a forecast figure for 2017/18 for borrowing of £586.562m to fund the capital programme. The policy to borrow this money was when the best interest rate position existed during the year and was also dependent on the phasing of the capital programme and progress made on many challenging invest to save schemes.

4.5 Investments and borrowing during the first six months of the year have been in

line with the strategy, and there have been no deviations from the strategy. Further details of the Council’s investment and debt portfolio can be seen in section 5 and 6 below.

4.6 As outlined in Section 3 above, there is still considerable uncertainty and volatility in the financial and banking market, both globally and in the UK. In this context, it is considered that the strategy approved on 27th February 2017 is still fit for purpose in the current economic climate.

4.7 During the quarter ended 30 September 2017, the 50 year PWLB target (certainty rate) for new long term borrowing started at 2.70% and ended at 2.72%.

4.8 It is anticipated that further borrowing will be undertaken during the financial year, in part to repay temporary borrowing taken at the end of the previous financial year and in part to meet the capital programme expenditure.

5. THE COUNCIL’S CAPITAL POSITION (PRUDENTIAL INDICATORS)

5.1 This part of the report is structured to update:

The Council’s capital expenditure plans;

How these plans are being financed;

The impact of the changes in the capital expenditure plans on the prudential indicators and the underlying need to borrow; and

Compliance with the limits in place for borrowing activity.

5.2 Prudential Indicator for Capital Expenditure – this table shows the revised estimates for capital expenditure and the changes since the capital programme was agreed at the Budget.

Capital Expenditure by Service 2017/18 Original

Estimate £m

2017/18 Q1

Position £m

2017/18 Q2

Position £m

Families & Wellbeing 8.839 11.337 10.387

Resources & Strategic Commissioning 2.256 2.748 1.917

Economic Regeneration Growth & Environment 66.083 53.273 52.064

Invest to Save Programme 540.516 562.163 545.456

Total Capital Expenditure 617.694 629.521 609.824 29

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5.3 Changes to the Financing of the Capital Programme – The table below

draws together the main strategy elements of the capital expenditure plans. It highlights the original supported and unsupported elements of the capital programme, and the expected financing arrangements of this capital expenditure. The borrowing element of the table increased the underlying indebtedness of the Council by way of the Capital Financing Requirement (CFR), although this will be reduced in part by revenue charges for the repayment of debt (the Minimum Revenue Provision). This direct borrowing need may also be supplemented by maturing debt and other treasury requirements.

5.4 Changes to the Prudential Indicators for the Capital Financing Requirement (CFR), External Debt and the Operational Boundary – the table below shows the CFR, which is the underlying external need to incur borrowing for a capital purpose. It also shows the expected debt position over the period, which is termed the Operational Boundary

Capital Expenditure by Service 2017/18 Original

Estimate £m

2017/18 Q1

Position £m

2017/18 Q2

Position £m

Total Capital Expenditure 617.694 629.521 609.824

Financed by:

Capital Grants and Reserves 16.855 11.938 21.826

Capital Receipts 1.339 1.162 0.681

Revenue Funding 0.000 0.293 0.468

External Funding 12.938 7.898 11.942

Total Financing 31.132 21.291 34.917

Borrowing Requirement 586.562 608.230 574.907

2017/18 Original

Estimate £m

2017/18 Forecast Position

£m

Prudential Indicator – Capital Financing Requirement

Net movement in CFR 585.064 573.421

Prudential Indicator – the Operational Boundary for external debt

Accumulative Borrowing 1203.205 963.598

Other long term Liabilities* 4.129 4.232

Total debt (year-end position) 1207.334 967.830

* On balance sheet PFI schemes and finance leases, etc.

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5.5 Limits to Borrowing Activity – the first key control over the treasury activity

is a prudential indicator to ensure that over the medium term net borrowing (borrowings less investments) will only be for capital purposes. Gross external borrowing should not, except in the short term, exceed the total of CFR in the preceding year plus the estimates of any additional CFR for 2017/18 and next two financial years. This allows some flexibility for limited early borrowing for future years. The Council has approved a policy for borrowing in advance of need which will be adhered to if this proves prudent.

There are no difficulties envisaged for the current or future years in complying with this prudential indicator.

5.6 Authorised Limit – a further prudential indicator controls the overall level of

borrowing. This is the Authorised Limit which represents the limit beyond which borrowing is prohibited, and needs to be set and revised by Members. It reflects the level of borrowing which, while not desired, could be afforded in the short term, but is not sustainable in the longer term. It is the expected maximum borrowing need with some headroom for unexpected movements. This is the statutory limit determined under section 3(1) of the Local Government Act 2003.

6. INVESTMENT PORTFOLIO 2017/18

6.1 In accordance with the CIPFA Code, it is the Council’s priority to ensure

security of capital and liquidity, and to obtain an appropriate level of return which is consistent with the Council’s risk appetite. As set out in Section 3, it is a very difficult investment market with the level of interest rates commonly seen in previous decades as rates are very low and in line with the 0.25% bank rate. The continuing potential for a re-emergence of a Eurozone sovereign debt crisis, and its impact on banks, prompts a low risk and short term strategy. Given this risk environment, investment returns are likely to remain low.

2017/18 Original

Estimate £m

2017/18 Forecast Position

£m

Borrowing 566.562 963.598

Other long term Liabilities* 4.129 4.232

Total debt (year-end position) 985.565 967.830

CFR (year-end position) 1023.115 963.599

2017/18 Original

Estimate £m

2017/18 Forecast Position

£m

Borrowing for Authorised Limit 1125.427 967.830

Other long term Liabilities* 4.129 4.232

Total debt (year-end position) 1129.556 963.598

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6.2 The Council held £109m of investments as at 30 September 2017 and the investment portfolio yield for the first six months of the year is 3.59%.

