EXECUTIVE Tuesday 3rd November 2015 6.30 p.m.
EXECUTIVE BURNLEY TOWN HALL 03/11/2015 at 6.30 p.m.
This agenda gives notice of items to be considered in private as required by Regulations 5 (4) and (5) of The Local Authorities (Executive Arrangements)(Meetings and Access to Information)(England) Regulations 2012.
Members are reminded that if they have detailed questions on individual reports, they are advised to contact the report authors in advance of the meeting.
Members of the public may ask a question, make a statement, or present a petition relating to any agenda item or any matter falling within the remit of the committee.
Notice in writing of the subject matter must be given to the Head of Chief Executive’s Office by 5.00pm on the day before the meeting. Forms can be obtained for this purpose from the reception desk at Burnley Town Hall or the Contact Centre, Parker Lane, Burnley. Forms are also available on the Council’s website www.burnley.gov.uk/meetings.
AGENDA
1. Apologies To receive any apologies for absence. 2. Minutes To approve as a correct record the Minutes of the meeting held on 22nd September 2015 available at www.burnley.gov.uk) 3. Minutes of Individual Decisions To note the following Individual Executive Decisions made since the last meeting; Minute –None to date.
4. Additional Items of Business To determine whether there are any additional items of business which, by reason of special circumstances, the Chair decides should be considered at the meeting as a matter of urgency.
5. Declaration of Interest To receive any declarations of interest from Members relating to any item on the agenda in accordance with the provisions of the Code of Conduct and/or indicate if S106 of the Local Government Finance Act 1992 applies to them. 6. Exclusion of the Public To determine during which items, if any, the public are to be excluded from the meeting. 7. Public Question Time
To consider questions, statements or petitions from Members of the Public.
PUBLIC ITEMS
8. Constitutional Reporting- Executive member Appointment
To note that Councillor Wajid Khan was appointed by the Leader on 30th September 2015 to be the Executive Member for Resources and Performance Management, as reported to Full Council on the 30th September 2015. This appointment replaced the interim appointment of Councillor Mark Townsend, with the portfolio unchanged. (report enclosed)
9. Constitutional Reporting -Business Rate Pooling – Urgent Executive Delegated CEO Decision
To note that the Chief Executive made an Urgent Executive Delegated Decision on 21st October 2015 to approve the business rate pooling arrangements for the 2016/17 Financial Year (Relevant Minute and report enclosed)
10. Contaminated Land Strategy
To consider the Contaminated Land Strategy (report enclosed)
11. Treasury Management 2015/16
To consider an update on Treasury Management during 2015/16 (report enclosed)
12. Exclusion of the Public
To consider the exclusion of the public from the meeting before discussion takes place on the following items of business on the grounds that in view of the nature of the business to be transacted if the public were present there would be a disclosure to them of exempt information within the meaning of Part VA of the Local Government Act 1972.
PRIVATE ITEMS Details of any representations received by the Executive about why any of the following reports should be considered in public – None received.
Statement in response to any representations – Not required
13. Banking Contract
To approve arrangements regarding banking activities (report enclosed)
This item is private as it contains information relating to the financial or business affairs of any particular person (including the authority holding that information).
14. Senior Management Review
To consider an update top the Senior Management Review (report enclosed)
This item is private as it contains Information relating to any consultations or negotiations, or contemplated consultations or negotiations, in connection with any labour relations matter arising between the authority or a Minister of the Crown and employees of, or office holders under, the authority.
MEMBERSHIP OF COMMITTEE
Councillor Bea Foster Councillor Tony Harrison Councillor Wajid Khan Councillor Sue Graham Councillor John Harbour Councillor Mark Townsend (Chair)
PUBLISHED 26th October 2015
ITEM NO
Burnley Borough Council Contaminated Land Strategy 2015-2020
REPORT TO EXECUTIVE
DATE 3rd November 2015 PORTFOLIO Housing and Environmnet REPORT AUTHOR Jill Wolfendale TEL NO Ext 3274 EMAIL [email protected]
PURPOSE
1. To seek approval and adoption of the updated Burnley Borough Council Contaminated Land Strategy 2015-2020
RECOMMENDATION
2. That Members approve and adopt Burnley Borough Council Contaminated Land Strategy 2015-2020 (The Strategy) as set out in Appendix A to this report.
3. That Members delegate authority to Head of Governance Law and Regulation, in consultation with Executive member for Housing and Environment, to make minor changes to the strategy where necessary.
REASONS FOR RECOMMENDATION
4. The Strategy was last reviewed in 2007 and was at that time developed in line with legislation and Guidance first published in 2000. The Department of Environment Food & Rural Affairs (DEFRA) has since reviewed the Statutory Guidance to regulators which was published in April 2012. The revised Guidance gives greater clarity to regulators as to how to decide when land is and is not actually contaminated land and enables local authorities to take a more targeted approach which remains precautionary rather than a blanket approach which is over cautious. The Strategy has been updated to reflect DEFRA’s revised Guidance
SUMMARY OF KEY POINTS
5. England has a considerable legacy of historical land contamination involving a very wide range of substances. On all land there are background levels of substances, including substances that are naturally present as a result of our varied and complex geology and substances resulting from diffuse human pollution. On some land there are greater concentrations of contaminants, often associated with industrial use and waste disposal. In a minority of cases there may be sufficient risk to health or the environment for such land to be considered contaminated land
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6. Part 2A of the Environmental Protections Act 1990 provides a means of dealing with unacceptable risks posed by land contamination to human health and the environment, and enforcing authorities should seek to find and deal with such land. Under Part 2A the starting point should be that land is not contaminated land unless there is reason to consider otherwise. Only where unacceptable risks are clearly identified by a risk assessment undertaken in accordance with the Statutory Guidance, should land be considered as meeting the Part 2A definition of contaminated land.
7. The overarching objectives of the Government’s policy on contaminated land and the Part 2A regime are:
(a) To identify and remove unacceptable risks to human health and the environment. (b) To seek to ensure that contaminated land is made suitable for its current use. (c) To ensure that the burdens faced by individuals, companies and society as a whole are proportionate, manageable and compatible with the principles of sustainable development.
8. Guidance states that enforcing authorities should seek to use Part 2A only where no appropriate alternative solution exists. The Part 2A regime is one of several ways in which land contamination can be addressed. For example, land contamination can be addressed when land is developed (or redeveloped) under the planning system, during the building control process, or where action is taken independently by landowners. Other legislative regimes may also provide a means of dealing with land contamination issues, such as building regulations; the regimes for waste, water, and environmental permitting; and the Environmental Damage (Prevention and Remediation) Regulations 2009.
9. Under Part 2A , the enforcing authority may need to decide whether and how to act in situations where such decisions are not straightforward, and where there may be unavoidable uncertainty underlying some of the facts of each case. In so doing, the authority should use its judgement to strike a reasonable balance between: (a) dealing with risks raised by contaminants in land and the benefits of remediating land to remove or reduce those risks; and (b) the potential impacts of regulatory intervention including financial costs to whoever will pay for remediation (including the taxpayer where relevant), health and environmental impacts of taking action, property blight, and burdens on affected people. The authority is required to take a precautionary approach to the risks raised by contamination, whilst avoiding a disproportionate approach given the circumstances of each case. The aim should be to consider the various benefits and costs of taking action, with a view to ensuring that the regime produces net benefits, taking account of local circumstances.
