Purpose

Consideration and potential rectification of
the financial issues arising from the review.

Content

The Executive Recommended to Council

That (i)    a total amount of £3,841,106 be
transferred from the General Fund to the HRA to rectify the
Sheerwater Estate Regeneration Project transactions originally
charged to the HRA;

         
(ii)   interest of £649,476
be transferred from the General Fund to ensure the HRA is fully
compensated;

         
(iii)  it be noted that the transfer of
the Yellow Phase land remains paused, and a report will be brought
back to Executive on the land transfer;

         
(iv) the total impact on the General Fund of £4.49 million
will be funded by an existing legacy risk reserve. This reserve has
been established, specifically to manage HRA legacy risks, through
the existing Capitalisation Directives provisionally approved by
the Government;

         
(v)  the Strategic Director for Finance
should make the necessary changes to the relevant budgets and the
associated accounting entries; and

         
(vi) it be noted that approved Debt Standstill and Cash Sweep
arrangements will remain in place to ensure the Council continues
to recover surplus cash from ThamesWey
Group.

Reason: To correct the treatment of
historic Sheerwater Estate Regeneration Project transactions that
were wrongly charged to the HRA and outline the impact on the HRA
reserve balance.