6.3 The table below shows the breakdown of the Council’s investment returns compared to Capita’s benchmark, by length of investment. Benchmark Benchmark

Return Council

Performance

7 day 0.11% 0.31%

3 month 0.18% 5.25%

6 month 0.32% -

12 month 0.53% 4.00%

The Council also compares its investments to CIPFA’s benchmark but at the time of writing the report the information was not available. Future updates will be provided to committee.

6.4 The total of the Council’s investments as at 30th September 2017 was £109m, a breakdown of which is given below:

Fixed Investments Start Maturity Interest

Counter Party Date Date Rate Principal

CCLA 30/04/13 30/04/23 5.258 12,902,533

Willersey Solar Bond 11/09/14 11/09/19 7.000 2,000,000

Solar Bonds 1 - Rolls Royce 30/10/15 30/10/20 6.000 5,000,000

Swindon Solar Bonds 2 07/09/16 07/09/21 5.000 10,000,000

Swindon Solar Bonds 2 07/09/16 07/09/21 5.000 10,000,000

LiveWire Community Energy 29/02/16 28/02/26 4.000 301,499

Solar Bonds 2 07/09/16 31/03/18 5.000 4,500,000

LiveWire Community Energy 18/10/16 18/10/21 4.000 247,545

Redwood Bank 04/04/17 04/04/22 10,000,000

Solar Bonds 4 21/04/17 21/04/22 4.000 1,000,000

Solar Bonds 4 21/04/17 21/04/18 4.000 3,000,000

Solar Bonds 6 24/05/17 24/08/17 5.250 0

Solar Bonds 6 24/05/17 24/08/17 5.250 0

Goldman Sachs 04/08/17 04/11/17 0.325 2,000,000

Solar Bonds 6 24/08/17 31/03/18 4.000 10,000,000

Solar Bonds 6 24/08/17 31/03/18 4.000 9,000,000

Total Investments 79,951,577

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Overnight Deposits Balance Balance Movement Yearly Avg

Counter Party 31/03/2017 30/09/2017 Interest Rate

£ £ £ %

Santander (A&L) 10,000,000 15,000,000 5,000,000 0.55%

Bank of Scotland 0 0 0 0.15%

Yorkshire Bank 0 0 0 -

Nat West (Select Liquidity) 1,170,000 1,229,000 59,000 0.01%

Handelsbanken 0 453 453 0.13%

Legal and General MMF 2,785,000 1,106,402 -1,678,598 0.24%

Prime Rate MMF 10,000,000 2,750,000 -7,250,000 0.24%

Standard Life (Ignis) MMF 20,000,000 8,730,000 -11,270,000 0.26%

Deutsche MMF 0 0 0 -

CCLA MMF 25,000 25,000 0 0.16%

43,980,000 28,840,855 -15,139,145 0.32%

6.5 The Council has reclassified the Local Authority Mortgage Scheme as a long term debtor in the Council’s final accounts when previously they had been reported as investments. The details are shown below:

Local Authority Mortgage Scheme

Balance 31 March

2017

Balance 30 Sept

2017

Movement during

year

£ £ £

Lloyds/TSB 0 0 0

Leeds Bank 500,000 0 (500,000)

Lloyds/TSB 1,000,000 1,000,000 0

Lloyds/TSB 2,000,000 2,000,000 0

Total Local Authority Mortgage Scheme

3,500,000 3,000,000 (500,000)

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6.6 The Council also classifies the loans to registered social landlords as long

term debtors in the Council’s accounts. The details are shown below as at 30th September 2017:

Facility Long Term Debtors: Start Maturity Original Balance Outstanding Movement

£ Counter Party Date Date Drawdown 31/03/17 Principal in Year

10,000,000 Warrington Housing Association 13/08/10 11/08/35 1,000,000 848,580 834,693 (13,887)

Warrington Housing Association 07/06/12 07/06/37 3,000,000 2,655,669 2,614,971 (40,698)

1,819,234 Golden Gates Housing Trust 27/02/12 27/02/37 1,819,234 1,611,212 1,587,417 (23,795)

30,000,000 Muir Housing Association 22/04/14 22/04/39 2,000,000 1,876,133 1,853,485 (22,649)

Muir Housing Association D2 £1m 02/07/15 02/07/40 1,000,000 960,257 948,324 (11,933)

Muir Housing Assoc D3 £4m 29/04/16 29/04/41 4,000,000 3,906,179 3,857,810 (48,369)

Muir Housing Assoc D4 £2m 13/06/16 13/06/41 2,000,000 1,962,933 1,937,646 (25,287)

Muir Housing Assoc D5 £3.5m 15/07/16 15/07/41 3,500,000 3,431,264 3,384,496 (46,768)

90,000,000 Helena Housing Group 31/07/14 31/07/39 15,000,000 14,189,103 14,014,608 (174,494)

60,000,000 Wulvern Housing Group 11/09/14 11/09/39 10,000,000 10,000,000 10,000,000 0

3,000,000 Your Housing £3m 28/11/14 28/11/39 3,000,000 2,846,219 2,809,848 (36,372)

20,000,000 Equity Housing Group D1 £10m 29/06/16 29/06/41 10,000,000 9,814,921 9,688,656 (126,265)