10. In Burnley inspection, identification and remediation of land is usually undertaken as part of the development control process. This is recognised to be the most appropriate and efficient way to address the issues associated with contamination, with the onus being on the developer/ applicant to demonstrate the suitability of any land for redevelopment. Land is then remediated by consent.
FINANCIAL IMPLICATIONS AND BUDGET PROVISION
11. Although the Councils approach to Part 2A will normally be via the development control process, there may still be a need to investigate potential areas of contamination that
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have been notified to the Council from members of the public. In these circumstances the Council will undertake any necessary investigation to establish if contamination exists and who would be responsible for remediation. Where enforcement action is required and a remediation notice served the Council may need to carry out the remediation works at it’s own expense before seeking recovery as a civil debt. Additionally, there may be financial implications where responsibility cannot be determined and the site is declared as ‘orphaned’. In these circumstances, the financial responsibility for any remediation may fall upon the Council.
POLICY IMPLICATIONS
12. Part 2A section 78B(1) requires the local Authority to take a strategic approach to carrying out its inspection duty. This approach should be set out in a written strategy, formally adopted and published. A periodic review of the strategy must be undertaken to ensure its remains up to date. The Local authority should aim to review its strategy every 5 years.
DETAILS OF CONSULTATION
13. No formal public consultation required to adopt the strategy.
BACKGROUND PAPERS
14. None.
FURTHER INFORMATION PLEASE CONTACT: Jill Wolfendale ALSO: Karen Davies
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Burnley Borough Council Contaminated Land Strategy 2015-2020
Revised September 2015 Contents 1.0 Introduction ...... 3 1.1 Background and Regulatory Context ...... 4 1.2 Definition of Contaminated Land ...... 6 1.3 The Principle of Contamination ...... 10 Figure 1.3.1 Contamination Linkage ...... 10 1.4 Radioactive contaminated land ...... 10 1.5 Planning and Other Regulatory Regimes ...... 11 2.0 Burnley Physical & Geographical Characteristics ...... 13 2.1 Geography ...... 13 2.2 Geology ...... 14 2.3 Radioactive sites ...... 15 2.4 Key Water Resources ...... 16 2.5 Local Hydrogeology ...... 16 2.6 Ecological Receptors ...... 17 2.7 History ...... 17 2.8 Current Land Use ...... 17 3.0 Inspection Strategy ...... 17 3.1 Introduction ...... 17 3.2 Aims ...... 18 3.3 Objectives ...... 18 3.4 Identifying Sites of Potential Concern ...... 18 3.5 Suitable for Use ...... 19 3.6 The Polluter Pays Principle ...... 20 3.7 Council owned/managed land...... 20 3.8 Reactive Investigations ...... 21 3.9 Contaminated Land Enquiries ...... 21 3.10 Public Register - Contaminated Land ...... 22 4.0 Government Revised Guidance ...... 22 5.0 Review Mechanisms...... 23 5.1 Triggers for reviewing Inspection Decisions ...... 23 5.2 Reviewing the Strategy ...... 24 Table 1 Ecological system effects ...... 25 Table 2 Property effects ...... 26 Appendix 1 – Risk Prioritisation Methodology ...... 27
2 1.0 Introduction
England has a considerable industrial heritage; however a legacy of historic Industrial enterprise and waste disposal is polluted land that often needs skilled and methodical recovery and remedial work to bring it back into everyday use. The Government‟s policy on dealing with this legacy is through the Contaminated Land regime under Part 2A of the Environmental Protection Act 1990.
Under Part 2A each local authority has a duty to inspect its area for contaminated land. Burnley Borough Council published its first contaminated land inspection strategy in 2003 with a revision in 2007 detailing the process it would follow to achieve this. This document replaces the November 2007 revised inspection strategy and outlines;
The background information which has been considered during the development of the Inspection Strategy The Inspection Strategy itself and what Burnley Borough Council aims to achieve through its implementation The procedures for reviewing the strategy.
Enquiries about this Inspection strategy should be addressed to:
Environmental Health & Licensing 1st Floor Parker Lane Burnley Lancashire BB11 2DT Tel:01282 477284 e-mail: [email protected]
3 1.1 Background and Regulatory Context
This section provides an overview of the contaminated land regime – the government objectives behind it, how it will be regulated and what the principal local authority duties are.
Part 2A of the Environmental Protection Act 1990 came into force on the 1st April 2000. This established a new regulatory system for the identification and remediation of land contamination
Guidance in the form of DETR circular 02/2000 contained advice on how regulators should implement Part 2A in line with the Contaminated Land (England) Regulations 2000. At that time all local authorities had a statutory duty to prepare a Contaminated Land Inspection Strategy.
Since this initial guidance was published various changes have been made to the statutory guidance and regulations .The key changes that were introduced were in 2006 by the Contaminated Land (England) Regulations 2006 and the inclusion of radioactive land under the Radioactive Contaminated Land (Enabling Powers) (England) Regulations 2006.
In April 2012 the government published additional guidance on contaminated land Environmental Protection Act 1990 Part 2A Contaminated land Statutory Guidance, April 2012. The Guidance gives further explanation as to how local authorities should implement the regime, including how to go about deciding whether land is contaminated land in the legal sense of the term. In addition it elaborates on the remediation provisions of Part 2A, including the goals of remediation, and how regulators should ensure that remediation requirements are reasonable. This Guidance also explains specific aspects of the Part 2A liability arrangements, and the process by which the enforcing authority may recover the costs of remediation from liable parties in certain circumstances.
The Government identified that England has a considerable legacy of historical land contaminated. Part 2A therefore provides a means by which this land can be identified and remediated should it pose a significant risk to health or the environment.
4 The Government‟s key objectives driving the contaminated land regime are;
to identify and remove unacceptable risks to human health and the environment
to seek to ensure that contaminated land is made suitable for its current use
to ensure that the burdens faced by individuals companies and society as a whole are proportionate, manageable and compatible with the principles of sustainable development.
The Government considers the most effective way of delivering these objectives to be through the application of the „suitable for use‟ approach. This recognises how risks presented by land contamination vary depending on what the land is being used for, as well as its environment setting.
The „suitable for use‟ approach ensures that where unacceptable risks to human health or the environment are identified remediation requirements should be set on the basis of the current use or proposed use as well as the circumstances of the land. Risks will therefore always need to be assessed on a site-specific basis.
The Government requires a pragmatic view in relation to contaminated land with a balance between precaution and over precaution be struck when assessing land that may be contaminated.
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1.2 Definition of Contaminated Land
Section 78A (2) of Part 2A of the Environmental Protection Act 1990 defines contaminated land as: Any land which appears to the local authority, in whose area it is situated, to be in such a condition, by reason of substances in, on or under the land that:
(a) Significant harm is being caused or there is a significant possibility of such harm being caused, or -
(b) Significant pollution of controlled waters is being caused, or there is a significant possibility of such pollution being caused.
