|
|
|
|
Contact: |
David Howells, Director of Corporate Services - tel: 023 8064 4000 ext 203 |
|
|
1 |
Introduction |
|
|
1.1 |
The Asset Management Working Group met on 14 November 2003 to consider just one item. In view of the immediate relevance to preparing the draft budget, this note of the meeting is being presented directly to the main Authority - rather than via the Finance and General Purposes Committee. |
|
|
2 |
Options for financing the Authority's vehicle replacement programme |
|
|
2.1 |
The Treasurer circulated a report setting out three available options for the future funding of the vehicle replacement programme. It was pointed out that any of these options could be used in combination. |
|
|
2.2 |
Operational leasing |
|
|
|
It was noted that in recent years the lack of sufficient basic credit approvals (BCA) and competing pressures on the revenue budget has made operational leasing the only viable funding option available to the Authority. It was appreciated that this has never been the cheapest option, and that the financial implications of existing leasing contracts (up to and including those made in the current year) will need to be accommodated in future revenue budgets over the next ten years. |
|
|
2.3 |
Acquisition through loan |
|
|
|
It was explained that introduction of the new `prudential guidelines' on capital financing (from April 2004) are likely to make this option possible, and as such it is more attractive than operational leasing. It has the advantage (over purchase from revenue) in that it would defer the potential impact on Council Tax. |
|
|
2.4 |
The Group accepted that the cheapest option in the long term would be to create a revenue fund for the vehicle replacement programme; but, to set this up - in full - from April 2004 would have a significant impact on the level of precept. |
|
|
2.5 |
The Treasurer produced a spreadsheet comparing the three options over a fourteen-year period. This demonstrated that continuing to lease vehicles is an unattractive option and not in the Authority's best financial interests. Both acquisition from revenue or from loans - or a combination of both options - were seen as acceptable ways forward, with Members preferring to introduce a fully revenue-funded programme from April 2004 if that could be accommodated in the forward budget. |
|
|
3 |
European Convention on Human Rights and the Human Rights Act 1998 |
|
|
3.1 |
The proposals within this report are compatible with the provisions of the European Convention on Human Rights and the Human Rights Act 1998 and considered in the light of the Race Relations (amendment) Act 2000. |
|
Recommendations to the Authority |
|
1 |
That the use of operational leasing of vehicles be discontinued from April 2004. |
|
|
2 |
That consideration be given to funding the vehicle replacement programme in full, and directly from the revenue budget from April 2004; or, if that is not possible - because of competing pressures on the budget - that revenue funding be phased in as soon as possible, using borrowing under the prudential guidelines to meet the shortfall. |
|
|
Section 100D - Local Government Act 1972 - background papers |
|
The following documents disclose the facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of the report. |
|
Report of the Treasurer to the Asset Management Working Group held 14 November 2003 entitled `Options for financing the Authority's vehicle replacement programme' and accompanying spreadsheet. |
|
NB The list excludes: |
|
1 Published works |
2 Documents that disclose exempt or confidential information as defined in the Act |
|
|
Secretarial/WP/Word/Corporate/HFRA 10 12 03 Asset Man DH/JMW/28/10/2003 |