3,000,000 Wirral Methodist Housing Assoc D1 £500k09/01/17 09/01/42 500,000 495,000 490,000 (5,000)

Wirral Methodist Housing Assoc D2 £500k03/08/17 03/08/42 500,000 0 500,000 500,000

25,000,000 Cheshire Peaks & Plains Housing

25,000,000 St Vincents Housing Association

5,000,000 Arawak Walton Housing Association

100,000,000 One Houisng Groupd Ltd

50,000,000 Places for People

500,000 Prestwich Northwestern

250,000 Warrington Borough Transport 26/03/13 26/03/18 250,000 25,000 0 (25,000)

400,000 Warrington Borough Transport 03/04/13 03/04/18 400,000 40,000 0 (40,000)

7,500,000 OMEGA Facility 1 09/12/14 24/10/21 7,500,000 3,024,986 3,139,804 114,817

5,400,000 OMEGA Facility 1 27/11/15 24/10/22 4,398,740 3,253,748 4,482,704 1,228,956

436,869,234 69,867,974 60,941,203 62,144,460 1,203,257

6.7 Investment Counterparty Criteria – The current investment counterparty criteria selection approved in the TMSS is meeting the requirement of the treasury management function.

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7. BORROWING 7.1 The Council’s 2017/18 MTFP contained a forecasted borrowing figure to fund

the capital programme of £586.562m. Following a review of the capital programme this figure as at quarter 2 is £574.907m. It is expected in line with this strategy that borrowing to fund the capital programme will take place during the remaining year.

7.2 The Council’s capital financing requirement (CFR) for 2017/18 is £1023.115m.

The CFR denotes the Council’s underlying need to borrow for capital purposes. To finance the capital expenditure (the CFR) the Council may use grants, capital receipts, etc. (detailed in table 5.3 above). If these funds are not sufficient to fund the capital expenditure this will mean that there is a need to borrow money to fund the capital programme (i.e. borrowing requirement, table 5.3). The Council may borrow from the PWLB or the market (external borrowing) or from internal balances on a temporary basis (internal borrowing) to fund the difference (detailed in table 5.3). The balance of external and internal borrowing is generally driven by market conditions.

7.3 Due to the overall financial position and the underlying need to borrow for

capital purposes (the capital financing requirement – CFR); new external borrowing of £252.5m was undertaken from PWLB, market and temporary loans.

The current portfolio as at the 30th September 2017 of PWLB loans, market and temporary loans was £645.920m, a breakdown of which is shown below:

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Public Works Loan Board Start Maturity Interest Principal

Counter Party Date Date Rate % £

PWLB - Maturity 25/09/97 23/03/23 6.625 277,737

PWLB - Maturity 22/02/07 30/09/56 4.350 222,189

PWLB - Maturity 15/01/10 15/01/35 4.530 438,824

PWLB - Annuity 13/08/10 13/08/35 3.940 44,989

PWLB - Maturity 26/11/10 30/09/55 5.260 555,473

PWLB - Annuity 27/02/12 27/02/37 3.760 1,550,240

PWLB - Annuity 11/06/12 11/06/37 3.260 2,576,920

PWLB - Annuity 24/04/14 24/04/39 3.940 1,849,692

PWLB - Annuity 04/08/14 04/08/39 3.800 13,852,477

PWLB - Maturity 15/09/14 15/09/39 3.940 10,000,000

PWLB - Annuity 28/11/14 28/11/39 3.140 2,793,897

PWLB - Annuity 02/07/15 02/07/40 3.210 945,961

PWLB - Annuity 29/04/16 29/04/41 2.860 3,888,556

PWLB - Annuity 13/06/16 13/06/41 2.450 1,941,182

PWLB - Maturity 29/06/16 28/04/66 2.500 20,000,000

PWLB - Annuity 29/06/16 27/06/41 2.260 9,698,525

PWLB - Annuity 19/07/16 19/07/41 2.030 3,391,290

PWLB - Equal Instalment Payment 11/01/17 11/01/42 2.440 490,000

PWLB - Maturity 07/03/17 07/03/22 1.260 10,000,000

PWLB - Maturity 08/03/17 08/03/23 1.370 10,000,000

PWLB - Maturity 08/03/17 08/03/25 1.660 10,000,000

PWLB - Maturity 08/03/17 08/03/26 1.790 10,000,000

PWLB - Maturity 08/03/17 08/03/27 1.910 5,000,000

PWLB - Maturity 08/03/17 08/03/28 2.020 5,000,000

PWLB - Maturity 08/03/17 08/03/29 2.120 5,000,000

PWLB - Maturity 08/03/17 08/03/30 2.210 5,000,000

PWLB - Maturity 08/03/17 08/03/31 2.290 5,000,000

PWLB - Maturity 08/03/17 08/03/32 2.360 5,000,000

PWLB - Maturity 08/03/17 08/03/33 2.430 5,000,000

PWLB - Maturity 08/03/17 08/03/34 2.480 5,000,000

PWLB - Maturity 08/03/17 08/03/35 2.520 5,000,000

PWLB - Maturity 08/03/17 08/03/36 2.560 5,000,000

PWLB - Maturity 08/03/17 08/03/24 1.510 10,000,000

PWLB - Maturity 03/08/17 03/08/42 2.320 500,000

PWLB - Maturity 08/09/17 08/09/58 2.350 22,000,000

PWLB - Maturity 08/09/17 08/09/59 2.340 23,000,000

PWLB - Maturity 08/09/17 08/09/60 2.330 23,000,000

PWLB - Maturity 08/09/17 08/09/61 2.320 23,000,000

PWLB - Maturity 08/09/17 08/09/62 2.310 23,000,000

PWLB - Maturity 08/09/17 08/09/63 2.310 23,000,000

312,017,950Total Outstanding

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Money Market Start Maturity Interest Principal