Section 78A (4) of Part 2A of the Environmental Protection Act 1990 defines „Harm‟ to include harm to the health of living organisms or other interference with the ecological systems of which they form part and, in the case of man, includes his property.
Under section 78A(9) of Part 2A the term “pollution of controlled waters” means the entry into controlled waters of any poisonous, noxious or polluting matter or any solid waste matter. The term “controlled waters” in relation to England has the same meaning as in Part 3 of the Water Resources Act 1991, except that "ground waters" does not include waters contained in underground strata but above the saturation zone. Controlled waters are out to 3 miles, estuaries (also referred to as transitional waters), rivers, lakes, ponds and ground water.
The 2012 Statutory Guidance provides additional definition to the terms „Significant Harm,‟, „Harm‟, „Significant Possibility…‟ and „Significant pollution of Controlled waters‟
Land meeting any of the above definitions is hereon referred to as contaminated land
6 1.3 The Principle of Contamination
For a relevant risk to exist there needs to be one or more contaminant (source)- pathway-receptor linkages by which a relevant receptor might be affected by the contaminants in question. In other words, for a risk to exist there must be contaminants present (in, on or under the land) in a form and quantity that poses a hazard, and one or more pathways (via air, soil or water) by which they might harm people, the environment, property or significantly pollute controlled water.
Figure 1.3.1 Contamination Linkage
Source Pathway Receptor
1.4 Radioactive contaminated land In 2006 and 2007 Part 2A of the Environmental Protection Act 1990 was extended to include radioactive contaminated land, including radioactivity originating from the nuclear industry. Radioactive contaminated land is defined as;
„Any land which appears to the local authority in whose area it is situated to be in such a condition, by reason of substances in, on or under the land that:- (a) Harm is being caused or (b) There is a significant possibility of such harm being caused,
The extended regime does not apply to radioactivity on land causing significant harm to the wider environment, naturally occurring radon gas, radioactivity on land within the boundary of a nuclear licensed site and risks arising from the change in the way land contaminated with radioactivity is used (planning process).
10 The presence of radionuclides does not automatically mean land is radioactive contaminated land. For land to be so determined a significant pollutant linkage must be present. Statutory guidance has identified levels of radioactivity that should be considered as causing harm:- An effective dose of 3mSv or more per year, An equivalent does to the lens of the eye of 15mSv per year an equivalent dose to the skin of 50mSv per year.
1.5 Planning and Other Regulatory Regimes In addition to Part 2A there are a number of other existing regulatory regimes which will continue to address and deal with land contamination issues.
In 2012 the Government published the national planning policy framework, this document set out the Government‟s aims and objectives for the planning process and within it identified land contamination as a material planning consideration. Therefore the development or redevelopment of land during the planning or building control processes continues to be the primary mechanism for ensuring remediation of contaminated land with the Borough of Burnley, as with the rest of the England.
The Environmental Damage (Prevention and Remediation) Regulations, Integrated Pollution Prevention and Control (IPPC) and waste management permitting regimes provide powers to deal with land contamination resulting from breaches of permits at existing sites. The water resources Act 1991 can also be applied to deal with certain cases of water pollution not covered by Part 2A.
The Environment Agency has a role in assisting local authorities, providing site specific local guidance and dealing with „Special Sites‟ and publishing periodic reports on the state of contamination nationally.
A „Special Site‟ must be declared in conjunction with the Environment Agency when a local authority identifies a Contaminated Land site which is already regulated, where there are issues of national security or where the Environment Agency has particular expertise. The duties under Part 2A then fall to the Environment Agency.
11
Special sites are defined by regulations and generally include:
Prescribed industrial processes already regulated
Certain specified industrial processes (such as petrochemical plants and explosive manufacturers)
Sites occupied by the MOD, or at any time for the manufacture of chemical, biological weapons or nuclear activities Places where drinking water is abstracted Controlled waters.
The Building Control department has a duty to ensure that all buildings are built to current Building Regulations as a minimum. The Building Regulations 2010 require developers to ensure that any structure is built on land which is: Reasonably free from any material that might damage the building or affect its stability
Reasonable precautions shall be taken to avoid danger to health and safety caused by contaminants on or in the ground covered and any land associated with the building
Adequate sub-soil drainage shall be provided if it is needed to avoid o The passage of ground water o Damage to the building, including damage through the transport of waterborne contaminants to the foundations of the building.
12 2.0 Burnley Physical & Geographical Characteristics
2.1 Geography Burnley is situated in the heart of East Lancashire in the shadow of Pendle Hill and surrounded by hills and moorland. The borough adjoins the local authorities of Pendle to the northeast, Calderdale MBC to the southeast, Rossendale BC to the south, and Hyndburn BC to the southwest, and Ribble Valley to the northwest. It is divided into 15 Wards and served by 43 councillors. The Borough covers an area of 11,070 hectares with a population of around 91,000.
Figure 1: Ordnance Survey Map of Borough
The M65 cuts through the northern boundary of the Borough originating from its start in Colne down towards Hapton following roughly the line of the Leeds and Liverpool canal. Much of the area to the south and west of the town of Burnley is rural, with upland moors and villages of Harle Syke, Worsthorne and Dunnockshaw. The east of Burnley is more widely developed and it is here where the Borough‟s second town Padiham is situated. The River Calder and its tributaries leave the district through the town of Padiham.
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2.2 Geology The geology of Burnley is quite diverse the strata were formed in the carboniferous (coal forming) age approximately 350-270 million years ago, and can be divided into three sets or series: • The Carboniferous limestone series • The Millstone Grit Series • The Coal Measure Series
Limestone occurs beyond Pendle Hill in the area around Clitheroe and the Millstone grits form an almost complete circle around Burnley and make up the hills, which surround the town. This rock is very extensive in East Lancashire and was quarried in large amounts.
Figure 2: British Geological Society Bedrock Formation
After the Millstone Grits, the coal measures were formed from swamps and various layers of mud, sand and peat sank below the surface to form rock, the peat turned into coal seams. The Lower Coal Measures outcrop as an “eye” at the central part of the area, with a main Colne – Blackburn axis.
A major topographical feature, the Burnley syncline (downfold) lies within this series. This unit outcrops over almost the entire area of the Borough. A smaller outcrop of Millstone Grit is present as a north to south-orientated strip along the eastern boundary of the Borough. Drift cover over the Carboniferous series is absent on higher ground to the south and east of the borough. Where present drift cover is mainly glacial boulder clay and due to its low 14 permeability will afford some protection of the underlying aquifer from pollution.
