Issue - meetings

To receive a verbal report from the Deputy Chief Executive (s151 Officer) on progress with this project.  This may include details of any revision to the total level of funding sought following final meetings between the GP practice and NHS England Due to the timings of those meetings, a written report will not available.

The Group Manager for Financial Services informed the meeting that a report  was put before Cabinet on 25 July 2019 with a recommendation to make an advance of £2.1m for 28 years at a fixed rate of 3.75% to facilitate the construction of a GP surgery/NHS Hub at Crediton with a further £4.1m of funding (80% of costs) being provided interest-free from the NHS.

Since then the forecast costs had been updated and  contracts were in the process of being drawn up. The forecast costs had increased by £75k and as such a recommendation would be put to the Cabinet in February to increase the approval by £75k and add this to the capital programme.

She was also aware that the term of the loan was now 27 years. As part of the crystallisation of costs she was mindful that the Public Works Loan Board (PWLB) rates had increased across the board by 1%. The Deputy Chief Executive (S151) had since spoken with the contract lead and had agreed an increased rate of 4% fixed.

She informed the meeting how treasury decisions were made and that the authority would not necessarily borrow from the PWLB to fund any advance and therefore were not bound to reflect the full 1% rate increase in the offer.

She reminded the meeting of the following:

·         The authority had a first charge on the property with Estates and Technology Transformation Fund (ETTF) NHS, having a second charge.

·         State Aid issues had been explored and were not triggered.

·         External advice had been taken (Michelmores)

·         ETTF would fund 85% of the build and associated costs

·         Current estimates suggested that authority would “make” c£750k in surplus interest over the 27 year period.

·         Initial annual surplus of £42k in interest reducing to £2k in the final year (if borrowing to fund was required).

·         Approval had been requested to borrow to fund this project but internal resources would be used initially to maximise the interest surplus.

Consideration was given to:

·         the Public Works Loan Board rates

·         State Aid and advice received.

The contents of the update was NOTED.