Counter Party Date Date Rate % £

DEPFA BANK PLC 21/04/07 21/10/66 5.800 5,000,000

BAYERISHCE LANDESBANK 27/03/02 27/03/42 4.980 5,000,000

COMMERZBANK (prev EURAPAISCHE HYPOTHEKEN)02/04/02 02/04/42 5.000 5,000,000

COMMERZBANK (prev EURO HYPO) 26/04/02 28/04/42 4.990 15,000,000

DEPFA BANK PLC 01/04/03 01/04/43 4.223 5,000,000

DEPFA ACS BANK 01/04/03 01/04/43 4.304 10,000,000

DEXIA FINANCE PUBLIC BANK 24/11/05 24/11/65 3.820 10,000,000

BARCLAYS BANK 03/04/06 05/04/66 3.810 5,000,000

BARCLAYS BANK 20/01/06 20/01/66 3.960 10,000,000

BARCLAYS BANK 26/07/07 26/07/77 4.180 25,000,000

DEXIA FINANCE PUBLIC BANK 16/08/06 17/08/76 4.230 13,500,000

London Borough of Newham 31/10/13 31/10/17 1.850 5,000,000

Hampshire CC 13/12/13 12/12/18 2.350 5,000,000

Milton Keynes 24/11/14 25/11/19 2.000 5,000,000

Oxfordshire CC 22/07/15 21/07/17 0.850 0

Oxfordshire CC 22/07/15 20/07/18 1.200 5,000,000

Prudential Bond : Variable Rate Linked to CPI 25/08/15 25/08/55 0.846 50,000,000

Charnwood BC 24/02/16 24/02/18 0.900 2,000,000

London Borough of Wandsworth 26/02/16 26/02/18 0.980 5,000,000

Sheffield City Region 18/03/16 16/03/18 0.950 3,000,000

Pinnacle Insurance PLG 08/09/17 08/09/20 0.900 3,000,000

Barking & Dagenham London Borough of 08/09/17 08/09/20 0.920 20,000,000

Buckinghamshire & Milton Keynes Fire Authority 08/09/17 08/09/20 0.900 2,000,000

Bonds 01/04/08 01/04/50 0.500 12,275

213,512,275Total Outstanding

Temporary Loans Start Maturity Interest Principal

Counter Party Date Date Rate % £

Parish Council Loans Various 31/03/18 0.500 389,947

Hyndburn Borough Council 08/04/16 07/04/17 0.600 0

Hyndburn Borough Council 15/04/16 13/04/17 0.600 0

Wandsworth London Borough 08/12/16 07/12/17 0.450 10,000,000

Crawley Borough Council 29/11/16 28/11/17 0.450 3,000,000

North Yorkshire CC 25/11/16 24/11/17 0.470 10,000,000

Guildford Borough Council 02/12/16 01/12/17 0.450 5,000,000

Islington London Borough 24/11/17 23/11/18 0.650 0

Pendle 25/11/16 24/11/17 0.420 2,000,000

Hertfordshire County Council 02/06/17 04/12/17 0.350 10,000,000

Cambridgeshire & Peterborough 06/06/17 06/12/17 0.300 10,000,000

Hampshire County Council 24/07/17 23/07/18 0.400 8,000,000

London Borough of Ealing 24/07/17 23/07/18 0.420 3,000,000

Fylde Borough Council 24/07/17 23/07/18 0.420 2,000,000

West Yorkshire Fire & Rescue 31/07/17 31/10/17 0.250 10,000,000

Middlesbrough Borough Council 02/08/17 02/11/17 0.250 10,000,000

Tyne & Wear Pension Fund 02/08/17 02/11/17 0.250 10,000,000

Surrey County Council 02/08/17 02/11/17 0.270 20,000,000

0 00/01/00 00/01/00 0.000 0

Total Outstanding 120,389,947

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8. Credit Rating

8.1 The Council in 2015 sought a credit rating from Moody’s (one of the World’s

leading credit rating agencies). The rating given to the Council was Aa2 which was the second highest rating possible.

8.2 Each year the Council’s credit rating is re-evaluated by Moody’s. In September

as part of the review Moody’s downgraded the Council’s credit rating by two notches to A1. The reason for this downgrade was given as the one notch downgrade of the UK economy and the greater risk profile of the Council’s capital programme financed by debt compared to more ‘’traditional authorities’’. Whilst the downgrade is disappointing it needs to be balanced by the fact that the Council’s debt plans have not changed since the first Moody’s review in 2015 and the returns and capital appreciation that the Council’s invest to save programme is generating. Also an A1 credit rating is still high and the same as that of Saudi Arabia, Israel and the Czech Republic.

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9. DEBT RESCHEDULING 9.1 Debt rescheduling opportunities have been limited in the current economic

climate and consequent structure of interest rates and following the increase in the margin added to gilt yields which has impacted PWLB new borrowing rates since October 2010. No debt rescheduling was undertaken during the first six months of 2017/18.

10. COMPLIANCE WITH TREASURY AND PRUDENTIAL LIMIT 10.1 It is a statutory duty for the Council to determine and keep under review the

“Affordable Borrowing Limits”. The Council’s approved Treasury and Prudential Indicators (affordability limits) are outlined in the approved Treasury Management Strategy Statement (TMSS).