Peat occurs as relatively extensive deposits on the Moors along the southern and eastern boundaries of the Borough. There are more permeable deposits, which can act as “minor aquifers” which are the alluvium and terrace deposits along the River Calder and its tributaries and a small number of glacial sand and gravel exposures. All coal seams in East Lancashire are known as “mines” e.g. Union Mine in Burnley. Thickness varies between 1.5 metres and about 2.5cms. The finest sections in the area occur in Cliviger Valley between Cornholme and Towneley, notably on the northeastern escarpment of Thieveley Scout. Coal was very important to Burnley and there were many mines in and around the area. In 1957 there were as many as 16 collieries, these were: Figure 3: Collieries Important to Burnley
• Bank Hall • Hill Top • Calder • Huncoat • Copy • Old Meadows • Deerplay • Reedley • Fence no 2 • Salterford • Fir Trees • Scaithcliffe • Grimebridge • Thorney Bank • Hapton Valley • Wood End
Some coal was also removed by open cast techniques in Padiham, Deerplay, Ightenhill and Ridge areas of Burnley. Mudstones and shale‟s found within the coal measures were used in the making of brick; also, fireclay was quarried and used in making fireproof bricks.
Major fold structures within the area include the north-easterly trending Ribblesdale folds, the northerly trending Pennine anticline (up fold) and the Rossendale anticline to the south. The Burnley coal measures lie between the three anticlines.
2.3 Radioactive sites Radioactive sites are identified and investigated in much the same way as any other potentially contaminated site. Where identified radioactive contaminated land remediation should normally include demarcation of the site, arrangements for monitoring and controlling access to the site. The broad aim of remediation should be: (a) to remove identified significant contaminant linkages, or permanently to disrupt them to ensure they are no longer significant and that risks are reduced to below an unacceptable level; and/or (b) to take reasonable measures to remedy harm that has been caused by a significant contaminant linkage There are no known historic radioactive sites within the borough of Burnley.
15 2.4 Key Water Resources United Utilities supply mains water in the Borough. Several pumping stations extract water for the public supply. Additionally, currently there are known to be 113 private water supplies supplying 48 residential properties, plus another 40 properties with their own single source supply.
These reservoirs, springs and boreholes are classed as receptors. All rivers and their tributaries are Controlled Waters and are classed as receptors.
2.5 Local Hydrogeology There are approximately 64 licensed groundwater extractions in Burnley and it is accepted that due to an increasing demand for water new sources are constantly being licensed.
There are no major aquifers within the boundaries of the Borough all ground water resources are located within minor aquifers. These minor aquifers are solid rocks of the Carboniferous age comprising of the Coal Measures and Millstone Grit Series and unconsolidated drift (superficial) deposits.
A major extraction with designated Source Protection Zone is located at Worsthorne and the Source Protection Zone for a major extraction at Gambleside; located just outside the Borough boundary; extend into Burnley Borough east of Dunnockshaw. Both these major sources extract from the Lower Coal Measures.
The majority of the groundwater flow in the solid rock will be concentrated as fissure flow within the sandstone units of the Coal Measures and the grit stone and flag units of the Millstone Grit. These units can be considered as individual minor aquifers separated by shale / mudstone units.
Groundwater levels in the sandstone and flag units will be variable and may reach ground level giving rise to springs. In the undisturbed Coal Measure strata most of the groundwater is confined within the sandstone units but where mining has taken place the permeability of the whole sequence may be greatly and permanently modified.
During the workings of the mines the groundwater levels were artificially lowered to enable mining to take place once this dewatering stopped, the ground water would recover to near natural levels again. However, recovery in certain areas may never be complete. 16
2.6 Ecological Receptors
Certain ecological systems are defined in the legislation as requiring specific protection. Within the Borough, there is one Site of Special Scientific Interest / Special Protection Area in the South Pennine Moors. There are also three regionally important geological sites at Scout - Dodbottom Wood, Thieveley Scout, Copy Clough, Towneley and Hurstwood Sheddon.
Other categories of ecological sites, which are important in the Borough but are not included within the legislation, include 42 Regional Biological Heritage Sites (RBHSs). These are listed in the Burnley Local Plan.
2.7 History Burnley was a loose collection of settlements set in the Brun and Calder Valley surrounded by moorland. Early development was slow until rapid growth was created by the textile industry. Originally, this was based on wool, but then superseded by cotton spinning, and then weaving. This growth was concentrated near the valley bottoms where mills used the river to power equipment and where the canal, rail and early road links aided the transportation of goods. Coal mining and engineering as well as a relatively small calico printing trade also supported Cotton.
2.8 Current Land Use
Today Burnley is largely a developed area with a high population density. It has retained some of the historic industrial processes with a mixture of industries, and residential areas, with a number of historic open spaces. Burnley‟s current significant employment areas include the service sector, aerospace, mechanical and electrical engineering, textiles and the clothing industries.
3.0 Inspection Strategy
3.1 Introduction Part 2A section 78B(1) requires the local Authority to take a strategic approach to carrying out its inspection duty. This approach should be set out in a written strategy, formally adopted and published. A periodic review of the strategy must be undertaken to ensure its remains up to date. The Local authority should aim to review its strategy every 5 years.
The previous sections outlined the Council‟s duties and the unique characteristics of the 17 Burnley area. All of these factors play a crucial part in determining the Council‟s strategic approach to inspection and identification of contaminated land.
Burnley Council‟s key aims and objectives are;
3.2 Aims
• To achieve environmental Improvement • To encourage regeneration and redevelopment • To fulfil the council's responsibilities with respect to implementing environmental legislation • To raise awareness and promote understanding of the land contamination • To meet the statutory obligation placed on the Council to produce a written strategy under Part 2A • To encourage voluntary remediation
3.3 Objectives
• Identify those sites where land contamination present unacceptable environmental risks and ensure remediation takes place • Identify contaminated sites where regeneration and redevelopment could facilitate remediation. Enable informed decisions regarding future land use • Ensure the inspection strategy and its implementation meets the requirements of Part 2A • Encourage a proactive approach amongst landowners and potential polluters towards investigation of contamination
3.4 Identifying Sites of Potential Concern
All local authorities are required to adopt a strategic approach to the identification of contaminated land within their area. The statutory guidance requires that this approach should be rational, ordered and efficient and must take account of local circumstances
During the production of the 2003 & 2007 Strategy document Burnley Council had dedicated Contaminated Land Officers. Part of their role was to undertake the identification and prioritisation of potentially contaminated sites. This involved the following steps. Identification of sites Collection of all known site information
Collation of information in database format 18 Assessment of risk posed by sites and attach a numerical value Prioritise sites in order of numerical importance Review and refine further site information Attach information to overlays on Geographic Information System Take appropriate and proportionate action
None of the sites in Burnley were identified as potential special sites. Sites identified remain on the database for future reference. The information on overlays is used as a basis for information on potentially contaminated sites; conditions for investigational work on sites are being stipulated on planning on decision notices.
The scoring system used was the Manchester Area Pollution Council (MAPAC) allowing the site to be easily graded on the risk of potential contamination within an access database. The MAPAC methodology can be seen in Appendix 1
Since the production of the 2007 Strategy there has been substantial redevelopment within the Borough for example some of the larger developments are;
Burnley Technical College - Built on the site of previous Manufacturing industry and Industrial Mills UCLAN Burnley College - Built on former waste management/ landfill site Burnley Bridge Development - new office and warehouse development built on the site of industrial and manufacturing works. All these sites have undergone further investigation and remedial works were undertaken by developers where required.
