Issue - meetings

The Executive Member for Financial Sustainability presented the recommendations in the Millstream 30 Year Business Plan and Council Cashflows report. Councillor Williamson said that Millstream had been trading for four years and as shareholder, it would have been the council’s intention to look ahead at the company’s plans for further growth, increasing its stock which it would fund through extending its borrowing from the Council, and thereby increasing the revenue flow to the Council but this was no longer possible. Nonetheless, the company was still required to update its Business Plan each year and the Council as the company shareholder were still required to approve it.

Jonathan Geall, Director of Millstream Property Investments Ltd, said that the business plan was always on the same agenda as the Council’s budget proposals given that income derived from Millstream’s activities provided an important revenue stream for the Council. He said that overthe last 12 to 18 months, there have been a number of significant changes to how the council can fund capital expenditure and Millstream’s directors have worked closely with the council’s Head of Strategic Finance and Property to assess how these various changes impact on how the council could fund Millstream and thus how the company operates.

The Director of Millstream Property Investments Ltd said that the model that the council and Millstream had used to date to acquire 17 properties and managed a further property in the council’s ownership, was no longer viable. This was because the council would now need to borrow money to lend to the company and it would require income from the company to cover the interest due on all monies lent plus the minimum revenue provision the council would need to make. The requirement to make a minimum revenue provision each year was only introduced by CIPFA after Millstream had been trading for a few years. Unfortunately, this unforeseen change to the accounting rules means that the established funding model for Millstream no longer works.

The directors together with the council’s Head of Strategic Finance and Property have explored a series of other funding models, as discussed in section four of the report; however none of these are viable. Thus, the revised business plan proposed that Millstream would not acquire or develop any new properties but continue to rent its existing portfolio in the private rental market.

Councillor Williamson proposed and Councillor Stowe seconded a motion supporting the recommendation. On being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED ­– That theMillstream Property Investment Ltd’s 2022/23 30 Year Business Plan be approved.