10.2 During the financial year to date the Council has operated within the treasury

limits and prudential indicators set out in the Council’s TMSS and in compliance with the Council's Treasury Management Practices (TMP). The main prudential and treasury indicators are shown in the table below:

Prudential Indicator 2017/18 2017/18

Indicator Forecast

£m £m

Capital Expenditure 617.7 609.8

In Year Borrowing Requirement

Authorised limit for external debt 1129.6 1129.6

Operational boundary for external debt 1207.3 1207.3

Gross Borrowing 981.4 963.6

Investments -108.8

Net Borrowing 981.4 854.8

Capital Financing Requirement (CFR) 1023.1 963.6

Ratio of financing costs to net revenue stream 4.7 8.8

Incremental impact of capital investment decisions:

Increase in council tax (band change) per annum 13.8 9.04

Limit of fixed interest rates based on net debt 100% 100%

Limit of variable interest rates based on net debt 40% 40%

Principal sums (£m) invested > 364 days £100 £51

Maturity structure of borrowing limits:

Under 12 months 30% 21.7%

12 months to 2 years 30% 0.8%

2 years to 5 years 35% 6.2%

5 years to 10 years 30% 7.0%

10 years and above 100% 64.3%

11. YEAR END FORECAST POSITION

11.1 The Council is forecasting a £4.8m underspend position on the Loans and Investments budget at the year end, based on the figures at the end of September 2017. This is a result of a fall in borrowing costs, diversification of the investment portfolio, success of the loans programme and slippage on the capital programme.

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12. TREASURY DEVELOPMENTS

12.1 Birchwood Park – Following Executive Board approval on 24th July 2017, the

Council proceeded to acquire Birchwood Park on 11 September 2017. The acquisition of the Park entitles the Council to receive rental and other income paid by the businesses and tenants operating on the Park. After payment of costs the park generates a positive commercial financial return to the Council. The Park was purchased via a Jersey based unit trust structure with all savings generated from this structure re-invested in Council services. The structure is similar to that adopted by other local authorities recently and by public sector pension schemes.

The investment is being managed and monitored by the Birchwood Park Advisory Panel made up of Council officers and external, professional advisors. The Executive Board will approve all major investment decisions in the park together with the yearly business plan and the Audit & Corporate Governance Committee will monitor the parks performance. Since the purchase by the Council, occupation on the Park has increased from 92.5% to 95% with an increase in income above that forecast.

12.2 Redwood Bank – following Executive Board approval in February 2017, Warrington made an initial investment of £10m in the newly formed Redwood challenger bank, taking a 33% shareholding. The Bank received its initial banking licence from the Prudential Regulation Authority (PRA) in April. The newly formed bank has established its formal board, and the Council’s Section 151 Officer attends board meetings as an official shareholder observer. Various processes have been established and have now been signed off with the Bank of England and trading has commenced. The Bank held a very successful launch event in Warrington on 23 October 2017 that was well attended by the local business community.

12.3 Loans to Housing Associations- during the period the Council continued to expand its Loans to Housing Associations. In line with the Council’s 2017/18 Capital Programme agreed by Full Council in February 2017, a further drawdown by Wirral Methodist Housing Group was taken in August of £500k.

12.4 Loans to One Housing, Places for People and Prestwich Northwestern were agreed at the July 2017 Executive Board. Further loans are being discussed with other providers and a future report will go to the Executive Board for approval if the deal progresses.

12.5 The loans to the registered providers are provided at different rates and margins. The expected total accumulated profit on the loans will be over £3m by the end of the financial year 2017/18. The Council also has received over £3m for all of the arrangement fees on the facilities provided to date.

12.6 Omega – a further facility was approved by the Executive Board in December 2015 totalling £5.4m to fund infrastructure works in relation to the new Barrow

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Hall Primary School Development. A further drawdown has been taken from the facility in the period totalling £107k. An extension of the agreement was allowed up to the end of August 2017.

12.7 Local Authority Property Fund - the Council’s investment in the Churches, Charities and Local Authority (CCLA) Property Fund is a unit trust fund that invests in commercial and industrial property in the UK. The fund continues to perform well and is currently yielding an investment return of 5.26%. The initial £10m investment has increased in value by £2.903m in four years.

12.8 Treasury Management Board - the Treasury Management Board is a body of leading Councillors that receives and debates details of the risks and opportunities of treasury management and related capital programme developments. Discussion regarding the loans to Registered Providers, Business Bank, property update, Solar Bonds, MIFID II, Prudential code and debt portfolio were held during the last meeting.

12.9 Swindon Solar Farm Investment – there have been a few investments at the beginning of the financial year. The investments have been completed with a syndicate of other Local Authorities (Bexley, Newham and Havering). There has been a part maturity in the solar bond of £1m; the Council has a total of £54.5m invested in solar bonds.

12.10 Local Government Association (LGA) Municipal Bond Agency (MBA) – the LGA have set up an agency (Local Capital Finance Company (LCFC)) whereby low or high levels of bond finance could be obtained by Local Authorities as an alternative option to the PWLB. The LGA and 48 councils have signed up to become investors in the company, with the Council investing £200k in the bond agency. The first bond is expected in 2017/18.

12.11 Contract Monitoring – the Council has set up an effective contract monitoring system to monitor its loan contracts on an ongoing basis. This was subject to a full audit review in 2015/16 which gave substantial assurance of the procedures.