Prioritised sites will be reviewed in light of the revised guidance and harm categories outlined in Section 5 and evaluate sites that have been redeveloped/ developed since 2007 and re- categorise if necessary.
3.5 Suitable for Use
The "suitable for use" approach focuses on the risks caused by land contamination and recognises that the risks presented by any given level of contamination will vary greatly according to the historical use of the land and a wide range of other factors, such as the underlying geology and hydrogeology of the site. Risks therefore need to be assessed on a site by site basis balanced against the intended reuse or existing use of the land. 19
This approach recognises that the risks from contaminated land can be satisfactorily assessed only in the context of the specific uses of the land, whether current or proposed use. This is recognised to be the most appropriate and efficient way to address the issues associated with contamination, with the onus being on the developer/ applicant to demonstrate the suitability of any land for redevelopment. Land is then remediated by consent
This strategy of 'suitable for use' and remediation by consent will continue going forward. We will work in accordance with the revised Defra guidance in relation with the future use of any potentially contaminated sites which states;
"When considering risks in relation to any future use or development which falls within the description of a “current use”, the local authority should assume that the future use or development would be carried out in accordance with any existing planning permission. In particular, the authority should assume: (a) That any remediation which is the subject of a condition attached to that planning permission, or is the subject of any planning obligation, will be carried out in accordance with that permission or obligation. (b) Where a planning permission has been given subject to conditions which require steps to be taken to prevent problems which might be caused by contamination, and those steps are to be approved by the local planning authority, that the local planning authority will ensure that those steps include adequate remediation"
3.6 The Polluter Pays Principle
Establishing who is responsible for the remediation of a site, where risks from contamination are unacceptable, is an important element of the Part 2A regime. Where possible the „polluter pays‟ principle will be followed, whereby the person who caused or knowingly permitted the contamination will be the appropriate person to cover the cost of remediation.
3.7 Council owned/managed land
The Council owns and manages land, some of which is subject to potential contaminative former uses. These sites have been identified and added as an overlay to GGP. This allows identification of any overlap in sites of potential concern and council owned land. The Council 20 takes its obligations under Part 2A seriously and will act responsibly.
3.8 Reactive Investigations
Although the Councils approach to part 2A will be via the development control process, there may still be a need to investigate potential areas of contamination that have been notified to the Council from members of the public. In these circumstances the Council will undertake any necessary investigation to establish where there is any contamination and who is responsible for the remediation.
However, there are possible financial implications where those responsible for the land cannot be determined. In the case of these 'orphaned sites' financial responsibility for remediation may fall to the council.
Should land be determined as contaminated Land, the Council will seek to have the land remediated to remove significant pollutant linkages identified. If necessary a remediation notice will be served. At each stage of the detailed inspection process relevant stakeholders will be informed on the progress of the investigation and the any planned future action.
With this in mind the Council is aware of the need to avoid alarm and potential blight due to the creation of unnecessarily high perceptions of risk when communicating information to the public about land contamination issues. The councils statutory duties and the reasons for requiring further information will be clearly explained in all communication in-line with the guidance presented in the SNIFFER publication „Communication Understanding of Contaminated Land Risks‟ (2010).
3.9 Contaminated Land Enquiries The introduction of the Freedom of Information Act 2005 and the Environmental Information Regulations 2004 gave the council an obligation to disclose information held on file. The Environmental Protection Team holds a range of information which is available to interested parties. In brief, this includes; Information relating to the status of a site under Part 2A (the Contaminated Land legislation) Information about the historical uses of a site Information about contamination issues in the planning history of a site
The environmental health department regularly gets requests for environmental information that we hold in relation to particular sites. We will continue to disclose all information we hold on the 21 site/ area concerned, but there is no requirement for us to interpret this data.
3.10 Public Register - Contaminated Land
Part 2 A and The Contaminated Land (England) Regulations 2006 requires the enforcing authority to keep a public register, the information recorded should include; remediation notices remediation declarations appeals against remediation remediation statements And other information relating to remediation.
This register is maintained and updated and is available for the public to view, subject to prior appointment, at offices of Environmental Health
4.0 Government Revised Guidance
In April 2012 the Government released its revised guidance on contaminated land. As part of this guidance the Government introduced four categories to aid local authorities in deciding whether or not land is contaminated land on grounds of significant possibility of significant harm to human health, the categories ranged from 1 to 4 are explained below;
Of the four categories sites falling within category 1 & 2 would include land that is capable of being determined as contaminated land on the grounds of significant possibility of significant harm while sites falling within categories 3 & 4 would not be capable of being determined as such.
For Human Health Category 1 sites are those sites where it can be assumed that a significant possibility of significant harm exists, based on sound knowledge from similar sites across the country, or evidence exists that significant harm has already been caused.
To the other end of the spectrum Category 4 sites are those where the local authority should not assume that the land poses a significant risk of significant harm. This decision can be made at any stage of the investigation process as soon as evidence is available. 22
The following types of land should be regarded as category 4 sites:
Land where no relevant pollutant linkage exists
Land where there are only normal levels of contamination in the soil
Land that has been excluded from further investigation as levels of contaminants do not exceed Generic Assessment Criteria Land where estimated levels of exposure form a small portion of exposure receptors would usually receive from environmental exposure.
For land that cannot be placed in Category 1 or 4 further investigation is required in order that it can be placed in either category 2 and therefore determined as contaminated land or category 4 and therefore not so determined.
Land should be placed in category 2 where the local authority has sufficient evidence to consider a strong case exists that the land poses a significant possibility of significant harm. Whereas land should be placed in category 3 where there is a strong case that the land does not pose a significant possibility of significant harm. This may include land were the risk is not low but regulatory intervention under Part 2A is not warranted.
For non-human receptors local authorities should only have regard to those receptors identified within the guidance (reproduced in Tables 1 and 2 within the report). (reference: Contaminated Land Statutory Guidance www.defra.gov.uk April 2012)
5.0 Review Mechanisms
The review process is an essential part of the contaminated land regime. There is a possibility that it could be seen as having a „diminished value‟ as a result of a contaminated land classification. Therefore it is essential that the any designation or publication of facts relating to site are accurate and capable of standing up to intense scrutiny in the event of an appeal
5.1 Triggers for reviewing Inspection Decisions
This Strategy outlines the general approach to be taken in inspecting land. In certain circumstances inspections will occur outside the general framework, and previous decisions may have to be reviewed. Such events include (without limitation) 23
Unplanned episodes such as flooding. Fire, spillages etc
Proposed changes in the use of land or adjacent land
New information from other statutory bodies, landowners, members of the public etc.
Identification of localised health effects, which may be related to the land in question
Introduction of new receptors – e.g. if housing is to be built on a potentially contaminated site, designation of a new protected ecosystem, persistent trespass onto a site by young people
Supporting voluntary remediation – e.g. a potentially liable party wishing to undertake clean up before their land has been inspected by the local authority
Identification of localised health effects which appear to relate to a particular area of land
While these occurrences may trigger non-routine inspections, if this strategy is to prove effective, they must not be allowed to significantly interfere with the general inspection framework. It will be important to consider this issue in all strategy reviews.