12.12 Revised CIPFA Codes – the Chartered Institute of Public Finance and Accountancy (CIPFA) is currently conducting an exercise to consult local authorities on revising the Treasury Management Code and Cross Sectoral Guidance Notes, and the Prudential Code. CIPFA is aiming to issue the revised codes during November. A particular focus of this exercise is how to deal with local authority investments which are not treasury type investments e.g. by investing in purchasing property in order to generate income for the authority at a much higher level than can be attained by treasury investments. One recommendation is that local authorities should produce a new report to members to give a high level summary of the overall capital strategy and to enable members to see how the cash resources of the authority have been apportioned between treasury and non-treasury investments. Officers are monitoring developments and will report to members when the new codes have been agreed and issued and on the likely impact on this authority.

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12.13 MiFID II – the EU has now set a deadline of 3 January 2018 for the introduction of regulations under MiFID II. These regulations will govern the relationship that financial institutions conducting lending and borrowing transactions will have with local authorities from that date. This will have little effect on this authority apart from having to fill in forms sent by each institution dealing with this authority and for each type of investment instrument used apart from cash deposits with banks and building societies.

12.14 Due Diligence -The Council follows stringent due diligence and Governance procedures in making all its investments. CIPFA have identified the good practice the Council followed in the due diligence of the Birchwood Park by including it as a case study of good governance practice in their recent publication titled ‘’The Practicalities of Prudence – Key principles of due diligence for local authorities.’’ A copy of which is attached at appendix 2.

12.15 TREASURY ADVISORS – Capita Asset Services are appointed Treasury

Advisors to the Council. They have now been acquired by Link Group. Link Group is listed on the Australian Stock Exchange with a market capitalisation of almost AUD $4billion and ranked in the S&P/ASX 100. Link is a market-leading provider of technology-enabled solutions in the financial and corporate markets, has a reputation for innovation, and a strong and loyal client base.

13 CONFIDENTIAL OR EXEMPT

13.1 Not confidential.

14. FINANCIAL CONSIDERATIONS

14.1 Due to the nature of the report, the financial implications are contained throughout the report.

14.2 In order to achieve a balanced budget, the authority relies upon generating

maximum interest from its investments whilst minimising the exposure to risk. In order to achieve this, investments are mainly placed with institutions which are included on the investment counterparty list. Investment durations sometimes exceed those as advised by Capita credit ratings which are associated with the specific institutions. Full analysis has been provided for any exceptions to this in committee reports.

14.3 Where the authority is required to borrow to meet the needs of the authority,

officers will evaluate market information on timings and options in order to ensure the best deal for the Council.

15. RISK ASSESSMENT

15.1 A full risk assessment has been undertaken. The Council’s annual Treasury Management Strategy Statement details the financial risks facing the Council’s treasury portfolio over the coming year.

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15.2 The Council has also completed the CIPFA Treasury Management risk assessment survey and the results will be reported to the committee.

16. EQUALITY AND DIVERSITY/EQUALITY IMPACT ASSESSMENT

16.1 The Finance Service undertakes equality impact assessment (EIA) in its wider functions. Service changes that emerge from proposals contained in the TMSS are subject to equality impact assessments.

17. CONSULTATION

N/A

18. CONCLUSION

18.1 All treasury activity for the first half of the year was carried out in full compliance with the Council’s Treasury Management Strategy Statement which was approved by Full Council on 27th February 2017.

19. REASONS FOR RECOMMENDATIONS

19.1 To ensure the Council compiles with the 2009 revised CIPFA Treasury Management Code of Practice.

20. RECOMMENDATIONS 20.1 That Council note the report, the treasury activity and approve the changes to

the prudential indicators.

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21. BACKGROUND PAPERS

Treasury working papers

Contacts for Background Papers:

Name E-mail Telephone

Danny Mather Corporate Finance Manager

dzmather@warrington.gov.uk 01925 442344

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Appendix 1

GLOSSARY OF TERMS

Basis Point (BP) 1/100th of 1%, i.e. 0.01%

Base Rate Minimum lending rate of a bank or financial institution in the UK

Benchmark A measure against which the investment policy or performance of a fund manager can be compared.

Bill of Exchange A financial instrument financing trade.

Callable Deposit A deposit placed with a bank or building society at a set rate for a set amount of time. However, the borrower has the right to repay the funds on pre agreed dates, before maturity. This decision is based on how market rates have moved since the deal was agreed. If rates have fallen the likelihood of the deposit being repaid rises, as cheaper money can be found by the borrower.

Cash Fund Management

Fund management is the management of an investment portfolio of cash on behalf of a private client or an institution, the receipts and distribution of dividends and interest, and all other administrative work in connection with the portfolio.

Certificate of Deposit Evidence of a deposit with a specified bank or building society repayable on a fixed date. They are negotiable instruments and have a secondary market; therefore the holder of a CD is able to sell it to a third party before the maturity of the CD.

Commercial Paper Short-term obligations with maturities ranging from 2 to 270 days issued by banks, corporations and other borrowers. Such instruments are unsecured and usually discounted, although some may be interest bearing.

Corporate Bond Strictly speaking, corporate bonds are those issued by companies. However, the term is used to cover all bonds other than those issued by governments in their own currencies and includes issues by companies, supranational organisations and government agencies.

Counterparty Another (or the other) party to an agreement or other market contract (e.g. lender/borrower/writer of a swap/etc.)