In addition there may be occasions where the findings of previous inspection decisions should be reviewed. This might occur, for example, if there were:
Significant changes in legislation
Establishment of significant case law or other precedent
Revision of guideline values for exposure assessment It is important therefore that all decisions are made and recorded in a consistent manner that will allow efficient review.
5.2 Reviewing the Strategy
It is intended that the strategy will be reviewed every 5 years but if significant changes to the strategy are considered necessary, such findings will be reported including any recommendations to review the strategy within that time. It is considered to be the most efficient and effective way of not only making sure the strategy is up to date and reflects current practices, but also that it is realistic and achievable
24 Table 1 Ecological system effects
Relevant types of receptor Significant harm Significant possibility of significant harm
Any ecological system, or living The following types of harm Conditions would exist for organism forming part of such a should be considered to be considering that a significant system, within a location which is: significant harm: possibility of significant harm exists to a relevant • a site of special scientific interest • harm which results in an ecological receptor where (under section 28 of the Wildlife and irreversible adverse change, or the local authority considers Countryside Act 1981) in some other substantial that: adverse change, in the a national nature reserve (under • functioning of the ecological significant harm of that s.35 of the 1981 Act) • system within any substantial description is more likely • a marine nature reserve (under s.36 of part of that location; or than not to result from the 1981 Act) the contaminant linkage harm which significantly • in question; or • an area of special protection for affects any species of birds (under s.3 of the 1981 Act) special interest within that • there is a reasonable location and which possibility of significant • a “European site” within the endangers the long- term harm of that description meaning of regulation 8 of the maintenance of the being caused, and if that Conservation of population of that species at Habitats and Species Regulations 2010 harm were to occur, it would that location. result in such a degree of • any habitat or site afforded policy damage to features of protection under paragraph 6 of In the case of European special interest at the Planning Policy Statement (PPS 9) on sites, harm should also be location in question that nature conservation (i.e. candidate considered to be significant they would be beyond any Special Areas of Conservation, harm if it endangers the practicable possibility of potential Special Protection Areas and favourable conservation status restoration. listed Ramsar sites); or of natural habitats at such locations or species typically Any assessment made for any nature reserve established • found there. In deciding what these purposes should take under section 21 of the National constitutes such harm, the local into account relevant Parks and Access to the authority should have regard to information Countryside Act 1949. the advice of Natural England for that type of contaminant and to the requirements of the linkage, particularly in relation Conservation of Habitats and to the ecotoxicological effects Species Regulations 2010. of the contaminant.
25 Table 2 Property effects
Relevant types of receptor Significant harm Significant possibility of significant harm
Property in the form of: For crops, a substantial diminution in yield or Conditions would exist for other substantial loss in their value resulting from considering that a significant • crops, including timber; death, disease or other physical damage. For possibility of significant harm domestic pets, death, serious disease or serious exists to the relevant types • produce grown domestically, or physical damage. For other property in this of receptor where the local on allotments, for category, a substantial loss in its value resulting authority considers that consumption; from death, disease or other serious physical significant harm is more damage. likely than not to result from • livestock; the contaminant linkage in • other owned or The local authority should regard a substantial question, taking into account domesticated animals; loss in value as occurring only when a substantial relevant information for that proportion of the animals or crops are dead or type of contaminant linkage, wild animals which are • otherwise no longer fit for their intended purpose. particularly in relation to the the subject of shooting or Food should be regarded as being no longer ecotoxicological effects of the fishing rights. fit for purpose when it fails to comply with the contaminant. provisions of the Food Safety Act 1990. Where a diminution in yield or loss in value is caused by a contaminant linkage, a 20% diminution or loss should be regarded as a benchmark for what constitutes a substantial diminution or loss.
In this section, this description of significant harm is referred to as an “animal or crop effect”.
Property in the form of Structural failure, substantial damage or Conditions would exist for buildings. For this purpose, substantial interference with any right of considering that a significant “building” means any occupation. The local authority should regard possibility of significant harm structure or erection, and any substantial damage or substantial interference as exists to the relevant types part of a building including occurring when any part of the building ceases to of receptor where the local any part below ground level, be capable of being used for the purpose for authority considers that but does not include plant or which it is or was intended. significant harm is more machinery comprised in a likely than not to result from building, or buried services In the case of a scheduled Ancient Monument, the contaminant linkage such as sewers, water pipes substantial damage should also be regarded as in question during the or electricity cables. occurring when the damage significantly impairs expected economic life of the the historic, architectural, traditional, artistic or building (or in the case of a archaeological interest by reason of which the scheduled Ancient Monument monument was scheduled. the foreseeable future), taking into account relevant In this Section, this description of significant harm information for that type of is referred to as a “building effect”. contaminant linkage.
26 Appendix 1 – Risk Prioritisation Methodology
The table below details how this was achieved; the Manchester Area Pollution Advisory Council (MAPAC) produced the scoring system.
Predominant Land Use Classification LUC Perceived Risk Category Risk Score
Asbestos manufacture, abrasives and related products. ML Very High 50 Chemical works (organic & inorganic)
Manufacture of cosmetics, bleaches, manure, fertilisers & pesticides, detergents, disinfectants, bleach, oil, organic based pharmaceuticals, other chemical products including glues, CH recording tapes, photographic film.
Dyes and pigments. DY
Paint, varnishes, printing inks, mastic, sealants and creosotes. PA
Unspecified chemical works.
Radioactive materials processing and disposal. RM
Gas works, coke works, coal carbonisation and similar sites. GA Production of gas from coal, lignite, oil or other carbonaceous material other than waste.
Refuse and waste disposal sites, including hazardous wastes, RF incinerators, sanitary depots, drum and tank cleaning, solvent recovery.
Oil refining and bulk storage, bulk storage of oil and petrol. LL
Gasometers, which are, not gas works. LL
Civilian manufacture and storage of weapons, ammunition, explosives and rockets including ordnance. MG
All military establishments including firing ranges (if not MD specified as civilian)
Landfill sites – known to be actively producing gas. LA Abattoirs and animal slaughtering. AB
Animal products processing into animal by-products e.g. soap, AN candles and bone works. High 40 Gelatine and glue works. TY Tannery, leather goods and skinnery, knackers yards, rendering plants and meat processing plants.
Engineering (heavy, mechanical, electrical and general).
Manufacturing of distribution, telecoms, medical, navigation, HE metering and lighting equipment.
Manufacture and repair of ships, aerospace, rail engines and HT rolling stock etc.
Heavy products manufacture – rolling and drawing of iron, steel HM and ferroalloys, including tube works.
Manufacture of electrical and electronic equipment. HS
Manufacture of cars, lorries, buses, motorcycles, bicycles. LT
Manufacture of engines, building and general industrial machinery including nuts and bolts, gas fittings, wire rope/cable MA and ordnance accessories.
Unspecified engineering works.
Metal smelting and refining. Includes furnaces, forges and blacksmiths, electroplating, FY galvanising, anodising and finishing works.
Ferro and aluminium alloys-manganese works, slag works. PL
Precious metal recovery works.
Recycling of metal waste including scrap yards and car SP breakers.
Natural and synthetic rubber products including tyres and RB rubber products.
Tar, bitumen, linoleum, vinyl and asphalt works.
Manufacture of pulp, paper and cardboard. PD
Manufacture of packaging and paper products. PR Textile and dye works. TX
Manufacture of natural and man made textiles and textile products including rope. Timber treatment works WD Underground storage tanks on site UST Landfill site – strongly suspected to be producing gas, based on available information on available information on age and LB content of fill, includes post 1930s suspected landfill sites.
Airports and similar (air and space transport). AP Medium 30 Concrete, ceramics, asphalt, cement and plaster works. CE Includes clay bricks, tiles, brick kilns, brickfields and associated CR clay extraction pits, concrete, lime and plaster products, lime kilns, tableware and other ceramics.
Dry cleaners and laundries (larger scale, not usually „High LY Street‟). Glass and glass products manufacture. GL Photographic processing.
Coal storage/depot. Areas of coal mining and the manufacture CC of coke and charcoal, including associated surface activities in the area, coal mine shafts. Areas of mining including single or CY groups of shafts other than coal, levels, adits and areas associated with mineral railways. MN
Extraction industries including extraction of alluvial sediments (sand, stone, clay, peat, marl and gravel)
Quarrying of all stone and ores including opencast mining and slant workings. QU
Slate and slab works, flint works and stone yards, excludes coal mining.
Electrical generation and distribution including large transfer PW stations, power station (excluding nuclear power stations), electrical sub station.
Batteries, accumulators, primary cells, electrical motors, BT generators and transformers.
Printing of newspapers. NW Paper printing works, bookbinding and other printing works (excludes „High Street printers‟). PN Railway land including yards, sidings and track. RW
Sale of automotive fuel includes road vehicle fuelling, transport FU depots, road haulage and commercial vehicle fuelling, local authority yards and depots.
Repair and sale of cars and bikes, parts and motorway GG services.
Transport depots, including road haulage, corporation yards DP and fire stations. Sewage treatment works and sewage farms. Sewage, septic tanks, effluent and filter beds. SW
Timber products manufacture includes sawmills, wood WD products, timber yards (excludes timber treatment)
Waste transfer stations WTS
Unspecified works, factory or mill. Unspecified industry where there is no label or information. UN
Landfill site – gas production is possible, based on historical map evidence of in filled quarry, water body or other void LC generally in filled before 1930s.
Manufacture of plastic products (moulding and extrusion), PS building products, fibreglass and fire glass resin. Medium / Low 20
DK Dockyards and wharves.
Boat building, wharf and quays, cargo/transport-handling facilities (marine and inland).
Food and drink processing, including large-scale diaries and FD corn/flour mills.
Brewing and malting. BW
Spirit distilling and compounding. DL Cemetery, modern burial ground and graveyard. GV
All hospitals including sanatoriums but not lunatic asylums. HL Laboratories.
Unspecified warehouse. UN In filled features including ponds, reservoirs, canals, mill races.
Historical surface water features including marshes. WB Suspected disturbed ground where changes in landform features could indicate filling.
Landfill site – gas production is possible, based on available information on age and content fill. LD
References: Syms 1998; DoE Profiles, 1996, historical land use classification used by Landmark Ltd in their land use database (comprising digitised land use from 1:10360 and 1:10,000 scale maps) Liverpool City Council, 2002. Extract from PG01 MAPC S. .Pickford
ITEM NO
REPORT TO EXECUTIVE
DATE 3rd November 2015 Reources and Performance PORTFOLIO Management REPORT AUTHOR David Donlan TEL NO 01282 477172 EMAIL [email protected]
2015/16 Treasury Management Mid-Year Report
PURPOSE
1. To report treasury management activity for the period 01/04/15 to 30/09/15.
RECOMMENDATION
2. Members of Executive are requested to;
Note the Treasury Management activities undertaken during the period 1st April to 30th September 2015, and;
That Full Council be recommended to:-
Endorse the mid-year update on Treasury Management Strategy for 2015/16 in compliance with the requirements of the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management.
REASONS FOR RECOMMENDATION
3. To inform members of the treasury management activity in the first half of 2015/16 and to fulfil statutory and regulatory requirements.
SUMMARY OF KEY POINTS
4. Background
The Council operates a balanced budget, which broadly means cash raised during the year will meet its cash expenditure. The first main function of treasury management operations is to ensure this cash flow is adequately planned, with surplus monies being invested in low risk counterparties, providing adequate liquidity initially before considering maximising investment return.
The second main function of the treasury management service is to ensure the funding of
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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 commitments. This management of longer term cash may involve arranging long or short term loans, or using cash flow surpluses, and, on occasions any current debt may be restructured to meet Council risk or cost objectives.
Treasury management is defined as:
“The management of the Council’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.”
The monitoring requirements for treasury were set out in the report which included both the Treasury Management Strategy Statement for 2015/16 and the Prudential and Treasury Indicators for 2015/16 – 2017/18, approved by Full Council on the 25th February 2015.
5. Introduction
The Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Treasury Management 2011 was adopted by this Council on the 23rd February 2012.
The primary requirements of the Code are as follows: 1. Creation and maintenance of a Treasury Management Policy Statement which sets out the policies and objectives of the Council’s treasury management activities. 2. Creation and maintenance of Treasury Management Practices which set out the manner in which the Council will seek to achieve those policies and objectives. 3. Receipt by the Full Council of an annual Treasury Management Strategy Statement - including the Annual Investment Strategy and Minimum Revenue Provision Policy for the year ahead, a Mid-year Review Report and an Annual Report (stewardship report) covering activities during the previous year. 4. Delegation by the Council of responsibilities for implementing and monitoring treasury management policies and practices and for the execution and administration of treasury management decisions. 5. Delegation by the Council of the role of scrutiny of treasury management strategy and policies to a specific named body. For this Council the delegated body is the Scrutiny Committee.
This mid-year report has been prepared in compliance with CIPFA’s Code of Practice on Treasury Management, and covers the following: An economic update for the first six months of 2015/16; A review of the Treasury Management Strategy Statement and Annual Investment Strategy; The Council’s capital expenditure; A review of the Council’s investment portfolio for 2015/16; A review of the Council’s borrowing strategy for 2015/16;
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A review of any debt rescheduling undertaken during 2015/16; A review of compliance with Treasury and Prudential Limits for 2015/16.
6. Economic Update (Provided by Capita Asset Services)
Economic performance to date – UK GDP growth rates in 2013 of 2.2% and 2.9% in 2014 were the strongest growth rates of any G7 country; the 2014 growth rate was also the strongest UK rate since 2006 and the 2015 growth rate is likely to be a leading rate in the G7 again, possibly being equal to that of the US. However, quarter 1 of 2015 was weak at +0.4% (+2.9% y/y) though there was a rebound in quarter 2 to +0.7% (+2.4% y/y). Growth is expected to weaken marginally to about +0.5% in quarter 3 as the economy faces headwinds for exporters from the appreciation of Sterling against the Euro and weak growth in the EU, China and emerging markets, plus the dampening effect of the Government’s continuing austerity programme, although the pace of reductions was eased in the May Budget.