CDS Credit Default Swap – a swap designed to transfer the credit exposure of fixed income products between parties. The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. By doing this, the risk of default is transferred from the holder of the fixed income security to the seller of the swap.

CFR Capital Financing Requirement

CIPFA Chartered Institute of Public Finance and Accountancy

CLG Department for Communities and Local Government

CPI Consumer Price Index – calculated by collecting and comparing prices of a set basket of goods and services as bought by a typical consumer, at regular intervals over time. The CPI covers some items that are not in the RPI, such as unit trust and stockbrokers fees, university accommodation fees and foreign students’ university tuition fees.

DCLG Department of Communities and Local Government

Derivative A contract whose value is based on the performance of an underlying financial asset, index or other investment, e.g. an option is a derivative because its value changes in relation to the performance of an underlying stock.

DMADF Deposit Account offered by the Debt Management Office, guaranteed by the UK government.

ECB European Central Bank – sets the central interest rates in the EMU area. The ECB determines the targets itself for its interest rate setting policy; this is to keep inflation within a band of 0 to 2%. It does not accept that monetary policy is to be used to manage fluctuations in unemployment and growth

46

caused by the business cycle.

EMU European Monetary Union

Equity A share in a company with limited liability. It generally enables the holder to share in the profitability of the company through dividend payments and capital gain.

EU European Union

Fed. Federal Reserve Bank of America – sets the central rates in the USA

Floating Rate Notes Bonds on which the rate of interest is established periodically with reference to short-term interest rates

Forward Deal The act of agreeing today to deposit funds with an institution for an agreed time limit, on an agreed future date, at an agreed rate.

Forward Deposits Same as forward dealing (above).

FSA Financial Services Authority – body responsible for overseeing financial services.

Fiscal Policy The Government policy on taxation and welfare payments.

GDP Gross Domestic Product

GF General Fund

Gilt Registered British government securities giving the investor an absolute commitment from the government to honour the debt that those securities represent.

Gilt Funds Pooled fund investing in bonds guaranteed by the UK government.

Government MMF MMFs that invest solely in government securities, or reverse repurchase agreements backed by Government Securities.

HM Treasury Her Majesty’s Treasury

HRA Housing Revenue Account

IFRS International Financial Reporting Standards

LIBID London Interbank Bid Rate – LIBID is calculated through a survey of London banks to determine the interest rate which they are willing to borrow large Eurocurrency deposits.

LOBO’s Lenders Option Borrowers Option loans

Money Market Fund (MMF)

A well rated, highly diversified pooled investment vehicle whose assets mainly comprise of short term instruments. It is very similar to a unit trust, however in a MMF.

Monetary Policy committee (MPC)

Government body that sets the bank rate (commonly referred to as being base rate). Their primary target is to keep inflation within plus or minus 1% of a central target of 2.5% in two years’ time from the date of the monthly meeting of the Committee. Their secondary target is to support the Government in maintaining high and stable levels of growth and employment.

MRP Minimum Revenue Provision

MTFP Medium Term Financial Plan

Open Ended Investment Companies

A well-diversified pooled investment vehicle, with a single purchase price, rather than a bid/offer spread.

Other Bond Funds Pooled funds investing in a wide range of bonds.

PFI Private Finance Initiative

PWLB Public Works Loan Board

QE Quantitative Easing

Reverse Gilt Repo This is a transaction as seen from the point of view of the party which is buying the gilts. In this case, one party buys gilts from the other and, at the same time and as part of the same transaction, commits to resell equivalent gilts on a specified future date, or at call, at a specified price.

Retail Price Index (RPI)

Measurement of the monthly change in the average level of prices at the retail level weighted by the average expenditure pattern of the average person.

RPIX As RPI but excluding mortgage interest rate movements.

RPIY As RPI but excluding mortgage interest rate movements and changes in prices caused by changes in taxation.

Sovereign Issues (Ex UK Gilts)

Bonds issued or guaranteed by nation states, but excluding UK government bonds.

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Supranational Bonds Bonds issued by supranational bodies, e.g. European investment bank. These bonds – also known as Multilateral Development Bank bonds – are generally AAA rated and behave similarly to gilts, but pay a higher yield (“spread”) given their relative illiquidity when compared with gilts.

SORP Statement of Recommended Practice

S151 Section 151 Officer

Term Deposit A deposit held in a financial institution for a fixed term at a fixed rate.

Treasury Bill Treasury bills are short term debt instruments issued by the UK or other governments. They provide a return to the investor by virtue of being issued at a discount to their final redemption value.

UBS Union Bank of Switzerland

US United States

WARoR Weighted Average Rate of Return is the average annualised rate of return weighted by the principal amount in each rate.

WAM Weighted Average Time to Maturity is the average time, in days, till the portfolio matures, weighted by principal amount.

WATT Weighted Average Total Time is the average time, in days, that deposits are lent out for, weighted by principal amount.

WA Risk Weighted Average Credit Risk Number. Each institution is assigned a colour corresponding to a suggested duration using Sector’s Suggested Credit Methodology.

Model WARoR Model Weighted Average Rate of Return is the WARoR that the model produces by taking into account the risks inherent in the portfolio.

48

Appendix 2

49

Agenda Item 11

WARRINGTON BOROUGH COUNCIL COUNCIL – 4 December 2017 Report of :

Professor Steven Broomhead, Chief Executive

Report Author: Julie Pickles – Democratic Services Officer Contact Details: Email Address:

jpickles@warrington.gov.uk

Telephone: (01925) 443212

Ward Members:

All Wards

TITLE OF REPORT: APPOINTMENT OF MEMBERS OF THE INDEPENDENT REMUNERATION PANEL 1. PURPOSE 1.1 To appoint a person to the Independent Remuneration Panel and to extend the term of

office of three current members of the panel. 2. CONFIDENTIAL OR EXEMPT 2.1 This report is not considered to contain confidential or exempt information at this time. 3. INTRODUCTION AND BACKGROUND 3.1 In accordance with Regulation 20 of the Local Authorities (Members’ Allowances)

(England) Regulations 2003, the Council is required to establish an Independent Remuneration Panel (IRP) for the purpose of making recommendations about the Members’ Allowances Scheme. An Independent Remuneration Panel has been in operation in Warrington for a number of years in compliance with these and previous Regulations and its membership should consist of 5 independent persons.

3.2 The current Members of the IRP are:-

Mr Paul Taylor

Mrs Shirley North

Mrs Susan Robinson

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Agenda Item 11

Two members were appointed on 1 March 2010; these members are now in a second term of office. The third member was appointed at the Council meeting of 12 December 2011, leaving two vacancies for further recruitment to the panel.

3.3 The Panel are currently working towards a proposal for the members’ scheme of allowances for the period 2020 – 2024. With this in mind it is proposed that Mrs Susan Robinson and Mrs Shirley North’s term of office be extended to March 2019 (12 month extension) and Mr Paul Taylor’s term of office be extended to June 2020 (6 month extension). Ordinarily a members’ term of office would be no longer than two terms, however given the practicalities of completing the work programme it would seem sensible to extend their terms of office. This would provide some stability to the Panel during a further period of re-advertisement.

3.4 The Regulations do not specify how a local authority may go about finding members of

its IRP. A key consideration is that the membership of the Panel should be truly independent, well qualified to discharge the functions of the Panel and representative of the diversity of the local community. The Government Guidance suggests that authorities may advertise vacancies, or ask particular stakeholders to put forward candidates.

4. APPOINTMENT OF NEW PANEL MEMBERS 4.1 Experience has shown that recruitment by advertisement was costly and rarely resulted

in sufficient suitable candidates coming forward. Accordingly, officers within Democratic and Member Services have invited expressions of interest from individuals and community groups who work closely with the authority. It was felt that these groups of people would have the necessary skills and experience of the local government environment to be able to serve on the IRP, whilst maintaining the required level of independence.

4.2 During our last recruitment campaign one person has responded to the invitation to fill

the two vacant positions. Mr Alan Kemp met with officers in November 2017, on an informal basis, to discuss the role of Panel members and their responsibilities. The candidate resides within the Borough and was the former Chief Executive of The Warrington Housing Association. The prospective candidate has subsequently confirmed that they wish to seek formal appointment to the IRP and he has submitted a personal profile as background. Officers are satisfied that Mr Kemp would be a suitable person to serve on the Panel.

4.3 It is proposed that Mr Kemp is appointed to the IRP for a period of four years.

Continued officer support and a programme of training and development will be provided to ensure that all new panelists have the necessary knowledge to undertake their role effectively, Mr Kemp’s CV is available to view on request.

51

Agenda Item 11

5. SCHEME OF MEMBERS’ ALLOWANCES 2020/24 5.1 The Panel has recently commenced its work to consider recommendations for the

Scheme of Members’ Allowances for 2020/24. As in previous years, this process will involve considering a range of evidence, including financial information, peer group information, and hours worked, with a view to making formal recommendations to Council in March 2020.

6. FINANCIAL CONSIDERATIONS 6.1 The Authority may pay travelling and subsistence allowances to Panel members. The

estimated cost can be contained within the overall budget for allowances. An amount equivalent to a co-optees allowance may also be payable, but to date the Panel has determined not to request such a payment.

7. RISK ASSESSMENT 7.1 The appointment of a suitably trained Panel is necessary to ensure that the Council is

able to comply with its duty under the Regulations to have regard to IRP recommendations before making or amending an Allowances Scheme.

8. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT 8.1 Government Guidance indicates that the appointment process to the IRP must command

public confidence and be able to attract membership which is representative of the diversity of all the communities in the local authority’s area. The appointment process undertaken complies with this advice.

8.2 The Panel, in recommending a Scheme of Allowances, should consider how it may

encourage people from all walks of life to stand for public office. 9. CONSULTATION 9.1 No formal consultation has been undertaken. Appointments to the Panel are made on

an individual basis and are a matter for Council alone to determine. 10. REASONS FOR RECOMMENDATION 10.1 The proposed appointment is required to fill one of the two vacancies on the

Independent Remuneration Panel and to extend the terms of office of the current membership to enable the programme of works to continue on the scheme of allowances for 2020 – 2024.

11. RECOMMENDATION

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Agenda Item 11

11.1 That the following person be appointed to the Independent Remuneration Panel for a

period of four years commencing on 4 December 2017:-

Mr Alan Kemp 11.2 For the current members terms of office to be extended as follows;-

Mr Paul Taylor – term of office extended to June 2020 (6 months extension)

Mrs Susan Robinson – term of office extended to March 2019 (12 months extension)

Mrs Shirley North – term of office extended to March 2019 (12 months extension) 11.3 Further recruitment for the remaining post be advertised at an appropriate time. 11.4 Council formally thank members of the Independent Remuneration Panel for their time

and contribution. 12. BACKGROUND PAPERS Contacts for Background Papers:

Name E-mail Telephone

Julie Pickles jpickles@warrington.gov.uk 01925 443212

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