Despite these headwinds, the Bank of England is forecasting growth to remain around 2.4 – 2.8% over the next three years, driven mainly by strong consumer demand as the squeeze on the disposable incomes of consumers has been reversed by a recovery in wage inflation at the same time that CPI inflation has fallen to, or near to, zero over the last quarter. Investment expenditure is also expected to support growth.
Interest Rate Forecast – Capita Asset Services undertook a review of its interest rate forecasts on 11 August after the August Bank of England Inflation Report. This latest forecast includes no change in the timing of the first increase in Bank Rate as being quarter 2 of 2016.
7. Treasury Management Strategy Statement update
The Treasury Management Strategy Statement (TMSS) for 2015/16, which includes the Annual Investment Strategy, was approved by this Council on 25th February 2015.
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.
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8. The Council’s Capital Position
The table below shows the financing of the Original Capital Budget approved by Full Council on the 25th February 2015 and the latest Revised Capital Budget. Nearly all of this increase was due to slippage in the capital programme from 2014/15.
Capital 2015/16 2015/16 Original Revised Estimate Estimate £’000 £’000 Total Budget 5,131 10,204
Financed by:
Capital receipts 1,508 2,870 Capital grants 1,861 4,520 Revenue 146 191 Total financing 3,515 7,581 Borrowing need 1,616 2,623
9. Investment Portfolio 2015/16
Investment rates available in the market have continued at historically low levels. The average daily level of funds deposited during the financial year to date, is £13.7m, compared with £13m for the same period in 2014/15. The actual value of funds deposited on the 30th September was £14.101m. These funds have been available on a temporary basis, and the level of funds available was mainly dependent on the timing of precept payments, receipt of grants and progress on the Capital Programme.
There were 6 investments carried forward from 2014/15 totalling £10.5m, of which £4.5m was with our bank HSBC, £4m fixed term deposits with Bank Of Scotland and £2m in fixed term deposits with Nationwide.
There have been 2 new investments made during the period 1st April 2015 to 30th September 2015 totalling £3 million, as well as a daily average of £7.89m being invested with HSBC’s “sweep” deposit account, earning between 0.35% and 0.4% interest.
The Council has an approved list of counterparties which governs treasury management activity. This list is a restricted list taking into consideration the credit rating of the institution concerned and there are also limits on the amount which can be invested with any particular institution from a particular sector e.g. building society, bank etc. and also any group of institutions within an overall banking group. As part of the daily operations of the treasury management dealings, in consultation with guidance from Capita Asset Services and the money market brokers, decisions are taken by the Director of Resources and the Head of Finance and Property Management temporarily suspending/revising operations with individual counterparties. The latest deposit counterparties list was revised and approved by the Full Council on 25th February 2015.
The current investment counterparty criteria selection approved in the TMSS is meeting the requirement of the treasury management function.
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Appendix 1 shows the maximum amount invested with any of the counter parties at any one time during the period 1st April 2015 to 30th September 2015. The maximum limit per counterparty is shown in brackets. None of the limits were breached.
Appendix 2 provides Members with an analysis of the Council’s short-term deposits during the period 1st April 2015 to 30th September 2015, as well as comparing this to the deposits placed throughout the 2014/15 financial year.
10. Borrowing
Below is a summary of the Council’s external indebtedness, as at 1st April 2015, and as at 30th September 2015.
st th Borrowing 1 Apr 15 30 Sept 15 Change Apr – £’000 £’000 Sept £’000 Public Works Loan Board 19,801 19,801 0 Temporary Market Loans 27 12 (15) Total 19,828 19,813 (15)
PWLB Loans – There is one loan of £1m due to be repaid on 31st March 2016.
Temporary Market Loans – The Mayor’s Charity Fund deposited £9k in May 2015 and withdrew £24k in June 2015.
11. Debt Rescheduling
Debt rescheduling opportunities have been limited in the current economic climate and consequent structure of interest rates. Therefore, no debt rescheduling was undertaken during the first six months of 2015/16.
12. Minimum Revenue Provision (MRP) The Council policy for making MRP on outstanding debt was revised and approved by Full Council on 15th July 2015. The period over which the pre-2002 debt will be repaid is now 50 years and has delivered a saving of £433k in 2015/16.
13. Compliance with Treasury & Prudential Limits
It is a statutory duty for the Council to determine and keep under review its affordable borrowing limits. The Council’s approved Treasury and Prudential Indicators (affordability limits) are included in the approved Treasury Management Strategy Statement.
During the financial year to date the Council’s treasury management activities operated within the treasury limits and Prudential Indicators set out in the Council’s Treasury Management Strategy Statement in compliance with the Council's Treasury Management Practices.
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An extract of the Prudential and Treasury Indicators are shown in Appendix 3.
14. Interest Payable on External Borrowing / Interest Receivable
Provision is made in the revenue budget to meet the net interest payable on external borrowing. The figure in the original budget for 2015/16 was set at £873,516.
Under the second round of revenue monitoring this budget will be revised down to £832,154 as a result of reducing the budget requirement for PWLB interest paid in the year and increasing the estimated interest receivable on external deposits.
The total interest receivable on temporary deposits for the period 1st April 2015 to 30th September 2015 amounted to £54,450 compared with a revised budget for the year of £80,000.
FINANCIAL IMPLICATIONS AND BUDGET PROVISION
15. None arising as a direct result of this report.
POLICY IMPLICATIONS
16. Compliance with the revised CIPFA Code of Practice on Treasury Management.
DETAILS OF CONSULTATION
17. Capita Asset Services Ltd guidance briefs.
BACKGROUND PAPERS
18. None.
FURTHER INFORMATION David Donlan, PLEASE CONTACT: Accountancy Division Manager
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APPENDIX 3
Prudential & Treasury Indicators for the first half of 2015/16
2015/16 2015/16 Prudential Indicator Original Revised £' 000 £' 000 Capital Expenditure 5,131 10,204 In year borrowing requirement 1,616 2,623 Authorised Limit for external debt 30,737 30,737 Operational Boundary for external debt 29,273 29,273 Investments (Actual as at 30th September) - 14,101 Net Borrowing (Actual as at 30th September) - 19,813 Capital Financing Requirement (CFR) 27,880 28,566 Ratio of financing costs to net revenue stream 13.1% 10.2% Limit of fixed interest rates based on net debt 100% 100% Limit of variable interest rates based on net debt 25% 25% Principal invested > 365 days - -
1st Apr 2015 30th Sept 2015 30th Sept 2015 2015/16 Maturity Structure of fixed rate borrowing during 2015/16 Actual Debt Actual Debt Actual Debt Original Limits in £m in £m as a % set as % ranges
Under 12 months 1.0 1.0 5% 0% - 35% 12 months to 2 years 2.0 2.0 10% 0% - 20% 2 years to 5 years 3.5 3.5 18% 10% - 30% 5 years to 10 years 9.1 9.1 46% 10% - 55% 10 years and above 4.2 4.2 21% 15% - 55%
Total 19.8 19.8 100%